text: OJ L 189, 3.7.1998, p. 42.

text: See Opinion

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

text: See Opinion

text: See General Comments on the draft law (available only in Danish), 2 (Background), and Comments on the specific provisions, Re.: § 1, subsection 1.

text: See the draft law § 1, subsection 3, Re.: § 16g, subsection 3; and Comments on specific provisions of the draft law (only in Danish) § 1, subsection 3,Re.: § 16g, paragraph 7.

text: According to the existing § 6, subsection 4, of the Law on a Guarantee Fund for Depositors and Investors (the unofficial English version is available on the website of the Danish FSA at http://www.ftnet.dk/en/Regler-og-praksis.aspx) the Minister for Economic Affairs may, with the approval of Parliament’s Finance Committee, provide a guarantee for a loan made to the Fund to meet its commitments. With the creation of the new and separate winding-up department of the Fund a similar possibility of taking out a loan with the approval of the Finance Committee will also be provided for, if the

text: resources of this department should not suffice to cover the winding-up obligations of the Fund. See the Comments on specific provisions of the draft law (only in Danish) Re.: § 3, subsection 5, and Re.: §6, subsection 4.

text: See the draft law, § 2, subsection 1.

text: See the General Comments, 1 (Introduction), 2 (Background) and 3.1.2. According to Danish legal tradition, as is also the case in the other Nordic countries, the Comments on a draft law when adopted by Parliament will be binding on the Executive in its implementation and administration of the law, and will also be of strong interpretive value for the courts.

text: See the draft law, paragraph 3.1.2. (available only in Danish) citing also the Commission communication on the return to viability and the assessment of restructuring measures in the financial sector in the current crisis under the State aid rules. (OJ C 195, 19.8.2009, p. 9) .

title: Opinion of the European Central Bank of 28 May 2010 on amendments to the financial stability regime (CON/2010/45)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 28 May 2010 on amendments to the financial stability regime (

text: ) Introduction and legal basis

text: On 16 April 2010 the European Central Bank (ECB) received a request from the Danish Ministry of Economic and Business Affairs for an opinion on a draft law amending the Law on financial stability, the Law on a Guarantee Fund for Depositors and Investors, and the Law on payment of State income tax (the treatment of failing credit institutions after the expiry of the general State guarantee) (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 sixth indent of

text: Article 2(1) of 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 , as the draft law relates to the 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 law

text: 1.1. The draft law will establish a new winding-up regime for failing credit institutions from the expiry date of the Law on financial stability until the normalisation of conditions in the financial markets. 1.2. On 9 October 2008 the ECB was consulted on a draft law on financial stability , and on 21 January 2009 it was consulted on a draft law on State investments in credit institutions and a draft law amending the Law on financial stability . The Law on financial stability established a general State guarantee scheme for ordinary individual creditors and depositors, which expires on 30 September 2010. 1.3. As pointed out in the General Comments on the draft law , the financial crisis has demonstrated to all stakeholders the benefits of a controlled winding-up of a failing credit institution compared to

text: the traditional and often lengthy winding-up procedures and compulsory sales in a bankruptcy. Against this background and also in view of the relatively large number of smaller credit institutions in the Danish banking system, the purpose of the draft law is to provide for the continuation of the Financial Stability Company (hereinafter the ‘Company’), established by the Law on financial stability, as a basis for a more permanent and general regime for handling failing credit institutions. This will facilitate greater transparency in the market on how to value credit default risk and also ensure that the Danish banking sector will continue to benefit from the accumulated expertise on how to handle failing credit institutions. 1.4. In cases where a credit institution is unable to meet the capital adequacy requirements it will have the choice either to transfer its activities to a buyer designated by the Company or to enter normal bankruptcy proceedings. In the former case, the Company will set up a new subsidiary to take over the activities of the failed credit institution with the clear aim of winding it up and of transferring existing customers to other institutions. The Company’s subsidiary will purchase the assets of the failed credit institution, at their realisation value , against payment in the form of the acquisition of a proportional share of its unsubordinated unsecured liabilities. The liabilities exceeding the assets and, therefore, not taken over will remain with the failed credit institution and will be realised according to normal credit institution insolvency rules. Creditors not accepting the change of debtor will remain creditors of the failed credit institution, and they will retain the right to set-off assets against liabilities. The Company injects capital into the new subsidiary in accordance with the capital adequacy requirements of the Law on Danish financial business. If more liquidity is required than can be raised in the central bank’s regular market operations, the Company can provide a liquidity facility, to ensure that the liquidity adequacy requirements are met. The injected capital will earn a market return, to be borne by the subsidiary, which will also cover the Company’s administration costs. 1.5. As a second leg of the new winding-up regime, the Danish Guarantee Fund for Depositors and Investors (hereinafter ‘the Fund’) will set up a Winding-Up Department of the Fund, separated by Chinese walls from the Fund’s ordinary guarantee obligations. This new Winding-Up Department may guarantee loans for the capitalisation and liquidity, and it will bear any losses incurred by the winding-up of the Company’s subsidiary. The capital of the Winding-Up Department will be provided through guarantees from Danish credit institutions, amounting to DKK 3.2 billion (approx. EUR 430 million), and limited to 0.2 percent of the deposits of each institution within one financial year. In the event that the capital requirements exceed the guarantees, the Winding-Up Department can raise loans guaranteed by the State in agreement with the Danish Parliament’s Finance Committee .

text: 1.6. In order to ensure the proper functioning of the new regime, the draft law requires each credit institution to have internal systems in place to enable it to provide within 24 hours all the necessary information regarding its deposit and loan accounts in case it should need to be wound up through the Company .

text: 2. General observations

text: 2.1. The ECB welcomes the fact that the general State guarantee regime will not be extended beyond the expiry date and that it will be replaced by a regime which entails the further disengagement of the State in the winding-up of failing credit institutions in favour of a regime based primarily on financing by the credit institution sector itself. The ECB also welcomes the fact that, as clearly stated in the General Comments on the draft law , a credit institution for which the Financial Supervision Authority has set a deadline to fulfil the solvency criteria must first seek a marketbased solution, and that the new winding-up regime under the Company will be available only in situations where the credit institution considers that it has lost its capital or either is or must expect to be insolvent and only where the credit institution’s own efforts to find a market-based solution have proved unsuccessful. 2.2. The ECB further welcomes the clear mandate for the Minister for Economic and Business Affairs, as set out in the Comments on § 16e, subsection 4, to lay down detailed rules on the conditions for the transfer of the assets and the subsequent winding-up of the failed credit institution which will follow the European Commission’s guidelines for restructuring measures , in order to be compliant with

text: Article 107(3)

text: (b) of the Treaty, so that domestic support measures to failing credit institutions and their terms of application are in accordance with the principle of non discrimination and with competition law rules, and in particular State aid rules, of the Union.

text: 3. Specific comments

text: 3.1. The ECB notes that § 3, subsection 1, of the draft law lays down that the Fund shall assist in the winding-up of credit institutions in financial difficulties under the Law on financial stability. In this regard, § 3, subsection 3, of the draft law states that the Fund shall be divided up into four departments, one of which is the Winding-Up Department. The ECB welcomes the further clarification laid down in § 3, subsections 4 and 6, of the draft law according to which the Winding-Up Department may not take out loans from the other departments and that it shall have its own, separate resources provided by its mandatory contributors. These provisions are important

text: from a legal certainty perspective, as they ensure that ex ante pay-ins by credit institutions to guarantee deposits in case of the insolvency of a credit institution are not used for other purposes such as the voluntary winding-up of credit institutions in financial difficulties. 3.2. The ECB notes that in the event that the capital requirements of the Fund’s Winding-Up Department exceed the guarantees provided, the Winding-Up Department can still raise loans secured by State guarantees in agreement with the Parliament’s Finance Committee. The ECB reminds the consulting authority about the importance of continuing vigilance as to the cost at market rates of this residual State guarantee to raise loans to fund any additional capital requirements of the Winding-Up Department.

text: Done at Frankfurt am Main, 28 May 2010.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 1 June 2010 on amendments to several provisions of the Law on banking (CON/2010/46)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 1 June 2010 on amendments to several provisions of the Law on banking (

text: ) Introduction and legal basis

type: rubrik

text: On 4 May 2010, the European Central Bank (ECB) received a request from the Slovenian Ministry of Finance for an opinion on a draft law amending the Law on banking (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 and sixth indents of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to Banka Slovenije and 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.

type: stycke

text: 1. Purpose of the draft law

text: 1.1 The draft law implements provisions of several directives into Slovenian legislation (Directives 2 3 4 5

text: and

text: ). However, the consulting authority mentions in its consultation request that the draft law also includes a number of provisions amending the current Law on banking that do not relate to transposition of directives. In line with

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

text: , this opinion only covers the latter provisions. 1.2 Several provisions of the draft law are connected with the rules governing the Slovenian deposit guarantee scheme as laid down in the Law on banking. It is an ex post financed scheme, with the necessary funds being provided by the participating credit institutions and, in certain cases, also by the Slovenian State. The draft law clarifies the treatment of certain categories of deposits, taking

text: 1 OJ L 189, 3.7.1998, p. 42.

text: 2 Directive

text: of the European Parliament and of the Council of 16 September 2009 amending Directives

text: and

text: as regards banks affiliated to central institutions, certain own funds items, large exposures, supervisory arrangements, and crisis management (OJ L 302, 17.11.2009, p. 97).

text: 3 Directive

text: of the European Parliament and of the Council of 30 May 1994 on deposit-guarantee schemes (OJ L 135, 31.5.1994, p. 5).

text: 4 Directive

text: of the European Parliament and of the Council of 11 March 2009 amending Directive

text: on deposit-guarantee schemes as regards the coverage level and the payout delay (OJ L 68, 13.3.2009, p. 3).

text: Commission Directive 2010/16/EU of 9 March 2010

text: amending Directive

text: of the European Parliament and of the Council as regards the exclusion of a certain institution from the scope of application (OJ L 60, 10.3.2010, p. 15).

text: 6 Zakon o bančništvu, published in Uradni list Republike Slovenije No 131/2006. into account their nature and their holders and assigns Banka Slovenije certain new and modified tasks relating to the administration of the scheme . In addition, certain existing provisions of the Law on banking which, as stated in the draft law’s explanatory memorandum, might give rise to concerns regarding monetary financing by Banka Slovenije of the State’s obligations under the scheme are amended. 1.3 Pursuant to the Law on banking, credit institutions have established a system for the exchange of information on the credit standing of their clients. The draft law includes certain amendments with respect to the information to be entered and processed in the system and introduces, among other things, a ‘credit score’ indicating a client’s creditworthiness, which is determined on the basis of a common methodology. The draft law also includes a number of minor and editorial amendments to the Law on banking.

text: 2. General observation

text: The ECB would like to point out that any widening of Banka Slovenije's tasks has to be supported by ensuring sufficient human and financial resources, both in terms of quantity and quality, so as to enable performance of these tasks without affecting Banka Slovenije’s capacity to carry out its European System of Central Banks-related tasks.

text: 3. Compliance with the prohibition of monetary financing

text: 3.1 Pursuant to the Law on banking in force today, as amended in the relevant part by an amendment to the Law on banking in 2008 , which was not subject to a consultation procedure with the ECB, the Slovenian State shall guarantee repayment of (i) guaranteed deposits held at a bank subject to bankruptcy proceedings above the amount covered by the inter-bank deposit guarantee scheme; and (ii) guaranteed deposits up to the abovementioned amount if banks with their head offices in the Republic of Slovenia cannot provide sufficient funds . From the date of the initiation of bankruptcy proceedings, Banka Slovenije will assume on its own behalf and for the account of the Slovenian State the obligation to repay such guaranteed deposits . These provisions imply that Banka Slovenije is obliged to repay the guaranteed deposits before obtaining the relevant funds from the guarantor, i.e. the Slovenian State. This raises the issue of compatibility with the prohibition on monetary financing under Article 123 of the Treaty, according to which the ECB and the national central banks (NCBs) may not, inter alia, provide overdraft facilities or any other type of credit

text: 7 These tasks include the adoption of implementing measures, monitoring of the scheme’s mechanisms, processing of information from participating institutions and informing depositors and the public about bankruptcy proceedings and the conditions for exercising the right to repayment of guaranteed deposits.

text: 8 Zakon o spremembah in dopolnitvah Zakona o bančništvu (ZBan-1B) (Uradni list Republike Slovenije No 109/2008). facility in favour of the public sector . The Law on banking can be understood as providing for financing of the deposit guarantee scheme by Banka Slovenije, which would be incompatible with the monetary financing prohibition under Article 123 of the Treaty . 3.2 In view of the above, the ECB welcomes the draft law according to which the Slovenian State will have to ‘provide funds’ rather than only a ‘guarantee’ in the event of activation of the deposit guarantee scheme , while the provisions obliging Banka Slovenije to provide funds for the repayment of guaranteed deposits of insolvent banks, on its own behalf against a State guarantee, are removed . As a consequence, any payouts by Banka Slovenije under Article 315(3) of the Law on banking will always be made using funds provided by participating credit institutions (or obtained by realising their assets) and, if necessary, funds provided in advance by the Slovenian State. The ECB is of the view that these draft amendments establish an assurance that there will be no financing of the deposit guarantee scheme contrary to the abovementioned Treaty requirements. 3.3 In line with these draft amendments and for reasons of legal clarity, the ECB would recommend an alignment of the wording of other related provisions of the Law on banking to reflect that the Slovenian State is providing funds rather than a guarantee . This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 1 June 2010. [signed] The President of the ECB Jean-Claude TRICHET

text: 11 See also

text: Council Regulation (EC) No 3603/93 of 13 December 1993

text: specifying definitions for the application of the prohibitions referred to in Articles

text: and

text: b(1) of the Treaty [now Articles 123 and 125(1) of the Treaty on the Functioning of the European Union] (OJ L 332, 31.12.1993, p. 1).

text: 12 National legislation providing for the financing by an NCB of a national deposit insurance scheme for credit institutions would only be compatible with the monetary financing prohibition if it were short term, addressed urgent situations, systemic stability aspects were at stake and decisions were at the NCB’s discretion; see the ECB Convergence Report of May 2010, p. 33. Relevant ECB opinions in this area are, e.g., paragraphs 11-14 of Opinion

text: ; paragraphs 11-13 of Opinion

text: ; paragraphs 2.1-2.3 of Opinion

text: ; paragraphs 2.2-2.8 of Opinion

text: ; and paragraph 3.2 of Opinion

text: . All ECB opinions are available on the ECB website at www.ecb.europa.eu.

text: 13 Article 63 of the draft law, amending Article 313(2) of the Law on banking, and Article 66 of the draft law, amending Article 316(1) of the Law on banking.

text: 14 Article 65 of the draft law.

text: 15 See, in particular, Article 66 of the draft law, amending Article 316(1) of the Law on banking, and its erroneous reference to a ‘guarantee’ in relation to Article 313(2) of the Law on banking.

type: vagledning

utgivare: ecb


text: OJ L 177, 30.6.2006, p. 1. 2 OJ L 177, 30.6.2006, p. 201. 3 OJ L 189, 3.7.1998, p. 42. 4 Concerning uniform principles for the recognition of hybrid capital elements as core capital, regulations for securitisations and re-securitisations and more stringent requirements for disclosure, a change in the large exposures regime for better inclusion of concentration risks and a strengthening of cooperation between the national supervisory authorities in the European Economic Area. 5 Directive

text: of the European Parliament and of the Council of 6 May 2009 amending Directive

text: on settlement finality in payment and securities settlement systems and Directive

text: on financial collateral arrangements as regards linked systems and credit claims (OJ L 146, 10.6.2009, p. 37).

title: Opinion of the European Central Bank of 14 June 2010 on amendments to the Law on covered bonds (Pfandbriefe) (CON/2010/47)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 14 June 2010 on amendments to the Law on covered bonds (Pfandbriefe) (

text: ) Introduction and legal basis

text: On 6 April 2010, the European Central Bank (ECB) received a request from the German Federal Ministry of Finance for an opinion on a draft law on the implementation of the amended Directive

text: of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (recast) (hereinafter referred to as the ‘Banking Directive’) and of the amended Directive

text: of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (recast) (hereinafter the ‘Capital Adequacy Directive’) (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, fifth and sixth indents of

text: Article 2(1) of 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 , as the draft law relates to the Deutsche Bundesbank, to payment and settlement systems and 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 law

text: The draft law is principally aimed at implementing the amendments to the Banking Directive and the 4 5 Capital Adequacy Directive , as well as Directive

text: . Independently of this, the draft law

text: updates the Law on covered bonds (Pfandbriefe) in three main respects. First, it aims to strengthen the legal status of cover pools (and the Pfandbrief liabilities attaching to them with top priority) as organisations in their own right – distinct from the insolvent estate of a bank dealing in covered bonds (Pfandbrief bank). Second, it seeks to clarify the supervisory status of cover pools as licensed banks, since they may have activities requiring a licence. Third, it further strengthens the powers of cover pool administrators (Sachwalter) who may take all actions necessary to ensure the proper servicing of outstanding Pfandbriefe – including entering into transactions for obtaining additional liquidity for this purpose. The cover pools (Deckungsmasse) for the Pfandbriefe consist of loans and securities fulfilling statutory requirements, entered in a special register, for the sole purpose of safeguarding the liquidation of issued Pfandbriefe. Legally, cover pools do not form part of the insolvent estate of the Pfandbrief bank. Cover pool assets are thus kept separate from the insolvent estate and from other cover pools. A fundamental review of the legislation on Pfandbriefe was undertaken in 2004, introducing the role of the cover pool administrator who, upon appointment on a proposal of the Federal Financial Supervisory Authority (BaFin) must either (i) seek a sale of the cover pool, or (ii) secure the ongoing existence of the cover pool as a stand alone body for the purpose of properly servicing outstanding Pfandbriefe. For the latter situation, cover pool administrators were given wide-ranging powers to represent the pool and were mandated by law to take any action necessary to ensure the servicing of the – unaltered – Pfandbriefe. The legal entity carrying the cover pool was (and still is) the Pfandbrief bank. Under the draft law, the cover pools will assume the legal nature of a ‘Pfandbrief bank with limited business activities’. In order to fully satisfy Pfandbrief creditors, as set out in the draft law, cover pool administrators shall represent their Pfandbrief bank with limited business activities (i.e. the cover pool) and their powers shall be clarified to enable them to take out loans and, exceptionally, also issue bonds for funding purposes, in particular to offset temporary shortfalls in liquidity. Cover pool administrators may issue these bonds as Pfandbriefe. Similarly, under the draft law, existing banking licences will continue in force with regard to the Pfandbrief banks with limited business activities. According to the explanatory memorandum, the continuation of a Pfandbrief bank is justified as long as the cover pools of the individual Pfandbriefe have the necessary assets, which is assumed to be the case due to the special protective mechanisms of the Law on Pfandbriefe. Only if the solvency of a Pfandbrief bank with limited business activities becomes doubtful will the supervisory authority be empowered to also revoke the licence of the Pfandbrief bank with limited business activities. Finally, the draft law clarifies that the assets of a Pfandbrief bank held with Eurosystem central banks for the purpose of fulfilling the minimum reserve obligations, to the extent the latter are related to Pfandbrief liabilities, do not form part of the insolvent estate but belong to the Pfandbrief bank with limited business activities.

text: 2. General observations

text: 2.1 The ECB welcomes the draft law, as it provides for a procedure for insolvent banks to make appropriate separate settlements of German Pfandbriefe outside the scope of insolvency provisions and enables the cover pool administrator to ensure the complete settlement of outstanding Pfandbriefe. 2.2 The ECB welcomes that the third and fourth sentences of Section 30 (1) of the draft law regulate the continued existence of Pfandbrief banks and their purposes. The ECB notes that the draft law implicitly states that the activities of cover pool administrators, as well as the licence for the cover pool, will expire as soon as the servicing of outstanding Pfandbriefe is completed. However, given the option of issuing new Pfandbriefe, the ECB recommends further clarifying this. 2.3 The ECB stresses that it is entirely within the competence of the Eurosystem to decide what collateral and which counterparties to accept for the purposes of its monetary policy operations and intraday credit and to set criteria for participation in payment and clearing systems. National law cannot determine the eligibility of certain entities as monetary policy counterparties of the Eurosystem or the eligibility of certain assets as collateral within the monetary policy framework of the Eurosystem. The ECB notes that the draft law does not contain any explicit reference indicating that the administrator of an insolvent Pfandbrief bank’s cover pool can obtain liquidity from the Eurosystem. However, the ECB would nevertheless recommend that this point is clarified and would welcome it if the explanatory memorandum were to reaffirm that it is for the Eurosystem alone to decide the eligibility criteria for counterparties and assets.

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

text: Done at Frankfurt am Main, 14 June 2010.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


text: Opinion

text: See Opinion

text: , paragraph 2.1.1, which specifically anticipated the present proposed reform. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

text: OJ L 189, 3.7.1998, p. 42.

text: See the ECB Convergence Report of May 2008, pp. 17-18.

text: Similarly, see, for example, the ECB Convergence Report of May 2008, pp. 229, 236 and 246.

text: Under Article 127(5) of the TFEU, one of the tasks of the ESCB is to contribute to the smooth conduct of policies relating to the prudential supervision of credit institutions and the stability of the financial system. 7 See also paragraph 3.1 of Opinion

text: ; in particular: ‘Although the draft heads provide for an independent governor solely responsible for the ESCB-related tasks, the Governor may not be seen in isolation from the central banking structure’.

text: With one small amendment, however, to Section 21(2) of the CBA 1942, involving the deletion of the words ‘if the other members have passed a unanimous resolution requesting the President to remove the Governor from office’. The effect is that the Government may ask the President to remove the Governor for stated serious misconduct on its own initiative.

text: See Opinions

text: and

text: . See also the comments made at paragraph 3.1 above in relation to central bank independence. 10 See the ECB Convergence Report of May 2008, p. 20. 11 As noted in the 1998 European Monetary Institute Convergence Report, and reiterated in paragraph 8 of Opinion

text: Concerning the prohibition on monetary financing, see paragraph 3.2 below. 13 See paragraph 2.2(b) of Opinion

text: and p. 21 of the ECB Convergence Report of May 2008.

text: Ibid. 15 Ibid and see the ECB Convergence Report of May 2008, p. 20. 16 See the ECB Convergence Report of May 2008, p. 20. 17 See also Section 32H(3) and (4) (discussed in paragraph 3.1.15 below) of the CBA 1942.

text: See e.g., paragraph 3.3 of Opinion

text: , paragraph 2.4 of Opinion

text: , and paragraph 2.4 of Opinion

text: . 21 See paragraph 2.2(b) of Opinion

title: Opinion of the European Central Bank of 17 June 2010 on a draft law relating to the restructuring of the Central Bank and Financial Services Authority of Ireland (CON/2010/48)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 17 June 2010 on a draft law relating to the restructuring of the Central Bank and Financial Services Authority of Ireland (

text: ) Introduction and legal basis

text: On 7 April 2010, the Governing Council of the European Central Bank (ECB) adopted an opinion (hereinafter the ‘draft heads opinion’) on draft heads, relating to a proposed draft law on the restructuring of the Central Bank and Financial Services Authority of Ireland (CBFSAI). The purpose of the draft heads was to provide a framework pursuant to which the draft law would be prepared. The draft heads and the draft law implement a decision of the Irish Government of 16 June 2009 approving the reform of the internal structures of the CBFSAI . On 9 April 2010, the ECB received a request from the Irish Minister for Finance (hereinafter the ‘Minister’) for an opinion relating to the abovementioned draft law, entitled the ‘Central Bank Reform Bill 2010’ (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 (TFEU) and the third indent of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to the CBFSAI. 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 purpose of the draft law is to provide for the reform of the internal structures of the CBFSAI, in particular the Irish financial regulatory structures. The draft law implements this restructuring by way of various amendments to the Irish Central Bank Acts 1942 to 1998 (hereinafter the ‘CBAs’). The ECB welcomes the fact that the draft law follows the form and content of the draft heads

text: 2. General observations

text: Consolidation of Ireland’s CBAs and reform of supervision in Ireland The ECB reaffirms its general observations set out in paragraphs 2.1 and 2.2 of the draft heads opinion, in relation to (a) the consolidation of Ireland’s CBAs; and (b) the reform of supervision in Ireland. In particular, the ECB points out that the current CBAs are not consolidated and that a consolidation is urgently needed.

text: 3. Specific observations

text: 3.1 Central bank independence As stated in the draft heads opinion, the ECB had a number of reservations as regards whether the draft heads ensure full independence for Ireland’s central bank (hereinafter the ‘Bank’) in compliance with (a) the central bank independence principle; and (b) the role of the central bank as part of the European System of Central Banks (ESCB), including the principle that, when it is entrusted with ESCB-related tasks as well as with other tasks, the latter should not interfere with the ESCB’s tasks. More particularly, the ECB stated that the Bank must be a fully independent institution with a precisely defined mandate. As regards ESCB-related tasks and their performance, the Governor, the Bank, the Commission and its individual members must all be independent and must not seek or take instructions from the Government as far as those tasks are concerned . The ECB called for stringent respect of the Bank’s independence in the draft law and for clarification of the roles of the Governor and the Commission. In this regard, the ECB welcomes the fact that the draft law retains Section 19A(2) of the Central Bank Act (CBA) 1942 which provides that the Governor has sole responsibility for the performance of ESCB-related tasks. However, the ECB notes that this provision contradicts other provisions of the draft law whereby the Commission is entrusted with ESCB-related tasks (see details in paragraph 3.1.3 of this opinion). Therefore, the ECB reiterates its comment that the new set-up must clarify the roles of the Commission and the Governor. Furthermore, the ECB welcomes the draft law’s insertion of subsections (1A) and (1B) after subsection (1) of Section 6 of the CBA 1942, which is intended to underline the independence of the Bank, the Governor and the Commission, as required by the TFEU and the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’). While the ECB agrees with the clear intention of these insertions, it remains to be seen whether in practice they will be able to ensure that the Bank and the members of its decisionmaking bodies will be fully independent with a view to their ESCB-related tasks. In any event, the ECB recommends that subsection (1A) should be further strengthened in order to make clear that, where any provision of the CBAs could involve a contradiction of the independence principle, the

text: independence principle is to have supremacy. Any contradictory provision of the CBAs is to be interpreted with due regard to that overriding principle. The ECB welcomes the more substantive nature of subsection (1B) and recommends that it should be further enhanced, along the following lines. According to its current formulation, only the Bank, the Governor and the Commission are protected from being directed or required by any person or authority to act in a manner inconsistent with the TFEU and the Treaty on European Union (TEU) (hereinafter the ‘Treaties’) or the Statute of the ESCB. The ECB recommends that this protection should also extend to any individual member of the Commission, either an ex officio member or a member appointed by the Minister, who may be concerned in the performance of ESCB-related tasks. Subsection (1B) should also specifically provide that no member of the Commission shall seek to influence or give instructions to the Governor in his capacity as the sole member of the Commission responsible for the performance of the Bank’s ESCB-related tasks. In addition, the ECB understands that the provision encompasses instructions from both national and foreign institutions in line with Article 130 of the TFEU and Article 7 of the Statute of the ESCB. For legal certainty reasons, this provision should be brought fully in line with Article 130 of the TFEU and Article 7 of the Statute of the ESCB . In addition, the ECB notes that at the same time the new subsections (3) and (5) of Section 6A of the CBA 1942 indicate that for the Bank’s non-ESCB-related tasks the Commission and the Governor must comply with the requests for a consultation or information of the Minister for Finance. In this context, to ensure that the Bank and members of its decision-making bodies are fully independent in the performance of their ESCB-related tasks , the Governor should have the explicit competence to organise the ESCB-related tasks in such a way that they are performed in an independent manner . On the assumption that the above recommendations are followed, the ECB makes the following additional specific comments regarding the draft law: 3.1.1 The draft law does not affect the current Section 6A(1) of the CBA 1942, which states that the primary objective of the Bank is to maintain price stability. A substituted Section 6A(2) of the CBA 1942 lists the other objectives of the Bank, which were referred to in the draft heads opinion as the ‘secondary objectives’ of the Bank. The ECB stated in the draft heads opinion that the draft law should provide that the Bank’s secondary objectives should be expressed to be without prejudice to its primary objective, as set out in Articles 127(1) and 282(2) of the TFEU and Article 2 of the Statute of the ESCB. Furthermore, the ECB stated that the draft law should provide that the secondary objectives must be consistent and not interfere with the Bank’s obligation pursuant to Section 6A(6) to support the general economic policies of the European Union with a view to contributing to the achievement of the objectives of that Union as laid down in

text: Article 3

text: of

text: the TFEU, which is itself an objective expressed to be without prejudice to the primary objective of maintaining price stability. As these comments do not appear to have been addressed, the ECB restates its remarks in respect of Section 6A(2). In addition, the ECB notes that Section 6A(1) of the CBA 1942 seems to limit the primary objective of the central bank to the context of performance of its ESCB-related tasks. In line with the ECB’s comments in this paragraph, Section 6A(1) of the CBA 1942 should ensure that the objective of price stability is an objective of the Bank in the performance of any of its tasks, ESCB-related or non-ESCB-related. 3.1.2 The substituted Section 6A(2)(e) of the CBA 1942 provides that one of the Bank’s other objectives will be ‘the discharge of such other functions and powers as are conferred on it by law’. The ECB reminded the consulting authority in the draft heads opinion that the Bank’s functions must be performed in a manner that is fully compatible with the Treaties and the Statute of the ESCB. This substituted Section 6A(2)(e) has to be considered together with subsection (10) of the substituted Section 5A, which states that the Bank is required to perform its functions and exercise its powers in a manner consistent with the Treaties and the Statute of the ESCB, For legal certainty reasons, the ECB continues to recommend that the draft law clarifies that the Bank’s objective to discharge ‘such other functions and powers as are conferred on it by law’ is subject to the requirements of the Treaties and the Statute of the ESCB and that practical precautions ensure that they are not compromised. 3.1.3 The substituted Sections 18B(1) and 18B(2) of the CBA 1942 provide that, except as expressly provided otherwise by the CBA 1942, the affairs and activities of the Bank shall be managed and controlled by the Commission. Although Section 19A(2), which provides that the Governor is solely responsible for the performance of ESCB-related tasks, is retained along with subsection (10) of the substituted Section 5A and even on the assumption that the recommendations specified in paragraph 3.1 above are implemented, the ECB is not satisfied that its comments in the draft heads opinion as regards the interaction between (a) the Commission’s management and control of the Bank’s affairs and activities; and (b) the Governor’s sole responsibility for the performance of the Bank’s objectives relating to ESCB-related tasks, have been adequately addressed and, thus, the ECB would like to reiterate these comments as follows. The substituted Section 18B(3) provides that the Commission shall ensure the proper exercise and discharge by the Bank of the powers and functions conferred on it by, inter alia, the substituted Section 5A (General functions and powers of the Bank). This appears to include clearly ESCBrelated tasks such as, for example, in the substituted Section 5A(1)(b), (c), (g) and (h). In this sense, Article 6.1 of the Statute of the ESCB provides that in the field of international cooperation involving tasks entrusted to the Eurosystem, the ECB decides how the ESCB is represented. To the extent that the substituted Section 5A(1)(b) and (c) allow the central bank to participate in international monetary institutions, the draft law should make such participation subject to the ECB’s approval in accordance with Article 6.2 of the Statute of the ESCB. Also, the collection of statistical information, which is provided for in the substituted Section 5A(1)(g) and (h), is related

text: to the performance of ESCB-related tasks and, according to Article 5.1 of the Statute of the ESCB, in order to undertake such tasks, the ECB is assisted by the national central banks (NCBs) in the collection of necessary statistical information. In this regard, the ECB’s powers in this field should be recognised. Therefore, the draft law contains provisions whereby the Commission is responsible for clearly ESCB-related tasks and this is in direct conflict with the requirement for the Governor to be the sole authority with responsibility for such tasks which clearly underscores the observations in paragraph 3.1. 3.1.4 Head 8 of the draft heads stated that ‘subject to certain exceptions, the functions and powers … of the Governor (excluding ESCB functions) … are to be transferred to the Bank’. In its draft heads opinion, the ECB stated that it was unclear which of the Governor’s functions and powers were intended to be transferred to the Bank. The draft law does not appear to have implemented this element of draft head 8 and therefore, assuming that this is not reintroduced, the ECB has no further concerns in this regard. 3.1.5 Subsection (11) of the substituted Section 5A of the CBA 1942 states that the bank shall perform its functions and exercise its powers in a way that is consistent with (a) the orderly and proper functioning of financial markets; and (b) the prudential supervision of providers of financial services. This subsection has to be considered together with subsection (10) of the substituted Section 5A. For legal certainty reasons, the ECB continues to recommend that subsection (11) is clarified with regard to the scope of the functions covered by it, and its reference to ESCB-related tasks. 3.1.6 Head 17 of the draft heads stated that the draft law would provide that the Governor would assign the Heads of Function their responsibilities. According to the new Section 23A inserted in the CBA 1942 by the draft law, it is the Commission which will assign the Heads of Function their responsibilities. The ECB notes that, pursuant to the new Section 32A(1), it is the Governor who will propose a plan of assignment of responsibility for specified powers and functions of the Bank to, inter alia, the Heads of Function. The ECB further notes that, pursuant to the new Section 32A(3), the Heads of Function are accountable to the Governor for the performance of an assigned function (although they may also be accountable to any other person specified for the purpose in the assignment). However, the ECB recommends a clarification regarding the Head of Central Banking with regard to Subsection (4) of Section 23D to ensure that the Minister for Finance cannot use powers under this rule to compromise independence in the performance of ESCBrelated tasks. It would like to point out that, to the extent that the power of the Governor to assign responsibilities under the new Section 32A(1) concerns ESCB-related tasks, the draft law should ensure that the Governor exercises this power independently. 3.1.7 Head 13 of the draft heads stated that certain provisions relating to membership of the Commission were to be the same in the draft law as those that currently apply to the board of the CBSFAI. In its draft heads opinion, the ECB recommended that in the event of any conflict between the conditions

text: applicable to all members of the Commission and those applicable to the Governor, the Governor should be bound by the provisions applying specifically to him or her. In relation to the provisions of the draft law in this regard, the ECB is satisfied that no such conflict arises and it has no further concerns in this regard. 3.1.8 The draft law retains without modification the current Section 19(6) and (7) of the CBA 1942 which provide for the automatic termination of office of the Governor for various reasons including bankruptcy, imprisonment or holding shares in a financial institution. The draft law also retains the current Section 21 of the CBA 1942 . This section allows for the Governor’s removal from office on grounds of permanent incapacity due to ill-health and for one or more specified grounds of serious misconduct. In its draft heads opinion, the ECB stated that, in order to ensure compliance with the conditions for dismissal of a Governor in Article 14.2 of the Statute of the ESCB, Sections 19 and 21 need to reflect the language used in that Article which states that a Governor ‘may be relieved from office only if he no longer fulfils the conditions required for the performance of his duties or if he has been guilty of serious misconduct’. As the draft law does not appear to have addressed these specific recommendations, the ECB would like to restate them. 3.1.9 As regards the Heads of Function, draft head 18 made it clear that the draft law would provide that the current Chief Executive of the Irish Financial Services Regulatory Authority (IFSRA) would be the first Head of Financial Regulation and that his first term would run for the remainder of his contract with the IFSRA. In its draft heads opinion, the ECB recommended that the draft law should have similar clarity as regards the position of Head of Central Banking, as draft head 18(3) simply stated that ‘there should be a transition arrangement for the present Director General of the Bank’. The ECB notes that the draft law does not appear to contain a transitional arrangement for the current Director General of the Bank. The ECB welcomes the clear provision in the draft law whereby the office of Director General of the Bank is replaced by the office of Head of Central Banking, and welcomes the retention of Section 22A of the CBA 1942, whereby the Head of Central Banking will now carry out the Governor’s ESCB-related tasks whenever: (a) the Governor is unable to carry out those responsibilities because of absence, ill-health or any other reason; or (b) the office of Governor is vacant. In this regard, the draft law should expressly provide that the current Director General of the Bank will remain to see out his full term of office. In addition, the ECB restates its reminder to the consulting authority from the draft heads opinion that, in the context of personal independence, the same safeguards for personal independence (minimum term of office, grounds for dismissal, security of tenure, right of judicial review, safeguards against conflicts of interests) provided for the Governor must apply equally to all members of NCB decision-making bodies who are involved in the performance of ESCB-related

text: tasks and in particular to those who may substitute the Governor. The new Section 25 of the CBA 1942 does not seem to reflect this aspect. 3.1.10 Draft head 18 stated that the draft law would provide that the Governor would be able to engage in other remunerative employment with the consent of the Commission. In its draft heads opinion, the ECB stated that the draft law should provide for safeguards against conflicts of interest that could jeopardise the personal independence of the Governor. As stated in the ECB Convergence Report of May 2008, ‘as a matter of principle, membership of a decision-making body involved in the performance of ESCB-related tasks is incompatible with the exercise of other functions that might create a conflict of interest. In particular, members of such decision-making bodies may not hold an office or have an interest that may influence their activities, whether through office in the executive or legislative branches of the state or in regional or local administrations, or through involvement in a business organisation’ . The draft law does not appear to have implemented this element of draft head 18 in respect of the Governor. In this regard, the ECB welcomes the retention of Section 19(6) and (7) of the CBA 1942 which protect against conflicts of interest. However, it recommends that the draft law state more clearly the precise conditions which create a conflict of interest for the Governor. This also applies to all members of the Commission who are involved in the performance of ESCB-related tasks and in particular to those who may substitute the Governor. 3.1.11 The new Section 32B of the CBA 1942 provides that the Bank shall prepare and submit to the Minister at specified intervals a strategic plan specifying the Bank’s objectives, activities, policies, strategies and policies for the relevant period. The ECB notes that, pursuant to the new Section 32B(5), the Minister shall have any such plan laid before the Houses of the Oireachtas (the Irish Parliament). The ECB recommends that the new Section 32B should contain a safeguard for the observance of the Bank’s independence, in respect of the preparation, approval and implementation of any such strategic plan. 3.1.12 The draft law provides in the new Section 32C of the CBA 1942 that the Bank is to prepare an annual estimate of income from levies, subvention from the Bank and any other income and expenditure in relation to financial regulation. This is to be submitted to the Minister not later than two months before the end of each financial year. It is unclear from the draft law whether the Minister’s approval is required, as was explicitly foreseen in draft head 23, although such a requirement for approval may be implicit in the new Section 32C. In its draft heads opinion, the ECB stated that, where third parties and particularly the government are in a position, directly or indirectly, to exercise influence on the determination of the budget of an NCB, the relevant statutory provisions should contain a safeguard clause to ensure that this does not impede the proper performance of the NCB’s ESCB-related tasks . The ECB recommended

text: that the Governor should be granted an explicit right to oppose any funding and budgetary decisions in respect of financial regulation which could cause such impediments. In this regard, the ECB notes and welcomes the drafts law’s inclusion of the strengthened substituted Section 19B in the CBA 1942. This provides for the Governor’s final determination of budgetary or funding issues being considered by the Commission, which in the Governor’s opinion have implications for the independence of the Bank or the Governor’s performance of the functions conferred on the Governor and the Bank by or under the Treaties and the Statute of the ESCB. In order to avoid any possible ambiguity, the ECB recommends that the substituted Section 19B is extended to encompass budgetary and funding issues being considered by the Minister in this regard. In addition, Section 19B should provide that the Commission is obliged to ensure that the Bank has the financial means necessary for carrying out its ESCB-related tasks. In addition, the draft law should make clear that Section 19B should take precedence over the new Section 32C. 3.1.13 The new Section 32F(4) of the CBA 1942 provides that any claims on, or liabilities to, the ECB are to be treated as assets or liabilities of the general fund or any other fund the Minister establishes by order for that purpose. The ECB would welcome clarification as to what is intended by this rule. 3.1.14 The new Section 32G(1) of the CBA 1942 provides that the Bank shall pay its surplus income as and when determined into the Exchequer and may, at any time pending such determination, pay into the Exchequer such sums on account of surplus income as may be agreed between the Minister and the Bank. Also, the new Section 32G(2) provides for the powers of the Minister to make regulations providing for the periodic determination of the Bank’s surplus income and in particular regulations regarding reserves and other financial buffers and regulations providing for any matter arising from the implementation of Chapters VI (financial provisions of the ESCB), VIII (amendment of the Statute and complementary legislation), and IX (transitional provisions and other provisions for the ESCB) of the Statute of the ESCB. The ECB reminds the consulting authority that any transfers of financial resources by an NCB to a Member State’s budget, either in the form of a profit distribution scheme or in any equivalent form, need to comply with the limitations imposed in this respect by the TFEU, in particular with the principle of central bank independence and the prohibition on monetary financing under Articles

text: and

text: thereof . In the absence of precise provisions in an NCB statute of how profits are allocated, the decision on allocation of profits should be taken by the NCB’s decision-making bodies on professional grounds, and should not be subject to the discretion of third parties unless there is an express safeguard clause stating that this is without prejudice to the financial means necessary for carrying out the NCB’s tasks related to the ESCB . Moreover, compliance with the principle of central bank independence under Article 130 of the TFEU includes a requirement to ensure the central bank’s financial independence. To ensure such compliance, the Member States should establish

text: legal frameworks for NCB profit distributions which allow for an arm’s length assessment of the financial needs of the relevant NCB to be appropriately taken into account. Such assessments should be based on the professional judgement of the relevant NCB’s independent decisionmaking body rather than on the financial needs of the State, so that the NCB does not become dependent for its finances on the government, the parliament or any other third party . The principle of central bank independence requires that no third party should be able to exercise direct or indirect influence, over the performance of the NCB’s tasks, or over its ability, both operationally in terms of manpower, and financially in terms of appropriate financial resources, to fulfil its mandate, i.e. to perform its national tasks, to meet its international obligations and to properly cover its administrative and operational expenses . Profits may be distributed to the State budget only after any accumulated losses from previous years have been covered and financial provisions deemed necessary to safeguard the real value of the NCB’s capital and assets have been created. Indeed, it is of the utmost importance to allow a sufficient provision of reserves to allow the NCB to face possible losses without lessening its financial means to implement the monetary policy of the Union. Similarly, the NCB must also be free to independently create financial provisions to safeguard the real value of its capital and assets. Furthermore, Articles 28.1 and 30.4 of the Statute of the ESCB provide for calls on the NCBs to make contributions to the ECB’s capital and to make transfers of foreign reserves. The principle of financial independence requires that compliance with these provisions leaves an NCB’s ability to perform its functions unimpaired . In respect of the new Section 32G(3), the ECB notes that the same safeguards are to apply as do currently, in that the Minister must have regard to the functions imposed and the powers conferred on the Bank by the Treaties and the Statute of the ESCB. As stated in paragraph 3.1.12 above, it appears that the current safeguards do not sufficiently secure the Governor’s final determination of budgetary or funding issues contained in the substituted Section 19B. There may be conflicts between the substituted Section 19B and the new Section 32G, or another provision of the CBAs , which cast a doubt over the Governor’s right of final determination of budgetary or funding issues and could have implications for the Bank’s independence or the performance of ESCB-related tasks. In this respect, the draft law should make clear that Section 19B should take precedence over the new Section 32G. 3.1.15 The draft law provides in a new Section 32H of the CBA 1942 that where it appears to the Commission that the proceeds from levies and fees imposed in respect of financial regulation are likely to be insufficient to enable the Bank to properly perform its regulatory functions, the Bank may provide additional funds to subsidise the shortfall. The new Section 32H(3) and (4) contains

text: the same safeguards as currently apply : (a) the Minister is competent to approve such subsidisation; (b) the Minister must consult the Governor before deciding thereon; the latter may express his opinion thereon, in so far as it could affect (i) the Bank’s performance of its obligations with respect to promoting the State’s financial stability; and (ii) the performance of the Bank’s functions in its capacity as a member of the ESCB; and (c) the Minister must have regard to the functions and powers of the Bank under the Treaties and the Statute of the ESCB when approving such subsidisation. As stated in paragraph 3.1.14 above, it appears that the current safeguards do not sufficiently secure the Governor’s final determination of budgetary or funding issues contained in the substituted Section 19B. The ECB restates its recommendations at paragraph 3.1.14 in this regard. 3.1.16 The draft law provides in the new Section 32I of the CBA 1942 for the Bank’s preparation of annual accounts. Section 32I(3) provides that the form of statement of accounts must be approved by the Minister after consulting the Bank. In its draft heads opinion, the ECB stated that the draft law should reflect the Bank’s obligation to comply with the Eurosystem’s regime for financial reporting of the Bank’s operations pursuant to Article 26 of the Statute of the ESCB. In line with its convergence reports, the ECB also stated that the power of the Comptroller and the Auditor General to audit the Bank’s accounts (provided for in the draft law as the new Section 32I(5) of the CBA 1942) should be expressed to be without prejudice to the audit by the Bank’s external auditors. As the draft law does not appear to have addressed these specific recommendations, the ECB restates its remarks in this regard. 3.2 Monetary financing 3.2.1 According to the draft law, the National Consumer Agency (NCA) will assume the previous role of the Consumer Director of providing information to consumers in relation to financial services. The draft law provides in its Section 6 for arrangements in respect of Bank employees who may be seconded or transferred to the NCA in order to implement the transfer of that function. According to the draft heads, provision was to be made in the draft law for the preservation of the rights of any seconded staff who had contributed to a central bank superannuation scheme up until transfer to the NCA. The ECB repeats its recommendation contained in the draft heads opinion in this respect, namely that in order to ensure full compliance with the prohibition on monetary financing under

text: Article 123

text: TFEU the draft law should clarify that no Bank resources will be applied towards the payment of pensions, or any other remuneration, in respect of Bank staff, once seconded or transferred to the NCA, other than solely in respect of ensuring the rights and entitlements already accrued by those Bank staff up to the time of secondment or transfer. 18 See the current Section 33L of the CBA 1942. 19 The monetary financing prohibition as laid down in

text: Article 123

text: TFEU is further clarified in Council Regulation EC (No) 3603/93 of 13 December 1993 specifying definitions for the application of prohibitions in Article

text: and

text: b(1) of the Treaty [establishing the European Community] [now Articles

text: and

text: TFEU], OJ L 332, 31.12.1993, p. 1, according to which overdraft facilities or any other type of credit facility with the ECB or the NCBs of Member States in favour of Community institutions or bodies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States are prohibited, as is any purchase directly from these public sector entities by the ECB or NCBs of debt instruments.

text: 3.2.2 As set out above at paragraph 3.1.14, the new Section 32G(1) of the CBA 1942 provides that the Bank shall pay its surplus income as and when determined into the Exchequer and may, at any time pending such determination, pay into the Exchequer such sums on account of surplus income as may be agreed between the Minister and the Bank. The ECB reminds the consulting authority that any such transfers of financial resources by an NCB to a Member State’s budget, either in the form of a profit distribution scheme or in any equivalent form, need to comply with the limitations imposed in this respect by the TFEU, in particular with the prohibition on monetary financing under

text: Article 123

text: thereof. More specifically, in order to comply with this prohibition, it is of crucial importance that the distribution of profits does not imply advances on future or provisional profits but is rather the result only of profits that are fully realised, accounted for and audited, which in turn requires due calculation of profits and losses. Otherwise, such distribution of profits may result in advance profit distribution to the State, which would constitute credit to the public sector in breach of the monetary financing prohibition . Thus, in order to ensure that the schedule for distribution of the Bank’s profits to the Exchequer complies with the monetary financing prohibition, in full or through instalments, it may not imply advances on future or provisional profits but only result in annual profit distributions that are fully realised, accounted for and audited, which in turn requires due calculation of profits and losses for the relevant reporting period .

text: Done at Frankfurt am Main, 17 June 2010.

text: [signed]

text: The Vice-President of the ECB

text: Vítor CONSTÂNCIO


text: Även om några krav avseende statistikrapportering inte kan påtvingas uppgiftslämnare med hemvist i en medlemsstat som inte har euron som sin valuta, så stadgar

text: artikel 4 i rådets förordning (EG) nr 2533/98

text: att medlemsstaterna ska "organisera sig själva på statistikområdet och helt och fullt samarbeta med ECBS för att garantera att förpliktelserna i artikel 5 i [ECBS-] stadgan fullgörs".

sprak: sv

title: Europeiska centralbankens yttrande av den 17 juni 2010 om Sveriges Riksbanks rätt att från svenska utgivare samla in uppgifter om deras emitterade värdepapper (CON/2010/49)

text: EUROPEISKA CENTRALBANKENS YTTRANDE av den 17 juni 2010 om Sveriges Riksbanks rätt att från svenska utgivare samla in uppgifter om deras emitterade värdepapper (

text: ) Inledning och rättslig grund

text: Den 10 maj 2010 mottog Europeiska centralbanken (ECB) en begäran från Sveriges riksbank om ett yttrande över ett förslag om ändring av lagen (1988:1385) om Sveriges riksbank (nedan kallat lagförslaget). ECB:s behörighet att avge ett yttrande grundas på artiklarna

text: och

text: i fördraget om Europeiska unionens funktionssätt och artikel 2.1 tredje och fjärde strecksatsen i

text: rådets beslut 98/415/EG av den 29 juni 1998

text: om nationella myndigheters samråd med Europeiska centralbanken rörande förslag till rättsregler , eftersom lagförslaget innehåller bestämmelser som berör Sveriges riksbank samt insamling, sammanställning och distribution av monetär och finansiell statistik samt statistik rörande banker, betalningssystem och betalningsbalanser. I enlighet med

text: artikel 17.5

text: första meningen i arbetsordningen för Europeiska centralbanken har detta yttrande antagits av ECB-rådet.

text: 1. Syftet med lagförslaget

text: Lagförslaget innebär att Sveriges Riksbank ges rätt att från svenska utgivare samla in uppgifter om deras emitterade värdepapper. På så sätt får Riksbanken möjlighet att bättre följa utvecklingen på valuta- och kreditmarknaderna samt övervaka betalningssystemets stabilitet.

text: 2. Bakgrund

text: För närvarande får Sveriges Riksbank, enligt 6 kap. 9 § lagen om Sveriges riksbank, samla in uppgifter om värdepapper som emitterats av sådana emittenter som står under tillsyn av Finansinspektionen. Denna information får användas för att följa utvecklingen på valuta- och kreditmarknaderna samt övervaka betalningssystemets stabilitet. Sveriges riksbank får för närvarande inte samla uppgifter för dessa ändamål från utgivare som inte står under tillsyn av Finansinspektionen.

text: Det har visat sig att förbättrad information om utelöpande värdepapper är viktig vid övervakningen av stabiliteten i det finansiella systemet. För en bättre tillsyn över betalningssystemen behöver Sveriges riksbank information om alla värdepapper som emitterats av svenska utgivare. Genom en fullständig tillgång till sådana uppgifter kan strukturen hos utgivarnas utestående värdepappersskulder analyseras ur ett stabilitetsperspektiv. Lagförslagets ökar Riksbankens möjligheter att följa och analysera värdepappersfinansieringen hos ickefinansiella företag. Genom att samla in denna typ an information ökar också Sveriges möjligheter att delta i arbetet med Europeiska centralbankens värdepappersdatabas (Central Securities DataBase, CSDB) och tillhandahålla data av hög kvalitet om svenska utgivare. Sveriges riksbank bedömer de ytterligare kostnaderna för uppgiftslämnare till följd av den datainsamling som möjliggörs av lagändringen som små, eftersom information om värdepapper som emitterats i Sverige kan erhållas från Euroclear AB. Endast information om värdepapper utgivna i utlandet behöver inhämtas direkt från emittenterna, och dessa består av en begränsad krets stora företag, banker m.fl.

text: 3. Allmänna kommentarer

text: 3.1 Den insamlade informationens omfattning ECB välkomnar den föreslagna ändringen av bestämmelserna om insamling av information om värdepappersemissioner, och uppfattar det som att alla emittenter med hemvist i Sverige omfattas. Bättre information om värdepappersemissioner och inlösen kommer att underlätta arbetet för Sveriges riksbank. 3.2 Hur den insamlade informationen används Lagförslaget kan tolkas som att det begränsar användningen av den insamlade informationen, så att denna endast får användas användas för att följa utvecklingen på valuta- och kreditmarknaderna samt för att övervaka betalningssystemets stabilitet. Det bör tydligt framgå att den information som insamlas om värdepapper utgivna av svenska emittenter får användas även för andra ändamål, bl.a. finansiell stabilitet och statistik. Informationen om värdepapper som samlas in med stöd av lagförslaget skulle också göra det möjligt för Sverige att delta i arbetet med CSDB. ECB föreslår att man i lagförslaget tar med en bestämmelse enligt vilken information som samlas in med stöd av lagen (1988:1385) om Sveriges riksbank får användas för att sammanställa och sprida europeisk statistik inom Europeiska centralbankssystemet (ECBS). Ett sådant svenskt bidrag till CSDB skulle vara ett föredömligt exempel på engagemang från en medlemsstat utanför euroområdet, och skulle vara ett viktigt bidrag till konsistent och korrekt information om värdepapper. 3.3 Överföring av sekretessbelagd information till ECBS-medlemmar Eftersom den information som Sveriges riksbank samlar in kan innehålla sekretessbelagd statistisk information är det nödvändigt att ange att sådan sekretessbelagd information kan komma att överföras inom ECBS.

text: Artikel 8.5 i rådets förordning (EG) nr 2533/98 av den 23 november 1998

text: om Europeiska

text: centralbankens insamling av statistiska uppgifter lyder: "ECB får besluta att, inom ECBS, i den utsträckning och på den detaljnivå som behövs, samla in och överföra konfidentiella uppgifter som ursprungligen samlats in för något annat ändamål än vad som framgår av

text: artikel 5 i stadgan

text: , förutsatt att detta är nödvändigt för att effektivt utveckla eller producera statistik eller för att höja statistikens kvalitet och att statistiken är nödvändig för att utföra ECBS uppgifter enligt fördraget". Ett förtydligande av detta skulle stärka Riksbankens statistikarbete i linje med förordning

text: (EG) nr 2533/98

text: 4. Specifika kommentarer

text: Enligt 6 kap. 9 § andra stycket i lagen (1988:1385) om Sveriges riksbank, ges Sveriges Riksbank rätt att samla in uppgifter om värdepapper som emitterats av svenska emittenter för att följa utvecklingen på valuta- och kreditmarknaderna samt övervaka betalningssystemets stabilitet. Eftersom man i motiveringen till lagförslaget hänvisar till användningen av sådan information om värdepapper för att säkra den finansiella stabiliteten bör man, av tydlighetsskäl, i 6 kap. 9 § första stycket nämna att insamlad information eventuellt kan användas av Sveriges riksbank för att främja den finansiella stabiliteten. Mot bakgrund av de nationella centralbankernas skyldighet att stödja insamlingen av statistiska uppgifter som behövs för att utföra ECBS-uppgifter, såsom framgår av

text: artikel 5.2 i stadgan

text: för Europeiska centralbankssystemet och Europeiska centralbanken, samt den avgörande betydelse som tillförlitlig och korrekt information om värdepapper har, är ECB mycket positiv till att Sveriges riksbank inom detta område bidrar till att säkra den finansiella stabiliteten.

text: Detta yttrande kommer att offentliggöras på ECB:s webbplats.

text: Utfärdat i Frankfurt am Main den 17 juni 2010.

text: [Namnteckning]

text: Jean-Claude TRICHET

text: ECB:s ordförande


text: EGT L 189, 3.7.1998, s. 42. 2 Alla ECB:s yttranden finns på ECB:s webbplats http://www.ecb.europa.eu.

text: Se yttrande

text: . 4 Se ECB:s yttranden

text: punkt 3.1,

text: punkt 2.5.2 och

text: punkt 3.2. 5 Se ECB:s yttranden

text: punkt 2.2,

text: punkt 3.3 samt CON/2009/73punkt 3.2 och

text: punkt 3.6.

title: Europeiska centralbankens yttrande av den 25 juni 2010 om en förlängning av de statliga garantierna till banker m.fl. och en förlängning av de statliga kapitaltillskotten till solventa banker (CON/2010/50)

text: EUROPEISKA CENTRALBANKENS YTTRANDE av den 25 juni 2010 om en förlängning av de statliga garantierna till banker m.fl. och en förlängning av de statliga kapitaltillskotten till solventa banker (

text: ) Inledning och rättslig grund

text: Den 20 maj 2010 mottog Europeiska centralbanken (ECB) en begäran från Finansdepartementet om ett yttrande över ett utkast till förordning om ändring i förordningen (2008:819) om statliga garantier till banker m.fl. (nedan kallat förslaget till förordning om statliga garantier) samt ett förslag till förordning om ändring av förordning (2009:46) om kapitaltillskott till solventa banker m.fl. (nedan kallat förslaget till förordning om kapitaltillskott). ECB:s behörighet att avge ett yttrande grundas på artiklarna

text: och

text: i fördraget om Europeiska unionens funktionssätt och artikel 2.1 sjätte strecksatsen i

text: om nationella myndigheters samråd med Europeiska centralbanken rörande förslag till rättsregler , eftersom förslaget till förordning innehåller regler som gäller finansiella institut och har en påtaglig inverkan på de finansiella institutens och marknadernas stabilitet. I enlighet med

text: artikel 17.5

text: 1. Bakgrund

text: 1.1 Förordning 2008:819 om statliga garantier till banker m.fl. antogs av regeringen den 29 oktober 2008. ECB konsulterades om ett utkast till förordning 2008:819 och antog sitt yttrande

text: den 29 oktober 2008 Därefter har ECB antagit tre yttranden om förslag till ändringar av förordning 2008:819,

text: och

text: . Finansdepartementet föreslår nu vissa ändringar av förordning 2008:819 samt att förordningens giltighet förlängs med sex månader, d.v.s. att garantier får ställas fram till den 31 december 2010. 1.2 Förordning 2009:46 om kapitaltillskott till solventa banker m.fl. trädde i kraft den 17 februari 2009. ECB har antagit två yttranden om förslag till ändringar av förordning 2009:46,

text: och

text: Finansdepartementet förslår nu att giltighetstiden för förordning 2009:46 förlängs till den 17 februari 2011. 1.3 Den 27 maj 2010 antog regeringen ett förslag till förordning om statliga garantier som dock ändrats jämfört med det förslag som ECB ombetts yttra sig över, samt även förslaget till förordning om kapitaltillskott. 1.4 Den 1 juni 2010 mottog ECB en uppdaterad begäran från Finansdepartementet om ett yttrande över förslaget till förordning om statliga garantier som innehöll förordningen i dess senaste ordalydelse.

text: 2. Tidpunkten då ECB ska höras

text: 2.1 ECB påpekar att den samrådande myndigheten, i fall av yttersta brådska där en normal tidsfrist för ECB att avge sitt yttrande inte kan iakttas, i sin anhållan om ett yttrande kan ange skälen till att ärendet brådskar och begära att den tidsfrist inom vilken ECB ska avge sitt yttrande förkortas. Detta påverkar dock inte den samrådande myndighetens skyldighet att i god tid, i enlighet med artiklarna 127.4 och 282.5 i fördraget, konsultera ECB om varje förslag till nationella rättsregler inom ECB:s behörighetsområde. Av

text: artikel 4

text: andra meningen i beslut

text: framgår att ECB ska höras "i ett lämpligt skede" av lagstiftningsprocessen. Detta bör tolkas som att ett samråd bör genomföras i ett skede av lagstiftningsprocessen som ger ECB tillräckligt med tid för att dels granska förslaget till rättsregler och dels anta sitt yttrande på alla nödvändiga språk, samt att den berörda nationella myndigheten även måste ha tillräckligt med tid för att beakta ECB:s yttrande innan de nya reglerna antas. Enligt

text: artikel 3.4 i beslut 98/415/EG

text: är medlemsstaterna även skyldiga att skjuta upp antagningsförfarandet avseende de förslagna rättsreglerna fram till dess att ECB:s avgett sitt yttrande. I det aktuella fallet har den samrådande myndigheten inte angett att ärendet brådskar i sin anhållan om ett yttrande, och heller ej begärt att den tidsfrist inom vilken ECB ska avge sitt yttrande ska förkortas. 2.2 ECB uppmanar Finansdepartementet att i framtiden bättre iaktta sin skyldighet att höra ECB i enlighet med beslut

text: 3. Syftet med förslagen till förordningar

text: I promemorian som bifogats förslaget till förordning skriver Finansdepartementet att statliga garantier för närvarande inte efterfrågas och att bankerna är väl kapitaliserade. Finansdepartementet anser att stödprogrammen av beredskapsskäl behövs ytterligare en tid eftersom de kan ge bankerna tillgång till finansiering på medellång sikt om marknadsförhållandena skulle försämras. Finansdepartementet påpekar även att det är viktigt att stödåtgärderna fasas ut stegvis så att institutens återgång till marknadsfinansiering underlättas.

text: 4. Allmänna kommentarer

text: Förslaget till förordning om statliga garantier innebär att en ny punkt 4 läggs till i artikel 9 i förordning 2008:819 enligt vilken instituten, vid vissa tröskelvärden, åläggs att upprätta en plan för återgång till normal marknadsfinansiering. Förslaget till förordning om statliga garantier innehåller även en ny

text: artikel 12

text: som beskriver hur avgiften enligt 11 och 12 §§ ska beräknas. ECB noterar att de svenska förslagen överensstämmer med EU-kommissionens riktlinjer för förlängning av stödåtgärder efter den 30 juni 2010. ECB upprepar sin ståndpunkt att det är viktigt att giltighetstiden för de nationella stödåtgärderna som vidtas i unionen samordnas så att konkurrens på lika villkor kan säkerställas . ECB understryker också att nationella stödåtgärder bör vara tidsbegränsade .

text: Utfärdat i Frankfurt am Main den 25 juni 2010.

text: [Namnteckning]

text: Jean-Claude Trichet

text: ECB:s ordförande


text: See Guide to consultation of the European Central Bank by national authorities regarding draft legislative provisions, Title IV, Section 1. 3 As also reflected respectively in

text: Article 7

text: and Article 21.1 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’). 4 See, concerning independence, for example paragraph 6 of ECB Opinion CON/99/16, paragraphs 3.2 and 3.3 of ECB Opinion

text: , paragraphs 2.2 and 2.4 of ECB Opinion

text: and further opinions quoted in the footnotes below. See also the ECB’s Convergence Report of December 2006, pp. 27-30; of May 2007, pp. 19-23; and of May 2010, p. 23. As concerns the prohibition on monetary financing, see paragraph 3 of ECB Opinion

text: and paragraph 2.2(b) of ECB Opinion

text: . All ECB opinions are available on the ECB’s website at www.ecb.europa.eu.

text: See paragraph 2.2 of ECB Opinion

text: . 6 See paragraph 4.3 of ECB Opinion

text: . 8 See paragraph 9 of ECB Opinion

text: In this respect, the situation is different from that addressed in ECB Opinion

title: Opinion of the European Central Bank of 1 July 2010 on the remuneration of the staff of Banca Naţională a României (CON/2010/51)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 1 July 2010 on the remuneration of the staff of Banca Naţională a României (

text: ) Introduction and legal basis

text: On 18 June 2010 the ECB received a request from the Romanian Ministry of Public Finances for an opinion on a law on certain measures necessary for the restoration of budgetary balance (hereinafter the ‘law’). This law was adopted on 30 May 2010 by the Romanian Government. The ECB had not been consulted and, on 9 June 2010, the ECB sent a letter to the Romanian Government, drawing attention to the obligation to consult it. 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 of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the law relates to Banca Naţională a României (BNR). 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 law

text: The law, among various decreases of the salaries of different categories of public employees, provides for a decrease of 25% of the salaries of the staff of BNR, and for the transfer to the State budget of the amounts representing this decrease. The law indicates that the salary decreases set out in the law will apply until 31 December 2010. Starting on 1 January 2011, social and personnel policies will be applied which should ensure the observance of both the public expenditure level set through the measures adopted in 2010 for the decrease of public expenditure and the provisions of the 2011 State budget and State social insurance budget.

text: 2. General observations

text: The ECB received the consultation request after the adoption of the law and before the delivery of a decision of the Romanian Constitutional Court regarding its constitutionality. In view of the late stage in

text: the legislative process at which the ECB was consulted, it would like to point out that, in cases of particular urgency which do not allow for a normal consultation period, the consulting authority may indicate such urgency in the consultation request and ask for a shorter deadline for adoption of the ECB’s opinion. This does not prejudice the national authorities’ duty under Article 127(4) of the Treaty to appropriately consult the ECB on national draft legislative provisions falling within its fields of competence. It follows from

text: Article 3(4) of Decision 98/415/EC

text: that Member States are obliged to suspend the process of adoption of the draft legislative provision pending receipt of the ECB’s opinion. It is necessary that the adopting national authority should have the opportunity meaningfully to deliberate the ECB’s opinion prior to taking its decision on the substance. If a time limit has been set for submission of the ECB opinion and this time limit has expired, the national authority concerned may restart the adoption process . As regards future amendments or implementing measures to the law, it is expected that the obligation to consult the ECB is respected. This is particularly important considering that Article 17(2) of the law seems to indicate the possibility of further legislative measures affecting the staff of BNR. In this regard, it is recommended that internal administrative procedures should be in place to ensure that timely consultation of the ECB is foreseen whenever such consultation is mandatory.

text: 3. Specific observations

text: As is the case for certain other categories of public employees, the law provides for a decrease of the salaries of the staff of BNR, although the Romanian state is not the formal employer of the BNR staff. According to the Statute of BNR, the salaries of BNR staff are paid from the central bank’s own resources. In addition, Article 3(2) of the law provides for the direct transfer to the State budget of the amounts representing the decrease. In this context and independently of the need for emergency measures, the ECB would like to recall that any operation between a national central bank (NCB) and the national authorities of an EU Member State has to comply with the limitations imposed in this respect by the Treaty, and in particular with the principle of central bank independence in

text: Article 130

text: and the prohibition on monetary financing in

text: Article 123

text: . Previous ECB opinions have clarified the implications of these Treaty-based requirements , which can be summarised as follows. 3.1 Compliance with the central bank independence principle 3.1.1 The principle of central bank independence requires that no third party should be able to exercise direct or indirect influence over the NCB. This includes, as recalled in the ECB convergence reports and stressed in various ECB opinions, the point that Member States may not impair an

text: 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 . Also, an NCB may not be put into a position where it has limited or no control over its staff, or where the government of a Member State can influence its policy on staff matters. 3.1.2 The Law on the Statute of Banca Naţională a României (hereinafter the ‘Law on the Statute of BNR’) clearly provides for the Management Board of BNR to decide on the internal organisation and the salaries of the members of BNR staff. In order to protect BNR’s autonomy in staff matters, which is a particular aspect of central bank independence under Article 130 of the Treaty, the Romanian authorities are under an obligation to ensure that any amendment to the legislative provisions relating to the determination of the remuneration of the employees of BNR is decided in cooperation with BNR, taking due account of the views of BNR . 3.2 Compliance with the monetary financing prohibition 3.2.1 The provisions on central bank salary decreases must also comply with the monetary financing prohibition laid down in Article 123 of the Treaty, as further clarified in

text: Council Regulation (EC) No 3603/93 of 13 December 1993

text: specifying the definitions for the application of the prohibitions referred to in

text: Articles 104

text: [now 123] and 104b(1) [now 125(1)] of the Treaty . The provision prohibits overdraft facilities or any other type of credit facility with the ECB or NCBs in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States, and the purchase directly from these public sector entities by the ECB or NCBs of debt instruments. With a view to preserving the integrity of the central bank’s balance sheet, the monetary financing prohibition is of key importance in ensuring the primary monetary policy objective of price stability, which must not be impeded. Therefore, the prohibition must be interpreted extensively to ensure its strict application. Even if Article 123(1) of the Treaty refers literally to ‘credit facilities’, i.e. with the obligation to repay such credit, this prohibition also applies a fortiori to other forms of funding, i.e. without the obligation to repay, since it has the overall aim of public finance discipline and of prohibiting NCBs from financing the public sector. This implies that both the ultimate objective and the spirit of this provision must be taken into account in its interpretation . 3.2.2 From an accounting perspective, a decrease of staff salaries will de facto decrease the operational costs of the BNR, hence increasing potentially its financial resources. However, if the related increase of BNR’s financial resources is directly transferred to the State, such a situation would effectively mean increasing the funding of the Romanian State at the expense of the BNR. In this respect, any direct financial transfer of this nature from the BNR to the State budget can be assimilated to monetary financing which is clearly prohibited under Article 123 of the Treaty.

text: Therefore, in order to avoid a breach of the monetary financing prohibition the law should be amended to ensure full compliance with the Treaty provisions . This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 1 July 2010. [signed]

text: The Vice-President of the ECB

text: Vítor CONSTÂNCIO


text: KOM(2010) 240 slutlig.

text: KOM(2010) 341 slutlig.

title: Europeiska centralbankens yttrande av den 5 juli 2010 om ett förslag till rådets förordning om ändring av förordning (EG) nr 974/98 när det gäller införandet av euron i Estland och ett förslag till rådets förordning om ändring av förordning (EG) nr 2866/98 vad gäller omräkningskursen till euron för Estland (CON/2010/52)

text: Inledning och rättslig grund

text: Den 26 maj 2010 mottog Europeiska centralbanken (ECB) en begäran från Europeiska unionens råd om ett yttrande över ett förslag till rådets förordning om ändring av förordning

text: (EG) nr 974/98

text: vad gäller införandet av euron i Estland. Den 30 juni 2010 mottog ECB en begäran från Europeiska unionens råd om ett yttrande över ett förslag till rådets förordning om ändring av förordning

text: (EG) nr 2866/98

text: vad gäller omräkningskursen till euron för Estland.

text: ECB:s behörighet att avge ett yttrande grundar sig på

text: artikel 140.3 i fördraget om Europeiska unionens funktionssätt

text: . I enlighet med

text: artikel 17.5

text: första meningen i arbetsordningen för Europeiska centralbanken har detta yttrande antagits av ECB-rådet.

text: Kommentarer

text: 1. De föreslagna förordningarna kommer, efter upphävandet av Estlands undantag i enlighet med förfarandet i artikel 140.2 i fördraget, att möjliggöra införandet av euron som Estlands valuta.

text: 2. ECB välkomnar de förslagna förordningarna.

text: Utfärdat i Frankfurt am Main den 5 juli 2010.

text: Jean-Claude Trichet

text: ECB:s ordförande


text: OJ L 189, 3.7.1998, p. 42.

text: Sales where the seller of the securities is not the owner of a corresponding number or amount of the same type of the securities sold or does not have an unconditionally enforceable right under the law of obligations or under a fiduciary entitlement to receive a corresponding number or amount of securities of the same type.

text: The Declaration is available on the French Presidency’s website at www.ue2008.fr.

title: Opinion of the European Central Bank of 8 July 2010 on restrictions on short selling (CON/2010/53)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 8 July 2010 on restrictions on short selling (

text: ) Introduction and legal basis

text: On 17 June 2010 the European Central Bank (ECB) received a request from the German Federal Ministry of Finance for an opinion on a draft law on the prevention of improper transactions in securities and derivatives (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 sixth indent of

text: Article 2(1) of 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 , as the draft law relates 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 law

text: 1.1 The draft law aims at counteracting recent negative market developments such as the spreading of turbulence to the markets for government bonds issued by euro area Member States. It seeks to introduce a legal ban on certain financial transactions and an improvement of transparency. According to the explanatory memorandum to the draft law, the financial crisis revealed the need for further substantial improvements in supervisory law. Therefore, the German national legislator intends to further stabilise financial markets, alongside international efforts, by creating an explicit legal basis for the prohibition of certain transactions that could potentially exacerbate the crisis. 1.2 The draft law proposes principally three sets of amendments to the existing law. First, naked short sales of shares and debt securities of euro area Member States authorised on a domestic stock market to trade in the regulated market are to be banned ex lege. Thus, risks resulting in strong downward pressure on stock market prices that could arise from such transactions, as well as from the possibility of selling more securities than available on the market, will be reduced significantly.

text: Second, the legislator provides for a two-level transparency system for net short positions, including covered short positions in shares and commercially corresponding positions in other financial instruments. The third amendment is aimed at inhibiting ex lege the conclusion of certain naked credit default protection instruments – such as ‘credit default swaps’ (CDSs) – in relation to the liabilities of Member States whose currency is the euro. As CDSs not purchased for hedging are particularly capable of intensifying negative market trends and creating excessive upward pressure on CDS premiums in the market, they are to be prohibited by law. 1.3 In addition, the Federal Financial Supervisory Authority’s (BaFin) generic power to take measures against material shortcomings will be further specified to include the possibility of a ban on further types of transactions on a case-by-case basis, in particular on transactions in currency derivatives based on the euro and on transactions in derivatives that reflect short sales. Moreover, on the same grounds, the Ministry will be empowered to adopt regulations imposing permanent prohibitions on certain types of transactions.

text: 2. General observations

text: 2.1 In general, the ECB considers timely and welcome legislation requiring an appropriate level of transparency for certain types of transactions, such as those relating to CDSs for sovereign debt. The ECB supports in particular the enhancement of requirements for the disclosure to supervisory authorities of net short positions held by financial institutions in certain financial instruments. 2.2 The ECB notes that there are currently no harmonised rules banning short selling, concerning transparency in relation to short selling, or banning naked credit derivatives at Union level. However, the Commission has announced a legislative proposal to regulate short selling, to be adopted in September 2010, and launched a public consultation for this purpose. In this context, the ECB notes that given the integrated nature of the single market, regulatory initiatives aimed at safeguarding the efficiency of financial markets and promoting their orderly functioning can be fully effective only if coordinated. This is the underlying reason that inspired the adoption of the ‘Declaration on a concerted European action plan of the euro area countries’ issued by the Heads of State of the euro area on 12 October 2008 (hereinafter the ‘Declaration’) . In this spirit, the ECB has highlighted in its opinions that close coordination at Union level of government measures intended to alleviate tensions in the financial markets is of crucial importance. 2.3 As regards the proposed ban on naked short selling, the ECB notes that although naked short selling practices may fulfil important economic functions, these market practices may also have potentially negative impacts from a financial stability perspective. A cautious approach underpinned by sound analysis is therefore needed in this regard. In this context, the ECB/Eurosystem supports the work started by the Commission aimed at identifying the main features of a Union legislative proposal concerning short selling and will contribute to the public

text: consultation launched by the Commission. The ECB therefore draws the consulting authority’s attention to the need to take into account possible developments that will emerge at European level. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 8 July 2010. [signed]

text: The President of the ECB

text: Jean-Claude TRICHET