text: Bausparkassen Act (‘Gesetz über Bausparkassen’) of 15 February 1991 (BGBl. I p. 454), as amended by Article 6(14) of the Law of 28 August 2013 (BGBl. I p. 3395).

text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: Section 2 of the draft Bausparkassen Act.

text: Section 2a of the draft Bausparkassen Act.

text: Section 8(1) and (2) of the draft Bausparkassen Act. 7 Section 4(2) of the draft Bausparkassen Act. 8 Section 6(1) No (2) of the draft Bausparkassen Act. 9 Law on covered bonds (‘Pfandbriefgesetz’) of 22 May 2005 (BGBl. I p. 1373), as amended by Article 5 of the Law of 2 November 2015 (BGBl. I p. 1864). 10 11

text: Directive

text: of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive

text: and repealing Directives

text: and

text: (OJ L 176, 27.6.2013, p. 338). 13 Section 25b of the German Banking Act (‘Kreditwesengesetz’). 14 Directive

text: of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EEC

text: , and Directives

text: , and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and of the Council (OJ L 173, 12.6.2014, p. 190). 15 16

text: Article 14(1)

text: SSM Regulation. 17 Section 4(5) of the draft Bausparkassen Act. 18

text: Article 6(2)

text: SSM Regulation,

text: Article 21

text: SSM Framework Regulation.

title: Opinion of the European Central Bank of 2 December 2015 on the legal framework for home savings banks (CON/2015/53)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 2 December 2015 on the legal framework for home savings banks (

text: ) Introduction and legal basis

text: On 1 November 2015 the European Central Bank (ECB) received a request from the German Federal Ministry of Finance for an opinion on a draft law amending the German Bausparkassen Act (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and

text: Article 2(1) of Council Decision 98/415/EC

text: as the draft law contains draft legislative provisions within the ECB’s field of competence pursuant to Article 127(6) of the Treaty and rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Main purpose of the draft law

text: 1.1 Taking account of the challenges created by the current environment of low interest rates, the draft law introduces provisions aimed at securing and strengthening the manner in which profits are generated by Bausparkassen according to the German Bausparkassen Act (for the purposes of the present opinion referred to as home savings banks) and proposes measures to strengthen the risk management of home savings banks. The main purposes of the draft law are to: (a) amend the Bausparkassen Act so that it allocates supervisory competences to the ECB and the Federal Financial Supervisory Authority (BaFin) pursuant to

text: Council Regulation (EU) No 1024/2013

text: ; and (b) ensure that the typical risks that home savings banks face while conducting their business activities are managed by the home savings banks themselves and not by other units of the banking group within which home savings banks are often included. 1.2 The draft law specifies the requirements that home savings banks must fulfil when carrying out their business activities. In particular, Tier 1 capital needs to amount to at least EUR 20 million. Furthermore, suitable regulations and instruments to manage, monitor and control the specific risks that home savings banks face in their business activities must be implemented and a business plan

text: must be presented to BaFin that sets out the manner in which these business activities will be carried out on a regular and sustainable basis . 1.3 The draft law introduces a requirement that, in the event of a home savings bank’s banking license expiring or being withdrawn by the competent authority, all building loan agreements, including all related assets and liabilities, must be transferred to another home savings bank. If the bank does not comply with this requirement, BaFin may order the business to be wound up . 1.4 The draft law reinforces the principle that a home savings bank may not be managed by any other type of entity by stipulating that any contract or agreement that places a home savings bank’s management under the control of a different entity is invalid, unless this entity is recognised as a home savings bank . 1.5 The draft law introduces a requirement to put in place a specific and independent risk management system, significant elements of which – in particular collective management and the management of risks related to the collective home savings business - may not be transferred to third parties . 1.6 The draft law extends the possibility of home savings banks to grant ‘other building loans’. Other building loans are granted in order to finance housing expenditures without being linked to a home savings contract. The draft law, on the one hand, increases the total limit on other building loans from 75% to 100% of home savings loans and loans for pre- and interim financing , and, on the other hand, allows home savings banks to use the funds from home savings deposits that are temporarily not being used to grant home saving loans for the purpose of granting other building loans . 1.7 The current Law on home savings banks does not allow home savings banks to issue covered bonds. Subject to the conditions set out in the Law on covered bonds , the draft law grants home savings banks the possibility to issue covered bonds in order to grant home saving loans and other building loans and to raise funds required by it to carry out its business activities . 1.8 The draft law provides that the special items fund in the form of a technical reserve may be used to secure the collective caused interest margin, and if necessary to guard against any specific risk that the business activities might not be sustainable as they are carried out by the home savings banks.

text: 2. General observations

text: The draft law provides home savings banks with more flexibility to operate profitably, in particular by allowing them to issue covered bonds.

text: 3. Specific observations

text: 3.1 Special provisions on risk management The ECB acknowledges that the draft law aims at strengthening the risk management of home savings banks. In view of establishing a level playing field, however, outsourcing (parts) of the risk management should not be restricted by special provisions for home savings banks as provided under the draft law. The existing legal framework transposing Directive

text: of the European Parliament and of the Council already requires that the risks stemming from outsourcing are mitigated by a proper risk strategy, processes and controls. Moreover, the current legal framework already requires that the risk management of any credit institution including home savings banks needs to be adequate for the credit institution’s specific type of business, risk profile and complexity. 3.2 Allocation of competences 3.2.1 Member States may issue legislation that specifically addresses the business model of home savings banks. Such legislation has to comply with Union law, in particular Directive

text: and Directive

text: of the European Parliament and the Council . However, where national legislation creates competences that are directly related to competences conferred on the ECB, such competences established by national legislation should be applied by the ECB, provided that the relevant provisions can be construed as implementing Union legislation. 3.2.2 In particular, noting that the ECB has the exclusive competence to grant authorisations within the Single Supervisory Mechanism, the ECB understands that it will receive the business plan when going through the procedure to obtain an authorisation . 3.2.3 Similarly, where the draft law includes a requirement that home savings banks must submit a collective status report annually to BaFin , the ECB notes that the respective information is subject to the general obligation to submit information to the ECB . It contains data, for example, on the banks’ capacity to meet liabilities, the amount of their assets and other data relevant to assess their

text: financial situation and stability , and such data is essential for the ECB to be able to carry out supervision in accordance with the tasks conferred on it by

text: Council Regulation (EU) 1024/2013

text: . This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 2 December 2015. [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: Directive

text: of the European Parliament and the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives

text: and

text: and

text: Regulation (EU) No 1093/2010

text: (OJ L 60, 28.2.2014, p. 34). 3 Directive

text: of the European Parliament and the Council of 23 April 2008 on credit agreements for consumers and repealing

text: Council Directive 87/102/EEC

text: (OJ L 133, 22.5.2008, p. 66). The draft law will overhaul Law 145/2010 Coll. on consumer credit, which implements Directive

text: , 4 Commission Delegated

text: Regulation (EU) No 1125/2014 of 19 September 2014

text: supplementing Directive

text: of the European Parliament and of the Council with regard to regulatory technical standards on the minimum monetary amount of the professional indemnity insurance or comparable guarantee to be held by credit intermediaries (OJ L 305, 24.10.2014, p. 1). 5 As defined in

text: Article 2

text: and subject to the exemptions set out in Article 4 of the draft law. 6 See Article 7 of the draft law. The addition of non-banks to the list of entities which may be authorised b ČNB to provide or intermediate consumer credit will require a small amendment to the Act on Česká národní banka No. 6/1993 Coll., as amended.

text: See

text: Article 3(1)

text: (a) and (b) of the draft law. 8 See Part X (Oversight) of the draft law. Currently ČNB supervises consumer credit only if provided or intermediated by entities which it supervises (i.e. credit institutions, foreign bank branches, electronic money institutions, savings banks and credit cooperatives). 9 See amended item 65, point 9 of Annex II to the accompanying draft law amending Law No.634/2004 on administrative fees. As regards ČNB’s statutory power to set administrative fees for authorising and renewing of authorisation of consumer credit providers and of intermediaries, see

text: Article 12(2)

text: and Articles 20 and 31 of the draft law respectively. 10 Under the current Law 145/2010 Coll. on consumer credit, the Czech Trade Inspection Authority is responsible for supervising the provision and intermediation of consumer credit by non-banks (with Trade Licensing Offices being responsible for issuing trade licences to the entities concerned), unless, as part of these activities, the entities offer payment services, e.g. issue of credit cards, in which case they are licensed as payment institutions and supervised by ČNB.

text: See Opinion

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 12 See the ECB’s 2014 Convergence Report, p. 25.

text: See paragraph 3.1 of

text: See ECB 2014 Convergence Report, p. 25. 15 See footnote 9 for provisions on the administrative fees that ČNB will charge for providers’ and intermediaries’ authorisations and renewals of authorisations. 16 For example, ČNB’s branch network may face an increased work load as a result of having to deal with public complaints about local non-bank consumer credit providers. 17 See Annex 1 to Directive

text: of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive

text: and repealing Directives

text: and

text: (OJ L 176, 27.6.2013, p. 338). 18 See also Opinion

text: According to the Ministry of Finance’s explanatory memorandum to the draft law, there are 7 NCBs which currently carry out such supervisory tasks in the European Union. 20 See, for example, paragraphs 2.1-2.3 of Opinion

text: , paragraphs 2.1 and 2.2 of Opinion

text: , paragraphs 2.1-2.5 of Opinion

text: and paragraph 2 of Opinion

text: . 21 Articles 2 and 44 of the Act on the Czech National Bank No 6/1993 Coll., as amended. 22 See further paragraph 3.7 below 23 See Parliamentary Resolution no. 367/2014 as published in the Parliamentary Gazette, Issue no. 41 and the Regulatory impact assessment (RIA) for the draft law: http://www.mfcr.cz/cs/soukromy-sektor/spotrebitelskyuver/distribuce-uveru-pro-spotrebitele/zahajeni-mezirezortniho-pripominkoveho-r-21716 24 See paragraph 3.1 of

text: See the Ministry of Finance explanatory memorandum to the draft law, and p. 65 of the Regulatory impact assessment (RIA), which includes only a broad range of estimated annual costs as provided by ČNB: http://www.mfcr.cz/cs/soukromy-sektor/regulace/spotrebitelsky-uver/distribuce-uveru-pro-spotrebitele/zahajenimezirezortniho-pripominkoveho-r-21716. 26 Pursuant to the Act No. 82/1998 Coll. on State liability, as amended, the State is primarily liable for damage caused by an unlawful decision or improper administrative action by a legal entity or person in the course of exercising public authority on the State’s behalf. In this case that entity would be ČNB as the competent supervisory authority. Should the State be held liable for any breach of ČNB’s legal obligations, the State may request it to indemnify the State but only for damage caused by ČNB’s culpable conduct, such as negligence and wilful misconduct. 27 See the Ministry of Finance’s explanatory memorandum to the draft law as referred to in footnote 25, where the possible reputational risk for ČNB is acknowledged.

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 9 December 2015 on consumer credit (CON/2015/54)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 9 December 2015 on consumer credit (

text: ) Introduction and legal basis

type: rubrik

text: On 6 October 2015 the European Central Bank (ECB) received a request from the Minister of Finance of the Czech Republic for an opinion on a draft law on consumer credit (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

text: , as the draft law relates to a national central bank. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

type: stycke

text: 1. Purpose of the draft law

text: 1.1 The purpose of the draft law is to transpose into Czech law Directive

text: of the European Parliament and of the Council and parts of Directive

text: of the European Parliament and of the Council , whilst also building on certain relevant EU provisions in Commission Delegated

text: Regulation (EU) No 1125/2014

text: . The draft law also seeks to regulate the activities of authorised providers and intermediaries of consumer credit, including their activities abroad, and the rights and obligations of parties in the provision and intermediation of consumer credit. 1.2 The principal provisions of the draft law: (1) set out which types of authorised entity may provide and intermediate consumer credits as part of its business activity in the Czech Republic, subject to the provisions of the draft law, with such entities including also non-banks (hereinafter ‘consumer credit providers and

text: intermediaries’), and the activities that come under the provision and intermediation of consumer credit ; (2) place consumer credit providers and intermediaries under the oversight and supervision of Česká národní banka (‘ČNB’) ; and (3) overhaul the current legal framework regulating such entities and the provision of such services and ČNB’s supervisory and regulatory powers with respect to such entities, including the conditions for their authorisation, the maintenance by ČNB of a public register of such entities, and ČNB’s power to charge fees for their authorisation and for renewals of authorisation, so as to finance ČNB’s costs related to their supervision . 1.3 The ECB understands that to date non-banking credit providers and intermediaries have been licensed by trade offices (“živnostenský úřad”), that they have been only lightly regulated and that they have been supervised by the Czech Trade Inspection Authority, which falls under the jurisdiction of the Ministry of Industry and Trade . 1.4 The ECB understands that there is a disagreement between the Ministry of Finance and ČNB insofar as ČNB is not willing to assume this new supervisory task. The ECB trusts that this disagreement will be resolved at national level with due regard to the principle of central bank independence.

text: 2. General observations

text: 2.1 The ECB understands that the draft law will bring consumer credit providers and intermediaries under the supervision of ČNB. The ECB takes note of the intention of the legislator to achieve a consistently high level of supervision also for non-bank consumer credit providers. However, the ECB also notes that to date non-banking consumer credits have had negative social impacts in the Czech Republic. 2.2 The draft law expands ČNB’s powers to supervise also non-bank consumer credit providers and intermediaries, thus broadening and extending ČNB’s current responsibilities for the supervision of the same activities when undertaken by licensed credit institutions. The ECB underlines that, in the context of a proposed conferral of new tasks on an ESCB member, it is necessary to assess such conferral against the prohibition of monetary financing under Article 123 of the Treaty. The ECB has developed the guidance set out in paragraphs 2.2.1 to 2.2.3 of this opinion, in the form of

text: general and specific considerations, on the basis of which it may decide whether a new task conferred on an ESCB national central bank (NCB) is to be considered a central banking task or a government task for the purposes of assessing such conferral against the prohibition of monetary financing under Article 123 of the Treaty . The concrete assessment of whether ČNB’s task of supervising consumer credit providers and intermediaries is to be considered a central banking task or a government task is then undertaken in paragraph 3.1 of this opinion. 2.2.1 General considerations First, the systematic categorisation of tasks assigned to NCBs as central banking or government tasks applies to genuinely new tasks that did not exist in the past or did not form an integral part of the central banking tasks already assigned to the NCB in the past. In recognition of the different Member States’ legal frameworks, central banking traditions and national set-ups, the tasks currently discharged by an NCB as central banking tasks are not reviewed and re-categorised, but may be reassessed if their substance is amended. Second, it needs to be emphasised that when Member States decide to confer new tasks on their NCBs, due regard must be given to the role of the NCB as part of the ESCB or Eurosystem, as applicable, and to the requirement of central bank independence. The principle of financial independence, which is a key aspect of the principle of central bank independence as laid down in Article 130 of the Treaty, requires that the Member States may not put their NCBs in a position where they have insufficient financial resources to carry out their ESCB- or Eurosystem-related tasks, as applicable. Accordingly, an NCB must have sufficient financial means not only to perform its ESCB- or Eurosystem-related tasks but also its national tasks (e.g. financing its administration and own operations) . Where an NCB considers that the allocation of a new task would impinge on its financial independence, because it would not have sufficient means to focus primarily on its ESCB- or Eurosystem-related tasks, or that the discharge of the new task would impose a disproportionate burden on it, the NCB should be able to object to the new task being allocated to it. Third, central banking tasks comprise in particular those tasks that are related to the tasks listed in

text: Article 127(2)

text: , (5) and (6) of the Treaty. Fourth, new tasks conferred on an NCB which are atypical of NCBs’ tasks, or which are clearly discharged on behalf of and in the exclusive interest of the government or of other public entities, should be considered as government tasks. In that context, a distinction should be drawn between NCBs’ liquidity- and solvency-related tasks. While, for the purposes of the monetary financing prohibition, solvency support is a government task, liquidity-related tasks, the ultimate objective of which are to finance the economy, are central banking tasks.

text: 2.2.2 Specific considerations Banking supervision and macro-prudential tasks are central banking tasks when discharged by an NCB, provided they do not undermine its independence in accordance with Article 130 of the Treaty. An important criterion for qualifying a new task as a government task is the impact of the task on the institutional, financial and personal independence of the NCB. In particular, the following should be taken into account. First, it should be assessed whether the performance of the new task creates inadequately addressed conflicts of interests with existing central banking tasks, without necessarily complementing the existing central banking tasks. If a conflict of interest arises between existing and new tasks, there should be sufficient mitigation measures in place to adequately address that conflict. Complementarity between the new task and existing central banking tasks should not, however, be interpreted broadly, as this could lead to the creation of an indefinite chain of ancillary tasks. The assessment of the complementarity of the new task should also take into account the financing of that task. In the event of a conflict of interest between prudential supervision and consumer protection prudential supervisory considerations must prevail . Second, it should be assessed whether without new financial resources the performance of the new task places a disproportionate burden on the financial or organisational capacity of the NCB and may negatively impact on its capacity to properly perform existing central banking tasks. Third, it should be assessed whether the performance of the new task is aligned with the institutional set-up of the NCB, in particular as regards central bank independence and accountability considerations. Fourth, it should be assessed whether the performance of the new task entails substantial financial risks. Fifth, it should be assessed whether the performance of the new task exposes the members of the NCB’s decision-making bodies to political risks that are disproportionate and could also impact on their personal independence and, in particular, the guarantee of the Governor’s term of office under Article 14.2 of the Statute of the European System of Central Banks and of the European Central Bank. 2.2.3 Any final assessment on the qualification of a task given to an NCB as either falling within the scope of a central banking task or a government task will be guided by the objective of ensuring the consistent application of the prohibition of monetary financing within the Eurosystem and the ESCB.

text: 3. Specific observations

text: 3.1 Conferral on ČNB of the task of supervising consumer credit providers and intermediaries The draft law designates ČNB as the supervisory authority for non-bank consumer credit providers and intermediaries, thus broadening its current functions and activities. The ECB understands that up to now this segment of the financial market has been regulated in an unsatisfactory manner. In the light of the guidance set out in paragraphs 2.2.1 to 2.2.3, it must be assessed whether ČNB’s new tasks could constitute a breach of the monetary financing prohibition. 3.2 Principle of financial independence The principle of financial independence requires NCBs to have sufficient means to carry out not only their ESCB-related tasks but also their national tasks, both from an operational and financial perspective . In this regard the ECB notes that the draft law provides that ČNB has the power to require that consumer credit providers and intermediaries pay ČNB fees for authorisations and renewals of authorisations . The staff of such entities will need to acquire the relevant professional qualifications in order to be able to perform these activities. However, this will be achieved under the responsibility and at the cost of the supervised entity, with ČNB acting only as the accrediting body for such qualifications. This should ensure that the cost of authorising market participants for such activities is met by the industry. However, the costs of carrying out supervision by ČNB might not be fully covered by the fees collected. The new task is expected to lead to increased staffing and operational costs for ČNB . 3.3 Links to tasks listed in Article 127(5) of the Treaty The supervision of consumer credit providers and intermediaries can be considered a task related to those referred to in Article 127(5) of the Treaty, based on the understanding that it is complementary to the supervisory tasks exercised by the NCB, particularly where, as in this case, ČNB already supervises credit institutions, including their consumer credit activities, and has the task of ensuring the stability of the financial system. Moreover, point 2 of Annex 1 to Directive

text: of the European Parliament and of the Council lists the provision and intermediation of consumer credit as activities that are subject to mutual recognition. Such activities may thus be carried out across borders by credit institutions and non-banks authorised and supervised by the competent authorities of another Member State, provided that such activities are covered by the relevant authorisation of the entity concerned . From this perspective, it makes sense to designate ČNB as the only competent authority in this area in the Czech Republic.

text: 3.4 Atypical tasks A number of Member States have conferred on their NCBs supervisory tasks related to the provision of consumer credit . The ECB has generally accepted the allocation of such tasks to NCBs provided they do not interfere with the performance of the NCB’s ESCB-related tasks . The tasks of an NCB with regard to the supervision of consumer credit providers and intermediaries can therefore, if this condition is met, be regarded as tasks not atypical of a central bank, particularly if, as in the case of ČNB, it has a statutory responsibility for banking supervision and financial stability . It is important however that appropriate resources are available to ensure that ČNB can properly perform these functions . 3.5 Discharge of tasks on behalf of and in the exclusive interest of the Government or of other public

text: entities

text: ČNB is designated as the sole supervisory authority for consumer credit providers and intermediaries in its own name. However, background documentation regarding the draft law indicates that this designation is proposed by the Ministry of Finance as a reaction to a socialeconomic problem associated with the indebtedness of some parts of the population in the Czech Republic . 3.6 Extent to which conflicts of interests with existing ČNB tasks are addressed and the performance of tasks is aligned with ČNB’s institutional set-up, in particular as regards central bank independence

text: and accountability considerations

text: As the supervisor of consumer credit providers and intermediaries, ČNB will also be responsible under the draft law for applying consumer protection rules to such entities. As the authority responsible for supervising the financial markets, ČNB will be required to mitigate any potential conflict of interests between its consumer protection tasks and its banking supervision and financial stability mandates, by always taking the latter into account when imposing a sanction or enforcement measure in relation to a breach of an obligation in the field of financial consumer protection. Sufficient mitigation measures must be put in place to ensure that, in the event of a conflict of interest, prudential supervisory considerations will prevail . In this regard, given the complementarity of the new task of supervising consumer credit providers and intermediaries with ČNB’s existing supervisory tasks, the new task may be said to fit into ČNB’s institutional set-up. There is however a reputational risk that, despite the proposed more stringent regulation and supervision of consumer credit providers and intermediaries, ČNB could be held accountable by the general public for problems related to the indebtedness of society and unlawful usury.

text: 3.7 Extent to which the performance of tasks is proportionate to ČNB’s financial and operational

text: capacity and its ability to perform its ESCB-related tasks

text: As noted above, in order to remain financially independent, NCBs must have sufficient means to carry out not only their ESCB-related tasks but also their national tasks, both from an operational and financial perspective. The ECB understands that the draft law’s regulatory impact assessment does not contain a precise estimate of the direct costs that ČNB is likely to incur by also supervising non-bank consumer credit providers and intermediaries . In this regard, however, the ECB welcomes the fact that the draft law provides that consumer credit providers and intermediaries will be charged administrative fees for the issuance of authorisations to carry out such activities and for the renewal of such authorisations. However, the ECB presumes that these fees would not cover all of ČNB’s costs related to this supervision. The ECB also understands that this new task will lead to ČNB having to address more punitive administrative cases. In accordance with Czech administrative law, the ECB understands that these cases are heard by two instances. Although ČNB may recruit sufficient staff to deal with the cases at first instance, it is only ČNB’s seven-member Bank Board that may take a final decision at second instance. Therefore, from an operational perspective, the ECB is concerned as to whether ČNB’s Bank Board will have sufficient capacity to properly handle its core central banking and ESCB-related tasks together with these new consumer protection cases. Furthermore, the workload of ČNB’s Bank Board related to consumer cases might be disproportionate in comparison to its core central banking, ESCB-related, prudential supervisory and macro-prudential tasks. 3.8 Extent to which the performance of tasks entails substantial financial risks As in the case of other State authorities performing public functions, ČNB’s potential liability for damages and/or costs arising from any breaches of law or improper administrative procedures in the supervision of such entities under the draft law, will be subject to the usual rules on liability for damage caused during the exercise of State Authority . The ECB notes that the explanatory memorandum to the draft law considers that taking on the supervisory responsibility for a sector, which has for many years been only lightly regulated, may entail - apart from the additional financial burden - reputational risks for ČNB . The ECB also notes that the draft law includes powers to supervise such entities, so that if those powers are effectively used and enforced any reputational risks can be minimised.

text: 4. Conclusion

text: The ECB considers that there are grounds for regarding ČNB’s new task of supervising non-bank consumer credit providers and intermediaries as a central banking task in the sense that it can be regarded as complementing CNB’s existing banking supervisory functions in the area of consumer credit, provided it does not undermine ČNB’s independence. As the authority responsible for supervising the financial markets, ČNB should put in place measures to mitigate any potential conflict of interests between its consumer protection tasks in respect of such entities and its existing banking supervision and financial stability mandates, to ensure that in the event of a conflict, the latter mandates prevail. There are concerns that by proposing that ČNB perform the new task under the draft law the authorities are reacting to a social-economic problem connected to the indebtedness of some parts of the population in the Czech Republic, which is a problem not purely related to financial supervision. There are also concerns relating to the operational and reputational risks connected with vesting ČNB with supervisory tasks in the area of non-bank consumer credit. These aspects should be considered in more depth by the relevant Czech authorities before the draft law is adopted. As regards the principle of financial independence, the fact that the supervised entities will contribute to the cost of ČNB performing the new supervisory tasks, by paying authorisation fees, has a positive impact on ČNB’s financial capacity to assume these tasks. This notwithstanding, it should be ensured that ČNB has sufficient human and material resources to carry out the new tasks without affecting its capacity to carry out its core central bank, ESCB-related and prudential supervisory tasks. Hence, ČNB should be able to object to the conferral of the new tasks on financial independence grounds, for example if assuming the task would mean that either ČNB would not have sufficient means to focus primarily on its ESCB-related tasks or the discharge of the new tasks would impose a disproportionate burden on it.

text: This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 9 December 2015.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI

type: vagledning

utgivare: ecb


text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

title: Opinion of the European Central Bank of 10 December 2015 relating to stamp duty on cash withdrawals from automated teller machines (CON/2015/55))

text: OPINION OF THE EUROPEAN CENTRAL BANK of 10 December 2015 relating to stamp duty on cash withdrawals from automated teller machines (

text: ) Introduction and legal basis

text: On 20 October 2015, the Irish Minister for Finance formally presented the Finance Bill 2015 (hereinafter the ‘draft law’) to Dáil Éireann, the lower house of the Oireachtas (the National Parliament). The European Central Bank (ECB) has not been consulted by the Irish authorities on the draft law. The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the first and second indents of

text: Article 2(1) of Council Decision 98/415/EC

text: , as the draft law relates to currency matters and means of payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: Section 61 of the draft law amends the existing Stamp Duties Consolidation Act 1999, to replace the current flat rate stamp duty charge on cash, debit and combined cards as of 1 January 2016 with a charge on cash withdrawals using these cards from automated teller machines (ATMs) in Ireland. Each such cash withdrawal will be charged EUR 0.12, but the annual charge will continue to be capped at a maximum of EUR 2.50 for single function (i.e. cash or debit) card withdrawals and EUR 5 for combined (i.e. cash and debit) card withdrawals. The purpose of the draft law is to encourage greater use of electronic methods of payment in Ireland by providing consumers with an incentive to use debit cards instead of withdrawing cash from ATMs.

text: 2. General observations

text: 2.1 One of the basic tasks of the European System of Central Banks (ESCB) under the fourth indent of Article 127(2) of the Treaty on the Functioning of the European Union (TFEU) is to promote the smooth operation of payment systems. The ECB also has a special responsibility for cash, as it has the exclusive right to authorise the issue of euro banknotes within the Union in accordance with

text: Article 128

text: TFEU and Article 16 of the Statute on the European System of Central Banks and the European Central Bank. Within its sphere of competence, the ECB monitors and continuously seeks to promote the safety, resilience and efficiency of these means of payment. The ECB is

text: neutral with regard to these different means of payment, meaning that it does not favour one instrument over another. As a result, the ECB favours a carefully considered and balanced approach to national measures taken in this area. 2.2 The ECB understands the objective of encouraging the greater use of electronic methods of payment in Ireland. This should not, however, lead to legislation making the use of euro banknotes more expensive than electronic methods of payment, thus putting legal tender at a disadvantage. 2.3 The ECB would point out that since the stamp duty charge is a form of taxation on the withdrawal of cash from ATMs, it could affect the legal tender status of euro banknotes. Moreover, notwithstanding the public reason for the stamp duty charge and the low level of charges imposed by the draft law, the ECB is concerned that this may set a precedent for the possible future taxation on the channels to access euro banknotes. 2.4 While welcoming the removal of the stamp duty charge on cash, debit and combined cards, the ECB notes that the proposed stamp duty on ATM withdrawals could make the use of euro banknotes more expensive than electronic payments, and would therefore recommend that the measure be reconsidered.

text: Done at Frankfurt am Main, 10 December 2015.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: The ECB notes that the legislative initiative for the preparation of the draft legislative provisions was taken by members of the Romanian Parliament.

text: Alternatively, the President of Romania has the right to send the draft legislative provisions to the Constitutional Court, for review. 3

text: Directive

text: of the European Parliament and of the Council of 4 February 2014 on credit agreements for consumers relating to residential immovable property and amending Directives

text: and

text: and

text: Regulation (EU) No 1093/2010

text: (OJ L 60, 28.2.2014, p. 34).

text: In particular, temporary arrangements were put in place in Portugal that provided for the possibility of datio in solutum where a debtor was confronted with very difficult financial constraints. Moreover, in Spain the return of residential immovable property in lieu of repayment was permitted subject to strict eligibility requirements. 6 See Opinions

text: , paragraph 2.4, and

text: , paragraph 2.1. All ECB opinions are available on the ECB website at www.ecb.europa.eu. 7 See Opinion

text: , paragraph 3.2.2. 8 See

text: Article 23

text: , paragraphs (1) to (4) of Directive

text: . 9 See

text: Article 23(5) of Directive 2014/17/EU

text: Law no. 151/2015 on insolvency proceedings for natural persons, published in Monitorul Oficial al României, Part I, No 464 of 26 June 2015. 11 See Opinion

text: , paragraph 2.3. 12 See Opinion

text: , paragraph 3.1.2.

text: See, most recently, Opinion

text: . Regarding foreign currency loans in Hungary, see also Opinions

text: and

text: and, regarding foreign currency loans in Poland, Opinion

text: . 14 See Opinions

text: , paragraphs 2.3 and 2.4, and

text: , paragraph 2.3.

title: Opinion of the European Central Bank of 18 December 2015 on discharge of mortgage-backed debts through transfer of title over immovable property (CON/2015/56)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 18 December 2015 on discharge of mortgage-backed debts through transfer of title over immovable property (

text: ) Introduction and legal basis

text: On 25 November 2015 a draft law on the discharge of debt obligations assumed through credit agreements by ‘payment in kind’ through the transfer of mortgaged property (hereinafter the ‘draft legislative provisions’) was adopted by the Chamber of Deputies of the Romanian Parliament and, on 9 December 2015, was submitted for promulgation to the President of Romania. This is the last step in the legislative procedure before the draft legislative provisions become legally binding and of general application in Romania. The draft legislative provisions have not yet been promulgated by the President of Romania, who has the right to send the draft legislative provisions back to the Parliament for reexamination . On 14 December 2015 the European Central Bank (ECB) was informed by the Banca Naţională a României (BNR) about the draft legislative provisions. In light of the above, and in view of the potential impact of the draft legislative provisions on the stability of financial institutions and markets in Romania, the ECB has decided to deliver an own initiative opinion on the draft legislative provisions, since it has not been formally consulted by the Romanian legislator. The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the sixth indent of

text: , as the draft legislative provisions relate to rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft legislative provisions

text: 1.1 According to the explanatory memorandum, the aim of the draft legislative provisions is to balance the interests of the parties in a default or foreclosure situation related to credit agreements secured by a mortgage arrangement. In this respect, the scope of the draft legislative provisions covers any credit agreement between natural persons and financial institutions which is secured by a mortgage arrangement (hereinafter a ‘credit agreement’). In addition, the draft legislative provisions

text: aim to transpose into Romanian law certain provisions of Directive

text: of the European Parliament and of the Council . 1.2 Article 1(2) of the draft legislative provisions establishes a general right for debtors to discharge their debts and all accessory obligations under a credit agreement by transferring to the creditor the ownership title over the mortgaged immovable property, subject to compliance with the conditions set out in

text: Article 4

text: . 1.3 Article 4 of the draft legislative provisions sets out the following conditions for the full discharge of the debt: (i) the debtor is a natural person and the creditor is a credit institution, non-bank financial institution or an assignee of personal claims; (ii) the parties, or their predecessors, have entered into a credit agreement; and (iii) the property tendered in order to discharge the debt is the property mortgaged to secure the creditor’s claims under the credit agreement. 1.4 The remaining key provisions of the draft legislative provisions lay down the particulars of the procedure for the mandatory transfer of title over a debtor’s immovable property. Debtors can notify creditors at any time of their decision to transfer the ownership of immovable property in discharge of their debt under a credit agreement. Following such notification, creditors are under an obligation to convene with the notifying debtors before a public notary in order to execute the deed for the transfer of title in exchange for the discharge of all obligations under the credit agreement. Debtors may initiate court proceedings against creditors who fail to comply with this obligation, petitioning the court for the issuance of a court order in lieu of a transfer deed. Both the procedure before the public notary and such court proceedings may also be initiated by co-debtors or guarantors. It is worth noting that, according to

text: Article 6(1)

text: , once the procedure has been initiated by sending the notification, the creditor’s right of recourse against all co-debtors and personal or mortgage guarantors is extinguished. 1.5 Pursuant to Article 11 of the draft legislative provisions, the law applies both to credit agreements concluded after its entry into force as well as to all outstanding credit agreements.

text: 2. General observations

text: 2.1 It is noted that, given their wide scope, the draft legislative provisions would apply not only to consumer loans but also to commercial loans of natural persons, and to performing and nonperforming loans alike. While the ability of financial institutions to effectively manage credit risk depends on a reliable, predictable and stable legal framework which adequately balances the interests of both the creditor and the debtor, the draft legislative provisions introduce unprecedented changes into the legal framework applicable to credit agreements in Romania which significantly undermine legal certainty and the adequate management of credit risk in financial institutions. The ECB notes that in response to the financial crisis several Union member states introduced new legal frameworks on personal debt restructuring, which in a very few cases included a limited right to return the mortgaged property in lieu of repayment. However the exercise

text: of this right is not left to the discretion of the borrower, but rather is subject to compliance with strict economic and other eligibility criteria . 2.2 In this respect, the ECB advises the Romanian authorities to carefully consider the impact of the draft legislative provisions on existing credit agreements in order to ensure legal certainty and avoid undue interference with the contractual and property rights of credit institutions, and to prevent moral hazard from arising in the relationship between creditor and debtor . The draft legislative provisions should strive to ensure an adequate balance between the general duty of debtors to meet their payment obligations – which is conducive to a prompt payment culture, the preservation of the soundness of credit institutions and the prevention of moral hazard – and the need to provide assistance to individuals in severe financial difficulties.

text: 3. Specific observations

text: 3.1 Legal certainty 3.1.1 It is for the Romanian authorities to assess whether the retroactive character of the draft legislative provisions is consistent with Romanian constitutional principles. However, the ECB notes that introducing measures with retroactive effect, such as the draft legislative provisions, risks undermining legal certainty and is not in line with the principle of legitimate expectations . 3.1.2 As noted in paragraph 1.1, the draft legislative provisions also apply to credit agreements for consumers relating to residential immovable property which fall within the scope of Directive

text: . In particular, where a credit agreement relates to a foreign currency loan,

text: Article 23 of Directive 2014/17/EU

text: requires Member States to have in place an appropriate regulatory framework to at least ensure that the consumer has a right to convert the credit agreement into an alternative currency under specified conditions or that there are other arrangements in place to limit exchange rate risk . However, pursuant to

text: Article 23(5) of Directive 2014/17/EU

text: , Member States may further regulate foreign exchange loans provided that such regulation is not applied with retrospective effect . Subject to the European Commission’s competence to monitor the implementation of Union law, the Romanian authorities are invited to consider whether the unilateral right of a borrower to fully discharge his debt under a foreign exchange loan agreement, as granted under the draft legislative provisions, would be in line with

text: Article 23(5) of Directive 2014/17/EU

text: . 3.1.3 The ECB is concerned also that the draft legislative provisions do not seem to be in line with

text: Article 28(4) of Directive 2014/17/EU

text: , according to which Member States shall not prevent the parties to a credit agreement from expressly agreeing that return or transfer to the creditor of the security or proceeds from the sale of the security is sufficient to repay the credit. Pursuant to

text: Article 3 of the draft legislative provisions, by way of derogation from the relevant provisions of the Romanian Civil Code, debtors have the right to fully discharge their obligations by transferring ownership over mortgaged immovable property to their creditors. Creditors do not have the right to oppose the transfer of the mortgaged immovable property if the credit agreement falls within the scope of the draft legislative provisions and satisfies the related conditions for the applicability of the draft legislative provisions. The Romanian authorities are invited to liaise with the European Commission as to whether the draft legislative provisions are compatible with Directive

text: . 3.1.4 The ECB also considers that the draft legislative provisions should sufficiently clarify how they interact with other related laws, such as Law No 151/2015 on insolvency proceedings for natural persons , and the release of natural persons from debt under that law. A comprehensive debt restructuring framework would be more effective in addressing the unique challenges of unsustainable personal indebtedness. Such a regime would set the right incentives for affected parties so that debtors who are genuinely over-indebted and their creditors are incentivised to agree on a restructuring either on a bilateral basis or in a multilateral setting, for example as part of formal proceedings, such as insolvency proceedings. 3.2 Effects on the Romanian economy 3.2.1 Granting general rights, such as those provided for in Article 1(2) of the draft legislative provisions, which are not targeted exclusively at debtors in need of social protection, may lead to moral hazard, and undermine the future supply of credit. Such rights can potentially incentivise debtors who have no genuine need for protection to speculate on changes in real estate prices and to stop meeting their obligations, even if they have the means to do so in full. In anticipation of the negative impact that such rights could have on payment discipline in Romania, banks could be pushed to tighten lending conditions and boost advance payments. Higher interest rates and restrictive lending to households and small businesses may adversely affect economic growth and job creation. Therefore any such rights should be targeted at vulnerable borrowers, and be accompanied by effective safeguards to prevent strategic defaults and avoid a negative impact on future lending. In the absence of any such conditions, the normal functioning of credit institutions may be strongly impaired, which might affect adversely the soundness of individual credit institutions and – through contagion effects – pose substantial risks to the whole financial system. If such risks to the proper functioning of the credit channel were to materialise potential negative spillover effects on the economy would be likely . 3.2.2 The draft legislative provisions might also lead to a deterioration of foreign investor sentiment due to a perceived increase in legal uncertainty and country risk. Consequently, the ECB suggests that the Romanian authorities carry out a thorough analysis of the possible effects on the Romanian economy of introducing the draft legislative provisions .

text: 3.3 Effects on financial stability 3.3.1 From a financial stability perspective, potential concerns about the impact on credit institutions, which need to be assessed from the outset, are related to: (i) the risks associated with foreign currency loans; (ii) the retrospective effects of the draft legislative provisions, also affecting outstanding credit arrangements; and (iii) the implications for prudential requirements for credit institutions in relation to mortgages on residential property to appropriately reflect the riskiness of related portfolios. Therefore, the ECB stresses the importance of a thorough impact analysis of the practical implications of the draft legislative provisions for the business of domestic credit institutions and, more broadly, for the Romanian real estate market. Given the significance of the interests at stake, both for affected credit and other financial institutions, as mandatory recipients of real estate assets, as well as the owners of other real estate assets in Romania, it is only with the benefit of a prior assessment that it might be possible to mitigate ensuing risks to financial stability. 3.3.2 As regards the longer-term effects on financial stability, the ECB notes that the draft legislative provisions will also apply to foreign currency loans. The ECB considers that, when introducing measures in relation to settling foreign currency loans, due consideration should always be given to fair burden-sharing among all stakeholders, thus also averting moral hazard in the future. The ECB has, on several occasions, pointed out the risks associated with foreign currency loans . The draft legislative provisions do not seem to contain any safeguards in this respect. 3.4 Effects on the banking sector The draft legislative provisions may have negative implications for credit institutions, with a potential impact on profitability, capitalisation and future lending capacity, the functioning of the financial system, as well as on the overall cost and conditions of credit . In a worst case scenario, such implications could lead to capital shortfalls, potentially requiring prudential measures. It is noted that, should the draft legislative provisions enter into force, Romanian credit institutions would need to engage in the business of managing the real estate assets tendered to them in discharge of debts due to them under credit agreements.

text: Done at Frankfurt am Main, 18 December 2015.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).

text: Zakon o Banki Slovenije (ZBS-1) (Ur. l. RS No 72/06 – official consolidated text, 59/11). 3 Zakon o računskem sodišču (ZRacS-1) (Ur. l. RS No 11/01 and 109/12). 4 Zakon o bančništvu (ZBan-2) (Ur. l. RS No 25/15). 5 Zakon o javnih uslužbencih (ZJU) (Ur. l. RS No 63/07 – official consolidated text, 65/08, 69/08 – ZTFI-A, 69/08 – ZZavar-E and 40/12 – ZUJF). 6 Zakon o sistemu plač v javnem sektorju (ZSPJS) (Ur. l. RS No 108/09 – official consolidated text, 13/10, 59/10, 85/10, 107/10, 35/11 – ORZSPJS49a, 27/12 – Decision of the Constitutional Court, 40/12 – ZUJF, 46/13, 25/14 – ZFU, 50/14, 95/14 – ZUPPJS15 and 82/15).

text: ‘Budget users’ means those entities that are defined by the Law on public finance (Zakon o javnih financah, Ur. l. RS No 11/11 – official consolidated text, 14/13 – corr., 101/13 and 55/15 – ZFisP) as State and municipal authorities and organisations, municipal administrations and public funds, institutes and agencies established by the State or a municipality. 8 All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

text: See, for example, page 24 of the ECB’s Convergence Report 2014. All ECB Convergence Reports are available on the ECB’s website at www.ecb.europa.eu.

text: See Article 20(3) of the Law on Court of Audit, according to which (i) “regularity audit” means obtaining relevant and sufficient data to enable an opinion to be expressed on compliance of operation with regulations and guidelines that any user of public funds is required to observe in the conduct of operation and (ii) “performance audit” means obtaining relevant and sufficient data to enable an opinion to be expressed on economy, efficiency and effectiveness of business operation. 11 See, to that effect, paragraph 3.4.1 of Opinion

text: . 12 See Opinion

text: . 13 See Opinion

text: and Opinion

text: See paragraph 2.4 of Opinion

text: . 15 See paragraph 3.3 of Opinion

text: See paragraphs 3.1, 3.2 and the third subparagraph in paragraph 3.4 of Opinion

text: . 17 Zakon o integriteti in preprečevanju korupcije (ZIntPK) (Ur. l. RS No 69/11 – official consolidated text). The earlier law on prevention of corruption and the incompatibility of holding public office while running a profitable activity, are no longer in force. 18 See, e.g. Articles 13, 26, 28 and 45 of the Law on integrity and prevention of corruption).

text: See the amendment of Article 52 of the Law on Banka Slovenije and of Article 25 of the Law on the Court of Audit. 20 For the definition of the regularity and performance audits from the Law on the Court of Audit see footnote 10. 21 Similarly, see paragraph 3.3 in Opinion

text: . It is noted that Article 2 of the Law on Banka Slovenije does not contain a prohibition against the Government and other bodies giving instructions to Banka Slovenije or seeking to influence the members of its decision-making bodies; however such prohibition is contained in Article 130 of the Treaty and Article 7 of the Statute of the ESCB.

text: See paragraph 5.2 of Opinion

text: and paragraph 3 of Opinion

text: . 23 See, for example, page 22 of the ECB’s Convergence Report 2014. 24 Pursuant to Article 2 of the Law on Banka Slovenije, the principle of central bank independence should be respected not only when Banka Slovenije performs ESCB-related tasks, but also when it performs national tasks. 25 See paragraph 5.1 and 5.2 of Opinion

text: and paragraph 5.3 of Opinion

text: . 26 See, for example, p. 23 of the ECB’s Convergence Report 2014.

text: See, for example, p. 27 of the ECB’s Convergence Report 2014. 28

text: Council Regulation (EC) No 2533/98 of 23 November 1998

text: concerning the collection of statistical information by the European Central Bank (OJ L 318, 27.11.1998, p. 8).

text: Directive

text: of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive

text: and repealing Directives

text: and

text: (OJ L 176, 27.6.2013, p. 338). 30 Directive

text: of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EEC

text: , and Directives

text: and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and of the Council (OJ L 173, 12.6.2014, p. 190). 31 Articles 26(4) and 47(2) of the Law on Banka Slovenije, as proposed under the draft law. 32 Directive

text: of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (OJ L 281, 23.11.1995, p.31).

text: See Opinion

text: , Opinion

text: and Opinion

text: . 34 The main opinions are

text: and

text: . 35 See the ECB’s Convergence Report June 2014, p. 23. 36 Currently, staff matters at Banka Slovenije are regulated with acts adopted by Banka Slovenije and in accordance with the Law governing employment relationships (see Article 42 of the Law on Banka Slovenije).

title: Opinion of the European Central Bank of 18 December 2015 on certain amendments to Banka Slovenije’s institutional framework (CON/2015/57)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 18 December 2015 on certain amendments to Banka Slovenije’s institutional framework (

text: ) Introduction and legal basis

text: On 22 October 2015 the European Central Bank (ECB) received a request from the President of the National Assembly of the Republic of Slovenia for an opinion on a draft law amending the Law on Banka Slovenije (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

text: Article 2(1) of Council Decision 98/415/EC

text: , as the draft law relates to Banka Slovenije. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: The draft law, prepared and submitted to the Slovenian National Assembly by a group of its deputies, 2 3 proposes amendments to the Law on Banka Slovenije , the Law on the Court of Audit , the Law on 4 5 6 banking , the Law on civil servants and the Law on the public sector salary system , which would bring about changes to Banka Slovenije’s institutional framework. In particular, the draft law: (a) proposes changes to the procedure and grounds for removing a member of Banka Slovenije’s Governing Board from office, by stipulating that the National Assembly is to decide on their removal from office if they are in breach of the law or the Constitution or where the Court of Audit of the Republic of Slovenia calls for their dismissal. Additionally, the draft law proposes that the incompatibility of functions of a member of Banka Slovenije’s Governing Board, which may lead to their termination or removal from office by the National Assembly, is to be determined by the Commission for the Prevention of Corruption of the Republic of Slovenia. Moreover, the draft law proposes deleting a currently applicable provision according to which, in the event that specific

text: laws are breached, early termination of office, which is a sanction provided for in those laws, shall not apply to Banka Slovenije’s Governing Board members; (b) proposes that the Court of Audit of the Republic of Slovenia shall carry out regularity and performance audits of Banka Slovenije’s operations as well as carry out audits of Banka Slovenije’s supervisory activities. In this regard, the draft law also permits confidential bank data to be shared with the Court of Audit; (c) provides that, in addition to the representative from the National Assembly’s committee in charge of finance and monetary policy and the Minister for Finance, a representative of the National Assembly’s committee in charge of supervision of public finances may be a non-voting participant in Banka Slovenije’s Governing Board meetings; (d) increases Banka Slovenije’s reporting requirements to the National Assembly, in particular with regard to banks that received State aid, and adds that the receiving body must protect such information, in line with the laws regulating confidential information; (e) prohibits any of Banka Slovenije’s Governing Board members, other than the Governor, from being employed by Banka Slovenije, and prohibits the Governor from chairing Banka Slovenije’s Governing Board; (f) states that Banka Slovenije must prepare and implement a financial plan, an employment and dismissal policy, and must use resources for salaries in accordance with the laws and regulations applicable for direct and indirect State ‘budget users ’. The draft law further introduces provisions that include Banka Slovenije’s staff under the definition of ‘public servants’ and that specify that Banka Slovenije is to use the public sector salary system as regards its staff; (g) limits the number of possible terms of office of a governor and other members of Banka Slovenije’s Governing Board to two; and (h) gives Banka Slovenije’s Governor the possibility to dismiss directors or deputy directors of its departments without providing any grounds.

text: 2. General observations

text: The draft law proposes changes to Banka Slovenije’s institutional framework, some of which are identical to or adding to changes already proposed by two previous legislative initiatives on which the ECB issued Opinions

text: and

text: , which were not adopted by the National Assembly. The ECB now reiterates the views expressed in the two opinions where they are applicable to the draft law and supplements them as follows.

text: 3. Removing a member of Banka Slovenije’s decision-making bodies from office and other changes concerning Banka Slovenije’s decision-making bodies

text: 3.1 As explained in its previous opinions, Article 130 of the Treaty, as reflected in Article 7 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’), lays down the principle of central bank independence, which prohibits national central banks (NCBs) and members of their decision-making bodies from seeking or taking instructions from external parties, and prohibits governments of the Members States from seeking to influence the members of the NCB’s decision-making bodies. A core element of this principle is the personal independence of the members of an NCB’s decision-making bodies, as reflected in Article 14.2 of the Statute of the ESCB. In particular,

text: Article 14.2

text: provides, inter alia, that governors may only be relieved from office if they no longer fulfil the conditions required for the performance of their duties or if they have been found guilty of serious misconduct, with the possibility of recourse to the Court of Justice of the European Union. The purpose of Article 14.2 of the Statute of the ESCB is to prevent the authorities involved in the appointment of governors, particularly the government or parliament, from exercising their discretion to dismiss a governor, which would be contrary to the principle of personal independence of the members of the NCB’s decision-making bodies. Since

text: Article 14.2

text: is directly applicable, NCB statutes should either contain grounds for dismissal in line with

text: Article 14.2

text: , or should omit any mention of such grounds. As consistently noted in the ECB’s convergence reports and opinions, personal independence would be jeopardised if the same rules did not also apply to other members of NCB decisionmaking bodies involved in the performance of European System of Central Bank- (ESCB-) related tasks. Various provisions of the Treaty and the Statute of the ESCB require comparable security of tenure. Article 14.2 of the Statute of the ESCB does not restrict the security of tenure to the governor’s office, while Article 130 of the Treaty and Article 7 of the Statute of the ESCB refer to members of the decision-making bodies of NCBs rather than to governors specifically. This applies in particular where a governor is ‘first among equals’ as regards colleagues with equivalent voting rights or where such other members are involved in the performance of ESCB-related tasks . 3.2

text: Article 39(1)

text: (4) of the Law on Banka Slovenije, as proposed under Article 8 of the draft law, provides for a member of Banka Slovenije’s Governing Board to be removed from office if they have failed to act in accordance with the law or the Constitution. The subsequent paragraphs of

text: Article 39

text: , as proposed under the draft law, set out the procedure for bringing this ground for dismissal, which is to be based on an allegation of a breach of the law or the Constitution and which requires a call for evidence. Further, the National Assembly working body responsible for finance and monetary policy is required to assess the initiative for removal from office and, subsequently, submit to the National Assembly a proposal to dismiss a member of Banka Slovenije’s Governing Board on the basis of a found breach of the law or the Constitution, after

text: which time the National Assembly must then decide on whether the member should be removed.

text: Article 39(1)

text: (5) of the Law on Banka Slovenije, as proposed under Article 8 of the draft law, provides that a member of Banka Slovenije’s Governing Board may be removed from office if the Court of Audit issues a call to relieve them from their office. Again, the subsequent paragraphs of

text: Article 39

text: , as proposed under the draft law, set out the procedure for bringing this ground for dismissal, which is to be based in this situation on an audit report from the Court of Audit. According to

text: Article 39(4)

text: , as proposed under the draft law, such report may include allegations of irregularities and of underperformance . 3.3 As a preliminary point, the ECB recommends that the procedures, including any initiative of the National Assembly for the dismissal of Banka Slovenije’s Governing Board members, should be kept clearly distinct from the substantive provisions on the grounds for dismissal, i.e. in a separate legal provision, to ensure full consistency with the provisions of the Statute of the ESCB . 3.4 Further, the ECB understands, in view of the explanation in the explanatory memorandum, that these two grounds for dismissal aim to define the concept of ‘serious misconduct’ contained in Article 14.2 of the Statute of the ESCB. However, on the one hand,

text: Article 39(1)

text: (4) and (5), as proposed under the draft law, broaden the scope of ‘serious misconduct’, for which not every breach of law or negative regularity or performance audit is tantamount to or analogous with serious misconduct. On the other hand, points 4 and 5 may be seen as limiting the scope of the Union’s legal concept of ‘serious misconduct’ to situations covered only by those two grounds. In this respect, it is also noted that serious misconduct may not necessarily lead to a call for dismissal from the Court of Audit. Consequently,

text: Article 39(1)

text: (4) and (5), as proposed under the draft law, add two new grounds for dismissal that are not provided in, and are therefore in addition to, those stipulated under Article 14.2 of the Statute of the ESCB. In conclusion, the national legislator should not specify what amounts to serious misconduct . 3.5 Furthermore, as already pointed out in its earlier opinions, the ECB has previously commented favourably on dismissal procedures where the finding of a breach of law had been within the remit of the judicial system . However, the draft law entrusts a National Assembly working body, and not an independent judicial body, with the competence to determine whether the law or the Constitution has been breached. Thus, the dismissal of a Governing Board member may be based on a discretionary assessment by a National Assembly working body, whereas the purpose of Article 14.2 of the Statute of the ESCB is to prevent competent authorities, typically the government or parliament, from exercising their discretion on the grounds to dismiss a governor.

text: 3.6 In addition to the proposed changes addressed above, Article 7 of the draft law proposes that Article 38(3) of the Law on Banka Slovenije should be amended so that the Commission for the Prevention of Corruption would establish the compatibility of functions and their subsequent assignment of functions following the appointment of Governing Board members. In this regard, it is first recalled that the incompatibility of functions referred to in

text: Article 39(1)

text: (2) of the Law on Banka Slovenije, which lays down the conditions for the dismissal from office of the members of the Governing Board, is understood to only address the situations of incompatibility defined in Article 38(2) of that Law. In this respect, the ECB reiterates the view expressed in its Convergence 14 15 Report of May 2006, Opinion

text: and Opinion

text: that inserting an explicit cross-reference to

text: Article 38

text: in

text: Article 39(1)

text: (2) would be welcome for legal certainty reasons. In addition, it should be clarified that

text: Article 39(1)

text: (2) of the Law on Banka Slovenije is a ‘condition required for the performance of duties’ within the meaning of Article 14.2 of the Statute of the ESCB, and not a ground for dismissal in addition to the two grounds provided by Article 14.2 of the Statute of the ESCB, as described in paragraph 3.1 above. 3.7 As has been consistently noted by the ECB in its Convergence Reports, membership of a decisionmaking body involved in the performance of ESCB-related tasks is, as a matter of principle, incompatible with the exercise of other functions that could create a conflict of interest. This is a key aspect of the personal independence of members of an NCB’s decision-making bodies. Further, the ECB has noted – with regard to the grounds for a Governor’s dismissal – that the principle of personal independence applies from the moment a Governor is elected or appointed, even if the Governor has not yet taken up his or her duties. In order to safeguard this principle of personal independence, the ECB considers that an assessment of compatibility of functions should be carried out before a member is appointed to an NCB’s decision-making body. Otherwise, there is the possibility of a conflict of interest between the other functions carried out by such member and the performance of his or her ESCB-related tasks. Here, the issue of potential conflicts appears to be addressed through the provision, in Article 38(3) of the Law on Banka Slovenije, that the Governor may not begin performing his or her functions until any incompatibility has been removed. Thus, in this respect, the procedure for assessing the compatibility of functions appears to be in line with the principle of personal independence, provided that the ECB’s comments made below with regard to

text: Article 38(2)

text: (5) are taken into account. 3.8 Furthermore, according to Article 38(4) of the Law on Banka Slovenije, as proposed under Article 7 of the draft law, the Commission for the Prevention of Corruption also establishes the existence of an incompatibility of functions arising after a Governing Board member has been appointed. However, it appears that this is not wholly consistent with Article 39(6) of the Law on Banka Slovenije, in conjunction with

text: Article 39(1)

text: (2), which state that a Governing Board member may be relieved from office when the National Assembly has established that there are grounds for the incompatibility of functions. As provided for in

text: Article 38(2)

text: (5) of the Law on Banka Slovenije, ‘other work or activities that might affect their members’ independence or could conflict with Banka Slovenije’s interestsʼ may be considered to be a function that is incompatible with the position of a

text: Governing Board member. The provision of

text: Article 38(2)

text: (5) of the Law on Banka Slovenije involves a discretionary assessment on what affects the independence of, or constitutes a conflict of interest for, the Governing Board members. Given that incompatibilities may lead, under the terms of the draft law, to the dismissal of Governing Board members, and given that their dismissal should not be subject to a discretionary assessment of the National Assembly, this provision raises concerns as regards the personal independence of the Governing Board members. Thus, for reasons of clarity and legal certainty, the ECB recommends that the draft law should specify that the National Assembly is only allowed to establish that grounds for incompatibility of functions exist if the Commission for the Prevention of Corruption has already made such a finding. 3.9 In any event, it is not clear whether the Commission for the Prevention of Corruption would be competent to assess the full range of circumstances that would be incompatible with the role of a Governing Board member. In assessing the compatibility of functions, the Commission for the Prevention of Corruption will examine the points outlined in Article 38 of the Law on Banka Slovenije. However, as noted above,

text: Article 38(2)

text: (5) involves a discretionary assessment of what constitutes a conflict of interest – the objective being to ensure that no situation exists that would be incompatible with the function of a Governing Board member. Such incompatibilities may or may not relate to the sphere of corruption. Yet, it is not clear from the draft law whether the Commission for the Prevention of Corruption would have the mandate to assess incompatibilities that extend beyond its scope of competence. Thus, the ECB recommends that Banka Slovenije’s Governing Board should retain the power to determine whether there are incompatibilities between the roles of members of the Governing Board and their other roles, insofar as such incompatibilities fall outside the mandate of the Commission for the Prevention of Corruption. 3.10 Article 9 of the draft law removes

text: Article 39

text: .a of the Law on Banka Slovenije, which currently states that ‘the provisions of the law governing the prevention of corruption and the law governing the incompatibility of holding public office while simultaneously running a profitable activity, respectively, which contain the sanction of early termination of the term of office, shall not apply to Banka Slovenije’s Governing Board members’. As explained in the Convergence Report of May 2006, as well as in Opinion

text: in relation to the Law on integrity and prevention of corruption the aim of

text: Article 39

text: .a, together with Articles 38 and 39 of the Law on Banka Slovenije, is to provide that members of Banka Slovenije’s decision-making bodies can only be removed on grounds and using procedures that are compatible with the Treaty and the Statute of the ESCB and laid down in the Law on Banka Slovenije. With the deletion of

text: Article 39

text: .a, the ECB notes that the Law on integrity and prevention of corruption contains provisions indicating that breaches of some of the requirements thereunder may lead to early termination of office . It should be ensured that the sanctions do not constitute new grounds and procedures to remove members of Banka Slovenije’s decision-making bodies from office, in addition to those compatible with the Treaty and the Statute of the ESCB that are laid down in the Law on Banka Slovenije.

text: 3.11 The draft law also proposes additional changes concerning Banka Slovenije’s decision-making bodies. Banka Slovenije has two decision-making bodies: the Governor and the Governing Board. The Governing Board is composed of five members, i.e. the Governor and four Vice-Governors. The draft law prohibits any of Banka Slovenije’s Governing Board members, other than the Governor, from being employed by Banka Slovenije, and does not allow the Governor to chair Banka Slovenije’s Governing Board. 3.12 Firstly, as highlighted in the ECB’s 2014 Convergence Report, the ECB is not limited to making a formal assessment of the letter of national legislation, but may also consider whether the implementation of the relevant provisions complies with the spirit of the Treaty and the Statute of the ESCB. The ECB is particularly concerned about any signs of pressure being put on any NCB’s decision-making bodies that would be inconsistent with the spirit of the Treaty as regards central bank independence. In this respect, the ECB recalls that the office of an NCB’s Governor is accorded special status due to his or her capacity to act as a member of the ECB’s Governing Council. The fact that this special status should be fully respected has led to the common practice among NCBs that the Governor is seen as ‘first among equals’ where decisions are taken by boards as collegiate NCB decision-making bodies. However, by providing that Banka Slovenije’s Governor may not chair the Governing Board, the draft law departs from this practice and, as such, could be seen as an attempt to undermine the Governor’s authority. Consequently, the suggested amendment to Article 30(2) of the Law on Banka Slovenije is, in itself, capable of jeopardising the Governor’s personal independence. 3.13 The ECB considers that the draft law is unclear with regard to the nature of the powers of the new Governing Board President and the division of competences that would exist between the other Board members and the Governor. In particular, it is unclear whether the powers accorded to the Governor under Banka Slovenije’s statute and rules of procedure would be construed as references to the powers of the new President of the Governing Board. In the ECB’s view, it is imperative that the draft law provide clarity in terms of: (a) the precise scope of the powers and tasks to be assigned to the President of the Governing Board; (b) the limits of the competence of the President of the Governing Board, in particular as regards whether the role will have decisionmaking powers; and (c) the position of the President in Banka Slovenije’s organisational structure, for instance, whether or not Banka Slovenije’s staff members will report directly to the President of the Governing Board. The latter would raise additional concerns as regards the Governor’s personal independence, if the Governor were not the President of the Governing Board. Without clarity in these respects, the ECB is concerned that Banka Slovenije’s decision-making processes will be undermined. 3.14 It is also emphasised that any changes to the Governor’s mandate can only be made in respect of future appointments, in order to ensure the existing Governor’s personal independence.

text: 4. Auditing of Banka Slovenije by the national Court of Audit

text: 4.1 The draft law, with Articles

text: and

text: , proposes entrusting the Court of Audit with the competence to carry out regularity and performance audits of Banka Slovenije’s operations as well as to audit Banka Slovenije’s supervisory activities . 4.2 In relation to the proposal to entrust the Court of Audit with the competence to carry out audits on the regularity and performance of Banka Slovenije’s operations , the ECB reiterates the view expressed in Opinion

text: . Accordingly, the competences that a state audit office or similar body, such as the Court of Audit, may hold with respect to NCB activities and use of public finances, are compatible with the principle of central bank independence when the following safeguards are in place: (a) the scope of the control should be clearly deﬁned by the legal framework; (b) the activities of the NCB’s independent external auditors should not be prejudiced; (c) in line with the principle of institutional independence, as enshrined in Article 130 of the Treaty and Article 7 of the Statute of the ESCB, the audit should: (i) comply with the prohibition on giving instructions to an NCB and its decision-making bodies; (ii) not interfere with the NCB’s ESCBrelated tasks; and (iii) be carried out on an apolitical, independent and purely professional basis. On the basis of the above, the scope of the control is defined in the draft law, through the provisions of the Law on the Court of Audit, which define the concepts of regularity and performance audits. However, with a view to respecting the institutional independence of Banka Slovenije, the draft law should specify that the Court of Audit may not give instructions to Banka Slovenije, nor may it seek to influence the members of Banka Slovenije’s decision-making bodies in situations where this may have an impact on Banka Slovenije’s fulfilment of its ESCB-related tasks . Additionally, the activities of Banka Slovenije’s independent external auditor, which the Council approves pursuant to Article 27.1 of the Statute of the ESCB, should not be prejudiced. 4.3 The ECB recommends that the draft law should define the precise scope of the audit provided as regards Banka Slovenije’s supervisory activities so as to ensure that the principle of independence set out in

text: Article 19 of Council Regulation (EC) No 1024/2013

text: , as well as the limitations provided in Article 27.2 of the Statute of the ESCB and

text: Article 20(7) of Council Regulation (EC) No 1024/2013

text: as regards the supervisory tasks conferred on the ECB by

text: Regulation (EU) No 1024/2013

text: , are respected. Further, in line with the principle of independence set out in

text: Article 19 of Regulation (EU) No 1024/2013

text: , the ECB recommends that the audit carried out by the Court of Audit on Banka Slovenije’s supervisory activities should: (a) not extend to the application and interpretation of supervisory law and practices; (b) not interfere with the tasks conferred on the ECB by

text: Regulation (EC) No 1024/2013

text: , nor be extended to result in an indirect audit of the ECB; and (c) be carried out on a non-political, independent and purely professional basis.

text: 5. Participation by representatives of third parties in Banka Slovenije’s Governing Board meetings

text: The proposed changes under the draft law that extend the right to participate in meetings of Banka Slovenije’s Governing Board to the representative of the committee of the National Assembly responsible for the supervision of public finances are fully identical to the previously proposed changes The ECB hereby reiterates that the principle of central bank institutional independence, enshrined in Article 130 of the Treaty and Article 7 of the Statute of the ESCB, renders the participation by representatives of third parties in an NCB’s decision-making body with a right to vote on matters concerning the performance by the NCB of ESCB-related tasks incompatible with the Treaty and the Statute of the ESCB, even if such a vote is not decisive . Furthermore, the principle of central bank institutional independence also renders the participation of third party representatives, without a right to vote in the meetings of an NCB’s decision-making body entrusted with the performance of ESCB-related tasks, incompatible with the Treaty and the Statute of the ESCB, if such participation interferes with the performance of ESCB-related tasks by that decision-making body or endangers compliance with the ESCB’s confidentiality regime.

text: 6. Reporting by Banka Slovenije to the National Assembly and confidentiality of information

text: 6.1 The proposed amendments to Article 26 of the Law on Banka Slovenije with regard to Banka Slovenije’s reporting to the National Assembly and the proposed amendment to Article 47 of the Law on Banka Slovenije on the protection of confidential data, as well as the proposed amendment to Article 16 of the Law on Banking with regard to Banka Slovenije sharing confidential supervisory information with the Court of Audit for the purposes of the proposed audit of Banka Slovenije’s supervisory activities, as proposed under Articles 1, 12 and 15 of the draft law, should be assessed with regard to applicable Union law. 6.2 First, the proposed new Article 26(3) of the Law on Banka Slovenije specifies that the report addressed to the National Assembly should describe the work and the performance of the tasks of each of Banka Slovenije’s Governing Board members separately. However, the Governing Board is a collegial body; accountable as a whole to the National Assembly. Depending on the level of detail required for such a report, this provision raises concerns regarding Banka Slovenije’s institutional independence and the personal independence of the Governing Board members. The draft law should contain adequate safeguards in order to ensure that: (a) the reporting obligations do not interfere with the independence of the Governing Board members as provided for in Article 130 of the Treaty and Article 7 of the Statute of the ESCB; (b) the special status of governors in their capacity as members of the ECB’s decision-making bodies is fully respected; and (c) confidentiality requirements pursuant to the Statute of the ESCB are observed .

text: 6.3 Second, as pointed out by the ECB in its Convergence Reports , the obligation of professional secrecy for ECB and NCB staff under Article 37 of the Statute of the ESCB may give rise to similar provisions in NCBs’ statutes or in Member States’ legislation. The primacy of Union law and rules adopted thereunder also means that national laws on third party access to documents may not result in infringements of the ESCB’s confidentiality regime. Access to an NCB’s information and documents must be without prejudice to the ESCB’s confidentiality regime, to which the members of NCBs’ decision-making bodies and staff are subject. Where access to an NCB’s information and documents is allowed under Union law, the NCBs should ensure that the receiving bodies protect the confidentiality of information and documents disclosed at a level corresponding to that applied by the NCBs themselves. Therefore, any provision of information permitted by the proposed amendments to Article 26 of the Law on Banka Slovenije with regard to Banka Slovenije’s reporting to the National Assembly and the proposed amendment to Article 47 of the Law on Banka Slovenije on protection of confidential data should comply with applicable Union laws, including those governing the exchange of statistical and supervisory information, as well as the obligation of professional secrecy. In this respect, the ECB welcomes that Articles 26 and 47 of the Law on Banka Slovenije, as proposed under the draft law, include a provision that confidential information contained in reports to the National Assembly must be handled in accordance with the laws governing the protection of confidential information. However, it should be clear that the proposed amendments refer not only to national laws in this respect but also to Union law, including Article 37 of the Statute of the ESCB. For purposes of clarity and to avoid doubt, the ECB suggests inserting a specific reference to the obligation of professional secrecy laid down in Article 37 of the Statute of the ESCB in the amendments to Articles 26 and 47 of the Law on Banka Slovenije. In addition, the ECB recommends that the conditions for disclosing confidential information to the National Assembly, as referred to in paragraphs 6.4 and 6.5, are also respected when Banka Slovenije reports to the National Assembly. Furthermore, without prejudice to the ECB’s observations regarding the specific protection of statistical or supervisory information laid down in Union law and referred to in paragraphs 6.4 and 6.5, the ECB emphasises that confidential information may be exchanged only if necessary for the performance of the tasks of the body that receives the information. In this context, and subject to compliance with the conditions in paragraph 5 regarding participation of third party representatives in Banka Slovenije’s Governing Board meetings, a representative of the National Assembly’s committee for finance and monetary policy may participate in meetings of the Governing Board where they can become privy to any confidential information, including the details on granting State aid to credit institutions. 6.4 Third, with respect to the exchange of confidential statistical information, it is reiterated that according to

text: Article 8(3) of Council Regulation (EC) No 2533/98

text: , ESCB members shall take all the necessary regulatory, administrative, technical and organisational measures to ensure the physical and logical protection of confidential statistical information. The ECB recalls that

text: confidential statistical information collected pursuant to

text: Council Regulation (EC) No 2533/98

text: may only be used for the purposes defined in Article 8(1) of that Regulation, in particular for the exercise of the tasks of the ESCB and, as regards NCBs, in the field of prudential supervision or for other statutory NCB tasks. 6.5 Fourth, as stated in Opinion

text: , while

text: Article 59(2) of Directive 2013/36/EU

text: of the European Parliament and of the Council and

text: Article 84(5) of Directive 2014/59/EU

text: of the European Parliament and of the Council allow Member States to, under certain conditions, authorise the disclosure of certain information relating to the prudential supervision of institutions to parliamentary enquiry committees, courts of auditors and other entities in charge of enquiries in their Member State, such disclosure should not be made to the National Assembly per se. With regard to the amendments in the draft law to protect confidential information , additional safeguards for the exchange of confidential information with a parliamentary inquiry committee and the Court of Audit as referred to in

text: Article 59(2) of Directive 2013/36/EU

text: must always be observed: (a) the parliamentary enquiry committee and the Court of Audit must have a ‘precise mandate’ under national law; (b) the information must be ‘strictly necessary’ for fulfilling that mandate; (c) persons with access to the information are subject to professional secrecy requirements under national law that are at least equivalent to those referred to in

text: Article 53(1) of Directive 2013/36/EU

text: ; (d) where the information originates in another Member State, it is not disclosed without the express agreement of the competent authorities that have disclosed it, and solely for the purposes for which those authorities gave their agreement; and (e) to the extent that the disclosure of information relating to prudential supervision involves processing of personal data, any processing by the parliamentary enquiry committee or the Court of Audit must comply with national law transposing Directive

text: of the European Parliament and of the Council . Furthermore, the above conditions should be applied not only to information that is confidential under Directive

text: but also to information that is confidential under other Union or national law provisions.

text: 7. Amendments to the Banka Slovenije’s staff status and other amendments

text: 7.1 The draft law states that Banka Slovenije must prepare and implement a financial plan, employment and dismissal policy, and must use resources for salaries in accordance with the laws and regulations applicable for direct and indirect State budget users. While the ECB welcomes the fact that the preparation and implementation of the necessary plans are left to Banka Slovenije, the

text: restrictions placed on Banka Slovenije’s discretion by the laws and regulations in question raise concerns. As indicated in the ECB’s convergence reports, Member States may not put their NCBs in a position where they have insufficient financial resources to carry out their ESCB-related tasks. Additionally, the principle of financial independence requires an NCB to have sufficient means not only to perform its ESCB-related tasks, but also its national tasks. Thus, the implementation of a financial plan in accordance with the applicable laws and regulations and its impact on Banka Slovenije’s financial independence needs to be sufficiently addressed in the draft law. 7.2 Further, Member States may not impair an NCB’s ability to employ and retain the qualified staff necessary for the NCB to perform independently the tasks conferred on it by the Treaty, the Statute of the ESCB and national legislation. Additionally, an NCB may not be put into a position where it has limited control or no control over its staff, or where the government of a Member State can influence its policy on staff matters . In this regard, the ECB understands, in particular, that the laws and regulations applicable for direct and indirect State budget users impose strict limits on remuneration – through set salary structures and salary bands – which may entail a decrease in salaries for Banka Slovenije staff. Any amendment to the legislative provisions on the remuneration for members of an NCB’s decision-making bodies and its employees should be decided in close and effective cooperation with the NCB, taking due account of its views, to ensure the ongoing ability of the NCB to independently carry out its tasks and, hence, its financial independence. In addition, any changes that may affect the remuneration of Banka Slovenije’s Governing Board members should, as a matter of principle and in order to ensure the independence of those members, apply only in respect of future appointments . Similarly, any alteration to the remuneration of Banka Slovenije’s Governing Board members that results from changes made pursuant to the Law on the public sector salary system should, again as a matter of principle, apply only in respect of future appointments. 7.3 The draft law also proposes that Banka Slovenije staff are to be subject to the laws and regulations governing public servants and, additionally, that such staff and Banka Slovenije’s Governing Board members should be subject to the public sector salary system . Since the proposed amendments withdraw Banka Slovenije’s authority to determine the legal relationships and career policies for all categories of staff and transfer this authority to the government, the ECB considers them to reduce Banka Slovenije’s independence. The ECB therefore recommends that sufficient safeguards be introduced, at least for example by providing that Banka Slovenije continues to autonomously regulate certain features of the legal relationships and career policies for all categories of staff, in order to ensure that Banka Slovenije’s ability to carry out all its tasks, particularly its ESCB-related tasks, will not be affected. 7.4 Finally, the proposal that gives Banka Slovenije’s Governor the possibility to dismiss the directors or deputy directors of its departments without providing any grounds is, in principle, a matter of

text: national law. Nevertheless, if adopted, the mere existence of such a possibility could have a negative impact on Banka Slovenije’s efforts to attract qualified staff. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 18 December 2015. [signed]

text: The President of the ECB

text: Mario DRAGHI