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

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

text: Wet op het financieel toezicht

text: Directive

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

text: and repealing Directives

text: and

text: (OJ L 176, 27.6.2013, p. 338). The European Court of Justice has since then further interpreted the meaning of the term ‘confidential information’ in its judgment of 19 June 2018, Baumeister

text: , ECLI:EU:C:2018:464.

text: See paragraph 2.1 of Opinion

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

text: Decision of the European Central Bank of 4 March 2004 on public access to European Central Bank documents (ECB/2004/3) (OJ L 80, 18.3.2004, p. 42). 8 See Article 5 of Decision (ECB/2004/3). 9 Decision

text: (EU) 2015/811

text: of the European Central Bank of 27 March 2015 on public access to European Central Bank documents in the possession of the national competent authorities (ECB/2015/16) (OJ L 128, 23.5.2015, p. 27). 10 See Decision

text: (EU) 2015/16

title: Opinion of the European Central Bank of 4 September 2019 on freedom of information (CON/2019/31)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 4 September 2019 on freedom of information (

text: ) Introduction and legal basis

text: On 5 July 2019 the European Central Bank (ECB) received a request from the Dutch Minister for the Interior and Kingdom Relations for an opinion on a draft law on open government (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

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

text: , as the draft law relates to De Nederlandsche Bank (DNB) and the tasks concerning the prudential supervision of credit institutions conferred upon the ECB pursuant to Article 127(6) of the Treaty. 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 ensuring a transparent and publicly accountable government. To achieve this, public bodies must publish certain information on their own initiative. Any member of the public may request certain information to be made public. In addition, public bodies must take certain measures to improve their digital information management systems to make them more accessible. DNB is deemed to be a public body under the draft law. 1.2 The draft law exempts certain information from the requirement to publish or to provide access to members of the public (hereinafter the ‘exempt records’). The exempt records that might be relevant from the perspective of DNB include records relating to international relations, the financial and economic interests of the State or public bodies, investigative functions of public bodies, privacy related data and deliberations of public bodies. Many of these records would only be partially exempt as information can only be withheld subject to an overall assessment that the disclosure would not be in the public interest. 1.3 Lastly, the draft law does not supersede specific, existing legal provisions dealing with confidentiality. The annex to the draft law lists the relevant legal provisions dealing with confidentiality which prevail over provisions of the draft law. The annex refers, inter alia, to

text: Article 1

text: :42 and paragraph 1.5.1 of the Law on financial supervision and Article 20 of the Law of 1998 on

text: banking .

text: Article 1

text: :42 and paragraph 1.5.1 of the Law on financial supervision prohibit the use or disclosure of confidential information obtained under that Law for purposes other than those described in the Law. Exemptions to that restriction are listed in those same provisions. The term ‘confidential information’ is not defined in the Law on financial supervision itself, but the explanatory note to that Law states that this term has the same meaning as in Directive

text: of the European Parliament and of the Council (CRD IV) . Article 20 of the Law on banking, as amended by the draft law, provides that to the extent that this Law provides for the performance of the acts aiming to achieve the objectives and tasks referred to in

text: Article 2(1)

text: , (2) and (3) and Article 3 of this Law, which cover generally the objectives and tasks of DNB within the framework of the European System of Central Banks (ESCB), those who perform any task by virtue of the application of this Law or decrees based on it must refrain from using or disclosing data or information received in the performance of that task in any way that goes beyond or is other than what is required for the performance of their task or required by this Law.

text: 2. General observations

text: 2.1 The ECB generally welcomes the draft law, which is aimed at enhancing the legitimacy and accountability of, amongst others, DNB by providing for access to certain information . 2.2 The ECB also welcomes that certain records kept by DNB are exempt, including all confidential information that DNB holds in its capacity both as a national central bank (NCB) within the ESCB and as a national competent authority (NCA) within the framework of the Single Supervisory Mechanism for the prudential supervision of credit institutions. This approach aims to protect certain public and private interests. The categories of exempt records are intended to ensure a balance between the right of access for the general public to DNB’s records and the need for the confidentiality of certain DNB records . In this respect, the provisions of the draft law establish a regime that is compatible with the Union legal framework on transparency, without contravening professional secrecy obligations under Union law. It is recommended however, in view of the desirable balance between transparency and professional secrecy, to have an explicit provision in the Law on banking providing for the primacy of professional secrecy in certain cases.

text: 3. Specific observations

text: ECB public access regime

text: 3.1 Article 37 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’) establishes rules on professional secrecy for the ESCB and ECB. In addition, the ECB has established a public access regime. Due to the primacy

text: of Union law, those provisions prevail over any provisions on professional secrecy or public access adopted at the level of the Member States. In particular, Article 5 of Decision ECB/2004/3 of the European Central Bank provides that documents that are in the possession of an NCB and have been drawn up by the ECB as well as documents originating from the European Monetary Institute or the Committee of Governors may be disclosed by the NCB only subject to prior consultation of the ECB concerning the scope of access, unless it is clear that the document will or will not be disclosed. Alternatively, the NCB may refer the request to the ECB . Furthermore,

text: Article 2 of Decision (EU) 2015/811

text: of the European Central Bank (ECB/2015/16) provides that where an NCA receives a request for an ECB document in its possession, the NCA shall consult the ECB on the scope of access to be granted, prior to taking a decision on disclosure, unless it is clear that the document will or will not be disclosed . Against this background, the ECB suggests to ensure the explicit compatibility of the draft law with Article 37 of the Statute of the ESCB and the public access regime of the ECB . In this respect it could be usefully clarified in the text of the draft law that any obligation to provide information is without prejudice to professional secrecy obligations under the Statute of the ESCB and the public access regime of the ECB.

text: Legal certainty

text: 3.2 The draft law does not contain any transitional arrangement, meaning that the draft law has retroactive effect. DNB may therefore be faced with public access requests which require DNB to provide information that DNB received long before the draft law enters into force. Such information may include information that was provided to DNB specifically relying on the general exemption for public access which DNB has under the current regime (and not under the draft law). The obligation under the draft law to provide such information to the general public could undermine the principle of legal certainty and the justified confidence of, for instance, market participants, which may have provided that information to DNB relying on the information remaining confidential. For the sake of legal certainty it could be usefully clarified that the draft law would only relate to information that DNB obtains after the draft law comes into force and effect.

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

text: Done at Frankfurt am Main, 4 September 2019.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


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

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

text: As referred to in

text: Article 1

text: :1 of the Dutch Financial Supervision Act.

text: Council Regulation (EU) No 1024/2013 of 15 October 2013

text: conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63).

text: Directive

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

text: and repealing Directives

text: and

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

text: See also paragraph 2.1 of Opinion

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

text: See paragraph 2.2 of Opinions

text: and

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 5 September 2019 on the rules to be followed by financial undertakings when defining remuneration policies (CON/2019/32)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 5 September 2019 on the rules to be followed by financial undertakings when defining remuneration policies (

text: ) Introduction and legal basis

type: rubrik

text: On 11 July 2019 the European Central Bank (ECB) received a request from the Minister for Finance of the Netherlands for an opinion on a draft Law on remuneration measures for the financial sector (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: , as the draft law relates to the ECB’s tasks concerning the prudential supervision of credit institutions pursuant to Article 127(6) of the Treaty. 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 mainly encompasses two elements related to the remuneration of staff of financial undertakings , including credit institutions. The first element is an obligation for financial undertakings to take greater account of the relationship between the remuneration paid and the undertaking’s function in the financial sector and its position in society. The second element is a mandatory retention period of at least five years for shares and other similar financial instruments that are part of the fixed remuneration of the board of directors and employees of a financial undertaking. The explanatory memorandum accompanying the draft law notes that the Netherlands currently has the strictest laws and regulations governing remuneration in the financial sector in Europe. 1.2 The first element is intended to ensure that a supervisory board or any other body in charge of determining remuneration takes greater account of the position of the undertaking in society prior to the realisation of the remuneration proposals and remuneration policies. The supervisory board shall account for this afterwards in the management report. This obligation should also reflect how the supervisory board or other similar body has considered the interests of all stakeholders, including employees and shareholders, in the creation of the remuneration proposals and remuneration policies.

text: 1.3 Regarding the second element, the explanatory memorandum accompanying the draft law explains that shares and similar financial instruments could act as an incentive for short term gain related to stock prices. The mandatory retention period should promote a long term profit or growth perspective.

text: 2. Observations

text: 2.1 Within the framework of the single supervisory mechanism (SSM) established by

text: Council Regulation (EU) No 1024/2013

text: , the ECB is exclusively competent to carry out, for prudential supervisory purposes, specific tasks in relation to all credit institutions established in the participating Member States. One of these tasks is to ensure compliance with requirements imposed on credit institutions to have in place robust governance arrangements, including remuneration policies and practices, as set out in relevant Union law . For the purpose of carrying out the tasks conferred on it by

text: Regulation (EU) No 1024/2013

text: , and with the objective of ensuring high standards of supervision, the ECB applies all relevant Union law, and where this is composed of directives, the national legislation transposing those directives . In this respect, when carrying out its prudential supervision tasks, the ECB is the competent authority within the meaning of Directive

text: of the European Parliament and of the Council .

text: Article 92(2) of Directive 2013/36/EU

text: provides that competent authorities must ensure that, when establishing and applying the total remuneration policies for categories of staff, credit institutions comply with the principles set out in points (a) to (g) of that paragraph in a manner and to the extent that is appropriate to their size, internal organisation and the nature, scope and complexity of their activities . 2.2 The obligation to take greater account of how remuneration relates to the position of the undertaking in society and the mandatory retention period do not conflict with the provisions of Directive

text: or affect the ECB’s competence as the competent authority responsible for ensuring compliance with the abovementioned requirement for credit institutions to have in place robust governance arrangements, including remuneration policies and practices. As also noted in the explanatory memorandum accompanying the draft law, the competent authority has no duty to supervise the relationship between individual institutions’ remuneration policies and position in society on its substance or merit, but must ensure that these remuneration policies include such an analysis and that this is accounted for in the management report afterwards. As previously noted by the ECB, banking legislation adopted by the Member States after the establishment of the SSM should facilitate the exercise by the ECB of its responsibilities within the SSM, including its capacity to enhance consistency of supervision across the euro area. As a result, Member States should

text: refrain from setting obstacles both to uniform supervisory practice and to the exercise of supervisory discretion by the ECB within the SSM . This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 5 September 2019. [signed]

text: The President of the ECB

text: Mario DRAGHI

type: vagledning

utgivare: ecb


text: Projet de loi portant mise en oeuvre du règlement (CE) N° 44/2009 du Conseil du 18 décembre 2008 modifiant le règlement CE N° 1338/2001 du Conseil du 28 juin 2001 définissant des mesures nécessaires à la protection de l'euro contre le faux monnayage et du règlement (UE) N° 1210/2010 du Parlement européen et du Conseil du 15 décembre 2010 concernant l'authentification des pièces en euros et le traitement des pièces en euro impropres à la circulation, et portant modification : 1. du Code pénal ; 2. de la loi modifiée du 20 avril 1977 relative à l'exploitation des jeux de hasard et des paris relatifs aux épreuves sportives ; 3. de la loi modifiée du 5 avril 1993 relative au secteur financier ; 4. de la loi modifiée du 23 décembre 1998 relative au statut monétaire et à la Banque centrale du Luxembourg ; 5. de la loi modifiée du 12 novembre 2002 relative aux activités privées de gardiennage et de surveillance ; 6. de la loi modifiée du 10 novembre 2009 relative aux services de paiement.

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

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

text: Notably, with: (i)

text: Council Regulation (EC) No 44/2009

text: ; of 18 December 2008 amending

text: Regulation (EC) No 1338/2001

text: laying down measures necessary for the protection of the euro against counterfeiting (OJ L 17, 22.1.2009, p. 1); (ii)

text: Regulation (EU) No 1210/2010

text: of the European Parliament and of the Council of 15 December 2010 concerning authentication of euro coins and handling of euro coins unfit for circulation (OJ L 339, 22.12.2010, p. 1); and (iii) Decision ECB/2010/14 of the European Central Bank of 16 September 2010 on the authenticity and fitness checking and recirculation of euro banknotes (OJ L 267, 9.10.2010, p. 1).

text: Loi du 13 janvier 2002 portant 1. approbation de la Convention internationale pour la répression du faux-monnayage ainsi que du Protocole y relatif, signés à Genève en date du 20 avril 1929; 2. modification de certaines dispositions du code pénal et du code d’instruction criminelle. 5 Règlement grand-ducal du 12 juillet 2002 portant désignation des autorités visées à l’

text: article 8

text: de la loi du 13 janvier 2002 portant 1. approbation de la Convention internationale pour la répression du faux-monnayage ainsi que du Protocole y relatif, signés à Genève en date du 20 avril 1929; 2. modification de certaines dispositions du code pénal et du code d’instruction criminelle. 6

text: Council Regulation (EC) No 1338/2001 of 28 June 2001

text: laying down measures necessary for the protection of the euro against counterfeiting (OJ L 181, 4.7.2001, p. 6). 7

text: Regulation (EU) No 1210/2010

text: of the European Parliament and of the Council of 15 December 2010 concerning authentication of euro coins and handling of euro coins unfit for circulation (OJ L 339, 22.12.2010, p. 1).

text: Decision ECB/2010/14 of the European Central Bank of 16 September 2010 on the authenticity and fitness checking and recirculation of euro banknotes (OJ L 267, 9.10.2010, p. 1). 9 Article 4.5 of the draft law introducing Article 20-1 of the Law of 23 December 1998 concerning the monetary status and the Banque centrale du Luxembourg. 10 Article 4.3 of the draft law amending Article 18 of the Law on the BCL. 11 Article 4.2 of the draft law amending Article 17 of the Law on the BCL. 12 See paragraph 2.1 of Opinion

text: and paragraph 2.1 of Opinion

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 13 See in this respect, paragraphs 1, 4.1 to 4.5 of Opinion

text: . 14 See paragraph 4.3 of Opinion

text: See Opinion

text: . 16 See the Grand-Ducal Regulation of 12 July 2002. See also Opinion

text: . 17 See paragraph 2 of Opinion

text: , paragraph 2.1 of Opinion

text: and paragraph 3.2.2 of Opinion

text: . 18 See current Article 18 of the Law on the BCL and paragraph 2.1 of Opinion

text: . 19 The precise scope of application of the monetary financing prohibition is further clarified by

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 (OJ 332, 31.12.1993, p. 1–3). 20 See the draft amended Article 18(3) of the Law of 23 December 1998 concerning the monetary status and the Banque centrale du Luxembourg.

text: See paragraph 2.2 of Opinion

text: , paragraph 3.2.2 of Opinion

text: , and paragraph 2.2 of Opinion

text: . 22 See paragraph 3.2.3 of Opinion

text: and paragraph 2.3 of Opinion

text: . 23 See paragraph 1.1 of Opinion

text: , paragraph 2.4 of Opinion

text: , paragraph 2 of Opinion

text: , paragraph 2.4 of Opinion

text: and paragraph 2.4 of Opinion

text: . 24 See paragraph 4.2 Opinion

text: and recital 6 of Decision ECB/2010/14 entitling the ECB to take appropriate administrative measures.

title: Opinion of the European Central Bank of 23 September 2019 on the protection of the euro against counterfeiting and on the authentication of euro coins (CON/2019/33)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 23 September 2019 on the protection of the euro against counterfeiting and on the authentication of euro coins (

text: ) Introduction and legal basis

text: On 8 August 2019 the European Central Bank (ECB) received a request from the Luxembourg Minister of Finance for an opinion on a draft law on the implementation of

text: Council Regulation (EC) No 44/2009 of 18 December 2008

text: amending

text: laying down measures necessary for the protection of the euro against counterfeiting and of

text: Regulation (EU) No 1210/2010

text: of the European Parliament and of the Council of 15 December 2010 concerning authentication of euro coins and handling of euro coins unfit for circulation and amending various laws, including the Law of 23 December 1998 on the monetary status and the Banque centrale du Luxembourg (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 first, second and third indents of

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

text: , as the draft law relates to currency matters, means of payment and the Banque centrale du Luxembourg (BCL). 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 aligning the Luxembourg legal framework on the protection of the euro against counterfeiting with the relevant Union legislation in this area . The Luxembourg legal framework consists of: (i) the Law of 13 January 2002 on 1. the approval of the International Convention for the Suppression of Counterfeiting Currency and the Protocol thereto, signed at

text: Geneva on 20 April 1929; 2. the amendment of certain provisions of the Criminal Code and the Code of Criminal Procedure ; and (ii) the Grand-Ducal Regulation of 12 July 2002 on the designation of the authorities referred to in Article 8 of the Law of 13 January 2002 on the approval of the International Convention for the Suppression of Counterfeiting Currency and the Protocol thereto, signed at Geneva on 20 April 1929 . 1.2 The draft law amends five national laws in order to introduce criminal law sanctions for relevant institutions, as well as their managers and responsible staff, who fail to comply with their obligations as set out in

text: Article 6 of Council Regulation (EC) No 1338/2001

text: . Under that Article, relevant institutions are obliged to: (i) ensure that euro banknotes and coins which they have received and which they intend to put back into circulation are checked for authenticity and that counterfeits are detected; (ii) withdraw from circulation all euro banknotes and coins received by them which they know or have sufficient reason to believe to be counterfeit; and (iii) immediately hand over such euro banknotes and coins to the competent authorities. The relevant institutions are the addressees of

text: Article 6(1) of Regulation (EC) No 1338/2001

text: , which are further specified under the draft law as: (i) merchants engaged in the processing and distribution to the public of money via automated bank machines or automated dispensers; (ii) casinos and similar institutions engaged in the processing and distribution to the public of money via automated teller machines or (cash dispensers); (iii) credit institutions, and, within the limits of their payment activity, other professionals of the financial sector; (iv) companies performing private security and surveillance activities; and (v) payment institutions, within the limits of their payment activity. The foreseen criminal law sanctions consist of fines between EUR 1,250 and EUR 125,000. 1.3 The draft law also complements the BCL’s tasks in respect of euro banknotes and coins, in addition to those laid down in the Law of 23 December 1998 on the monetary status and the Banque centrale du Luxembourg (hereinafter the ‘Law on the BCL’). Firstly, the draft law formally designates the BCL as the competent authority for ensuring compliance with

text: Council Regulation (EC) No 1338/2001

text: Regulation (EU) No 1210/2010

text: of the European Parliament and of the Council and their implementing measures. Secondly, the draft law enhances the powers and instruments available to the BCL under the Law on the BCL to ensure compliance with the Union legal framework applicable to banknotes and coins recycling activities. In particular, the draft law grants investigatory powers to the BCL, namely the powers to: conduct investigations; to test machinery; to take samples of euro banknotes and coins processed; to examine the procedures concerning the use and control of equipment used to process notes and coins; to obtain copies of any documents, files and recordings; to access any computer system; and to verify the relevant

text: institutions’ ability to authenticate euro banknotes and coins. The draft law also grants the BCL the power to impose injunctions and financial penalties on the relevant institutions for breaches of the provisions of

text: Council Regulation (EC) No 1338/2001

text: Regulation (EU) No 1210/2010

text: and Decision ECB/2010/14 of the European Central Bank . Furthermore, the draft law foresees that the BCL shall establish, by means of a regulation, the terms and conditions of the above-mentioned checks. The relevant institutions are required to notify the BCL of the installation of equipment of any type for the purposes of processing euro banknotes or coins. The relevant institutions must also submit to the BCL all data and statistics required by virtue of Union, ECB and BCL legislation with regard to the recycling of currency in the form of euro banknotes and coins . The BCL is also entitled to impose a financial penalty for breaches of these reporting requirements by the relevant institutions. 1.4 The draft law amends the Law on the BCL regarding the remuneration of the BCL for the abovementioned tasks relating to coins. To this end, and while reiterating the principle of remuneration and reimbursement for all tasks related to coins on the basis of an agreement between the BCL and the Treasury, the draft law abolishes the existing specification that such remuneration shall be made on the basis of the monetary income resulting from the volume of coins put in circulation . 1.5 Finally, the draft law includes decisions among the types of legal acts of the ECB that the BCL shall comply with when issuing banknotes .

text: 2. General observations

text: 2.1 The ECB welcomes the draft law which will ensure the preservation of euro banknotes and coins in circulation, resulting in continued public confidence in euro banknotes . 2.2 The ECB welcomes the introduction under the draft law of a comprehensive set of powers and instruments at the disposal of the BCL in this area. In particular, the ECB takes positive note that the draft law will enable compliance in Luxembourg with Decision ECB/2010/14. The draft law complements the existing regulatory power conferred on the BCL in 2008 with the necessary investigatory powers and with the power to issue injunctions and impose penalty payments . The draft law also strengthens the financial autonomy of the BCL by amending the provision of the Law on the BCL on the remuneration and reimbursement of the costs incurred for the putting into circulation and protection of coins. Taken together, these provisions equip the BCL with the necessary powers and instruments for the fulfilment by the BCL of its ESCB related and national tasks and in accordance with its functional independence under Article 130 of the Treaty . 2.3 The initial designation of the BCL as a competent authority in the field of the protection of the euro

text: against counterfeiting was noted in a previous opinion .

text: 3. Specific observations

text: 3.1 Tasks of the BCL Under the existing Luxembourg legal framework, the BCL is currently designated as the competent authority within the meaning of

text: Article 2

text: (b) of

text: Council Regulation (EC) No 1338/2001

text: , as the National Analysis Centre (NAC) within the meaning of

text: Article 4 of Council Regulation (EC) No 1338/2001

text: and as the Coin National Analysis Centre (CNAC) within the meaning of

text: Article 5 of Council Regulation (EC) No 1338/2001

text: . By formally appointing the BCL as the competent authority for ensuring compliance with

text: Regulation (EU) No 1210/2010

text: , the draft law complements the BCL’s existing tasks in this area. Therefore, the draft law does not confer genuinely new tasks on the BCL in this respect. Furthermore, regarding the BCL’s tasks in relation to the issuance and circulation of euro coins, Article 128(2) of the Treaty provides that the right to issue euro coins rests with the Member States. Consequently, it is up to each Member State to specify the legal issuer of the euro coins . In Luxembourg, the BCL has already been entrusted with these tasks and exercises them as an agent acting in the name and on behalf of the Treasury . Consequently, the draft law does not confer genuinely new tasks on the BCL in this respect. 3.2 Monetary financing prohibition The monetary financing prohibition laid down in Article 123(1) of the Treaty prohibits overdraft facilities or any other type of credit facility with the ECB or the national central banks (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 . In view of the fact that the tasks conferred on the BCL by the draft law complement existing tasks of the BCL, which do not form part of the functions of the Eurosystem, the ECB welcomes the confirmation in the draft law that the BCL shall be reimbursed and remunerated for its tasks insofar as they relate to euro coins, both for its tasks in relation to the issuance and circulation of euro coins and its tasks in relation to the protection of the euro against counterfeiting, in accordance with an agreement between the BCL and the Treasury . The ECB takes positive note of the removal from the Law on the BCL of the link previously established between the amount of the remuneration and the monetary income resulting from the volume of coins in circulation, as there is no clear correlation between these two amounts. The ECB nevertheless suggests stipulating in the draft law the principles governing the agreement to be entered into between the

text: BCL and the Treasury. Reference should be made to a full and adequate payment of all costs incurred in performing the relevant tasks on the basis of “arm’s length” commercial terms. Such payment should either occur in advance of costs being incurred or on a regular and prompt basis as the costs arise . For the time being, the ECB is not in a position to assess the way in which the abovementioned reimbursement will be agreed upon. The ECB would therefore appreciate receiving a copy of the draft agreement between the Treasury and the BCL prior to its execution and entry into effect . 3.3. Sanctions The ECB noted in previous opinions that even though national authorities are not required to consult the ECB on measures taken to ensure that breaches of

text: are subject to effective, proportionate and deterrent sanctions, it is nonetheless beneficial to address this issue in order to encourage a harmonised approach across the Union to the extent possible, subject to national peculiarities . In the same context, the ECB also stresses that the power to impose criminal law sanctions, issue injunctions and impose financial penalties at the national level would be without prejudice to the ECB’s sanctioning power . 3.4. The ECB takes note of the original approach taken by the Luxembourg legislator, combining criminal law sanctions (ranging from EUR 1,250 to EUR 125,000) with the possible imposition by the BCL of injunctions and financial penalties not exceeding EUR 1,250 per day and a total of EUR 25,000. The ECB welcomes this pragmatic approach, whereby the BCL may promptly and autonomously resort to preventive measures contributing to compliance with Union law. In this manner, the draft law achieves an effective system of deterrent (criminal law) sanctions in relation to the protection of the euro against counterfeiting and thus contributes to maintaining public confidence in euro banknotes and coins in circulation.

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

text: Done at Frankfurt am Main, 23 September 2019.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Amendements gouvernementaux au projet de loi n°7218 relative à des mesures macroprudentielles portant sur les crédits immobiliers résidentiels et portant modification de: - la loi modifiée du 5 avril 1993 relative au secteur financier; - la loi du ler avril 2015 portant création d'un comité du risque systémique et modifiant la loi modifiée du 23 décembre 1998 relative au statut monétaire et à la Banque centrale du Luxembourg.

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

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

text: Projet de loi n°7218 relative à des mesures macroprudentielles portant sur les crédits immobiliers résidentiels et portant modification de: - la loi modifiée du 5 avril 1993 relative au secteur financier; - la loi du ler avril 2015 portant création d'un comité du risque systémique et modifiant la loi modifiée du 23 décembre 1998 relative au statut monétaire et à la Banque centrale du Luxembourg.

text: The Conseil d’Etat must issue its opinion on draft laws, and must, in particular verify the draft laws’ conformity with the Constitution of Luxembourg, international treaties, Union legal acts and general principles of law on the basis of Article 1 of the Law of 16 June 2017 on the organisation of the Conseil d’État (Loi du 16 juin 2017 sur l’organisation du Conseil d’État).

text: See the draft amendment to draft Article

text: bis(1) of the Law of 5 April 1993 on the financial sector (La loi modifiée du 5 avril 1993 relative au secteur financier).

text: Regulation (EU) No 575/2013

text: of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms and amending

text: Regulation (EU) No 648/2012

text: (OJ L 176, 27.6.2013, p. 1).

text: See amendment to draft Article

text: bis(2) of the Law of 5 April 1993 on the financial sector.

text: See paragraph 1.4 of Opinion

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

text: See paragraph 2.3 of Opinion

text: ; paragraph 2.4 of Opinion

text: and paragraph 3.2 of Opinion

text: See paragraph 1.2 of Opinion

text: ; ECB contribution to the European Commission’s consultation on the review of the EU macroprudential policy framework, page 5, available at https://www.ecb.europa.eu/pub/pdf/other/revieweumacroprudentialpolicyframework201612.en.pdf. .11 See paragraph 2.2 of Opinion

text: and paragraph 2.3 of Opinion

text: ; Recommendation of the European Systemic Risk Board of 4 April 2013 on intermediate objectives and instruments of macro-prudential policy (

text: ) (OJ C 170, 15.6.2013, p. 1); Warning of the European Systemic Risk Board of 22 September 2016 on medium-term vulnerabilities in the residential real estate sector of Luxembourg (

text: ) (OJ C 31, 31.1.2017, p. 31). See also Recommendation of the European Systemic Risk Board of 27 June 2019 on mediumterm vulnerabilities in the residential real estate sector in Luxembourg (

text: ). Not yet published in the Official Journal of the European Union. 12 See the opinion of the Conseil d’État (Avis du Conseil d’Etat, 20.3.2018, Projet de loi n°7218 relative à des mesures macroprudentielles portant sur les crédits immobiliers résidentiels et portant modification de: - la loi modifiée du 5 avril 1993 relative au secteur financier; - la loi du ler avril 2015 portant création d'un comité du risque systémique et modifiant la loi modifiée du 23 décembre 1998 relative au statut monétaire et à la Banque centrale du Luxembourg), p.2. 13 See Opinion

text: See paragraphs 2 and 3 of Opinion

text: . 15 See paragraph 2 of Opinion

text: . See also paragraph 5.2 of Opinion

text: and paragraph 2.3 of Opinion

text: . 16 See paragraph 2.3 of Opinion

text: . 17 Due to the lack of harmonisation of borrower-based measures and the related statistical data, there is limited information available to compare these measures across Member States. See ESRB, Overview of national measures of macroprudential interest, available on the ESRB’s website at www.esrb.europa.eu. 18 Compared to applied income-based measures in other euro area countries. 19 See paragraph 2.3 of Opinion

text: ; paragraph 2.4 of Opinion

text: ; paragraph 2 of Opinion

text: . 20 According to the explanatory memorandum, the conditions set forth for the authorities of other Member States, in particular for the German authorities, were taken into account in this context.

text: See Article 2 of the Law of 1 April 2015 establishing the National Systemic Risk Committee (La loi du ler avril 2015 portant création d'un comité du risque systémique et modifiant la loi modifiée du 23 décembre 1998 relative au statut monétaire et à la Banque centrale du Luxembourg). 22 See paragraph 1.2 of Opinion

text: . 23 Recommendation of the European Systemic Risk Board of 15 December 2015 on the assessment of cross-border effects of and voluntary reciprocity for macroprudential policy measures (

text: ) (OJ C 97, 12.3.2016, p. 9), the consolidated text can be found on the Publication Office’s website at www.eur-lex.europa.eu or the European Systemic Risk Board’s website at www.esrb.europa.eu. The concept of ‘reciprocity’ is defined in this Recommendation as ‘an arrangement, whereby the relevant authority in one jurisdiction applies the same, or equivalent, macroprudential measure, as is set by the activating relevant authority in another jurisdiction, to any financial institutions under its jurisdiction, when they are exposed to the same risk in the latter jurisdiction’. 24 See the ECB’s contribution to the European Commission’s consultation on the review of the EU macroprudential framework, page 16 to 17, available on the European Commission’s website at www.ec.europa.eu. See also paragraph 1.2 of Opinion

title: Opinion of the European Central Bank of 27 September 2019 on additional macroprudential tools for residential mortgages (CON/2019/34)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 27 September 2019 on additional macroprudential tools for residential mortgages (

text: ) Introduction and legal basis

text: On 29 July 2019, the European Central Bank (ECB) received a request from the Luxembourg Ministry of Finance for an opinion on draft governmental amendments to the draft law on macroprudential measures on residential mortgage loans in Luxembourg and amending the Law on banking and the Law establishing the Luxembourg Systemic Risk Committee (hereinafter the ‘draft amendments’). 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

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

text: 1. Purpose of the draft amendments

text: 1.1 The draft amendments are introduced to the draft law on macroprudential measures on residential mortgage loans in Luxembourg (hereinafter the ‘draft law’). The draft law proposed new macroprudential measures to be taken by the Commission de Surveillance du Secteur Financier (CSSF, Financial Sector Supervisory Commission) regarding conditions for the granting of loans secured by mortgages on residential property located in Luxembourg by credit institutions, insurance companies and professionals performing credit operations. These measures include: the loan-to-value (LTV) ratio, the loan-to-income (LTI) ratio, the debt-to-income (DTI) ratio, the debtservice-to-income (DSTI) ratio and maturity limits (hereinafter collectively referred to as ‘borrowerbased measures’). 1.2 According to the explanatory memorandum, the purpose of the draft amendments is to follow up on the formal opposition to the draft law as expressed by the Luxembourg Conseil d’État (State

text: Council) in the context of the national legislative procedure . In its opinion, the Conseil d’État requests a precise definition of the normative framework within which the CSSF may act when deciding on the application of borrower-based measures for loans secured by mortgages on residential property under the draft law. In response to this, the draft amendments more precisely define the normative framework within which the CSSF may act in this respect. 1.3 First, the draft amendments define a cumulative list of conditions that must be met for the CSSF to adopt borrower-based measures . These conditions are: (1) the activation of the measures can help to counteract the malfunctioning of the national financial system or reduce the accumulation of risks to national financial stability arising from developments in the real estate sector in Luxembourg, and (2) no other measures that may be taken under the Law of 5 April 1993 on the financial sector,

text: Regulation (EU) No 575/2013

text: of the European Parliament and of the Council or their implementing acts, taken independently or together, would allow these risks to be adequately mitigated. In order to strengthen this mechanism, an explicit duty is imposed on the Comité du Risque Systémique (CdRS, the National Systemic Risk Committee) to assess whether, in the event of a sustained and persistent increase in house prices and in the volume of loans secured by mortgages on residential property coupled with a significant deterioration of the ratios of the borrower-based measures, such developments indicate a vulnerability in the national financial system or pose a risk to national financial stability. 1.4 Second, the draft amendments restrict the scope of the borrower-based measures that may be adopted pursuant to the draft law by expressly excluding credit contracts in force at the time of the decision by the CSSF. 1.5 Third, the draft amendments introduce corridors for the maximum limits that the CSSF can apply when adopting borrower-based measures . These corridors are: (1) 75 to 100% for the maximum limit for the ratio between the total credit obligations of a borrower and the total market value of a given property (LTV ratio); (2) 400 to 1200% for the maximum limit for the ratio of the total amount of a borrower’s repayment obligations resulting from a loan secured by a mortgage on residential property and the borrower’s total available annual income (LTI ratio); (3) 400 to 1200% for the maximum limit for the ratio between the borrower’s total indebtedness and the borrower’s total available annual income (DTI ratio); (4) 35 to 75% for the maximum limit for the ratio between the total annual mortgage charges and the borrower’s total available annual income (DSTI ratio); and (5) 20 to 35 years for the maximum limit for the initial maturity of the loan (maturity limits).

text: 1.6 Finally, the draft amendments remove from the draft law the possibility that the CSSF may recognise conditions set down by the national authorities of other Member States for granting loans for property located in those Member States and apply them to the entities under its supervision .

text: 2. General observations

text: 2.1 As emphasised in previous opinions , from a financial stability perspective, the ECB welcomes the implementation of a legislative framework for borrower-based measures in all euro area Member States. The ECB notes its recommendation to add borrower-based instruments to the European macroprudential toolkit, such as limits on LTV, LTI or DSTI ratios, which are known to be more effective in addressing risks . The ECB also welcomes the core objective of the envisaged legislative framework on borrower-based measures under the draft law, namely to equip the Luxembourg authorities with macroprudential tools to be used in the event of threats to the stability of the national financial system due to developments in the Luxembourg real estate sector. This objective is also in line with the principles set out in the ESRB’s Recommendation on intermediate objectives and instruments of macro-prudential policy, in particular with regard to the objective to mitigate and prevent excessive credit growth and leverage . 2.2 The ECB understands that the sole objective of the draft amendments is to ensure that the draft law complies with national constitutional law, following the formal opposition of the Conseil d’État, and therefore aims to circumscribe the powers of the CSSF in relation to the adoption of macroprudential measures. The Conseil d’État has noted that these powers touch upon a field that is normally reserved to the law and not to the regulatory power by the Constitution of Luxembourg, namely the freedom to trade protected by Article 11(6) of the Constitution . The ECB understands that the conditions and limits imposed on the powers of the CSSF to adopt macroprudential measures are required in order for these measures to be legally sound within the national constitutional legal framework. 2.3 The ECB has already delivered its opinion on the draft law . The ECB notes that the draft amendments do not amend the aspects on which the ECB has previously opined. Against this

text: background, the ECB reiterates the observations made in its previous opinion . The ECB emphasises, in particular, that the Banque centrale du Luxembourg (BCL) should play a leading role in macroprudential oversight, given BCL’s expertise and existing responsibilities in the area of financial stability .

text: 3. Specific observations

text: 3.1 Corridors for the maximum limits for the ratios of the borrower-based measures In general, the ECB stresses that the relevant authorities should have the capability to act in a flexible and proportionate way when setting and calibrating macroprudential measures, in order to address effectively and efficiently potential risks to financial stability , while acting within the preestablished legal framework. The ECB understands that the draft amendments introduce corridors for the maximum limits for the ratios of the borrower-based measures in order to comply with national constitutional requirements. Available information on borrower-based measures adopted by other Member States suggests that the lower limits for the foreseen corridors for the LTV, LTI, DTI and DSTI ratios under the draft law are close to the ratios that are applied in most of these Member States. In that context, a reduction of the lower limits of the corridors in respect for the LTV, DTI, LTI and DSTI ratios, to the extent possible within the national constitutional framework, would ensure effective policy action, taking into account changing macro-financial conditions. Such a reduction of the lower limits would also allow for the potential application of stricter limits, for instance for buy-to-let purposes, for non-first time buyers, as well as under stress scenarios. Moreover, the upper limits for the income based ratios (LTI, DTI and DSTI ratios) under the draft law may be considered as too high given that such corridors might implicitly be interpreted as normative guidance for acceptable or prudent lending standards. Finally, the ECB suggests a regular review of the corridors, in order to allow the Luxembourg authorities to take into account policy experience and the implications of changes in macroeconomic and financial conditions . 3.2 Conditions for the activation of the borrower-based measures It is important that the decisions on the activation of borrower-based measures are taken in a prudent and preemptive manner, in order to mitigate the intensification of risks at an early stage and prior to the actual deterioration of the respective lending ratios. In this regard, the ECB understands that the draft amendments introduce certain conditions related to financial stability that must be met for the activation of borrower-based measures in order to comply with national constitutional requirements . The activation of the borrower-based measures is based on a two-

text: step mechanism. First, the CSSF should act following a recommendation issued by the CdRS where it has found a malfunctioning of the national financial system or the existence (or emergence) of a risk to national financial stability stemming from developments in the real estate sector. The CdRS can issue recommendations on corrective measures to address identified risks to financial stability, including recommendations concerning macroprudential tools used to achieve the objectives of macroprudential policy and intermediary objectives, by virtue of the Law of 1 April 2015 . Second, this mechanism is reinforced by the clarification that certain predetermined events trigger the compulsory assessment of the situation by the CdRS (i.e. a sustained and persistent increase in house prices and in the volume of loans secured by mortgages on residential property, coupled with a significant deterioration of the ratios when granting loans). The ECB understands that this two-step mechanism would generally allow the Luxembourg authorities to activate borrower-based measures with a forward-looking perspective. 3.3 Sequencing of the activation mechanism of the borrower-based measures The ECB understands that the proposed sequencing of the activation mechanism of the borrowerbased measures (the so-called ‘pecking order’) is justified by the need to comply with national constitutional requirements. The ECB reiterates its stance, with regard to Union legislation, that the pecking order should be removed as it constitutes a deterrent regarding the selection of instruments and results in a bias towards inaction . Macroprudential instruments should be chosen on the basis of their effectiveness and appropriateness, and not of mandatory sequencing. Against this background, and taking the constitutional constraints in Luxembourg into account, the ECB encourages the Luxembourg authorities to regularly review the application of the pecking order in order to ensure that it does not result in an inappropriate bias towards inaction in the activation of borrower-based measures. 3.4 Reciprocity of borrower-based measures applied by authorities of other Member States The ECB reiterates the importance of the cross-border recognition of macroprudential policies to foster the effectiveness of national macroprudential policies, as well as to pre-empt leakages in the financial system and ensure a level playing field for domestic and foreign banks. The European Systemic Risk Board also encourages the reciprocation of macroprudential tools . The ECB supports this approach . It is crucial to extend reciprocity to the extent possible under Luxembourg law, unless the relevant authority provides a reasoned justification not to apply the measure to other exposure-based measures, including activity-based measures that address risks to domestic

text: exposures (such as LTV, LTI, and DSTI ratios) and sectoral capital requirements . Some Member States have enshrined the reciprocation of borrower-based measures in their national law . Against this background, the ECB recommends establishing, within the limits of the national legal framework, the possibility for the CSSF to recognise borrower-based measures taken by the national authorities of other Member States.

text: Done at Frankfurt am Main, 27 September 2019.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: EUT C 351, 17.10.2019, s. 1.

sprak: sv

title: ECB-rådets yttrande av den 23 oktober 2019 om en rekommendation från rådet om utnämning av en ledamot i Europeiska centralbankens direktion (CON/2019/35)2019/C 373/02

text: Inledning och rättslig grund

text: Den 18 oktober 2019 mottog Europeiska centralbanken (ECB) en begäran från Europeiska rådets ordförande om ett yttrande över ett förslag till rådets rekommendation av den 10 oktober 2019 om utnämning av en ledamot Europeiska centralbankens direktion.

text: ECB-rådets behörighet att avge ett yttrande grundar sig på

text: artikel 283.2 i fördraget om Europeiska unionens funktionssätt

text: Allmänna kommentarer

text: 1. I rådets rekommendation, som överlämnats till Europeiska rådet och som Europaparlamentet och ECB-rådet nu ska yttra sig över, föreslås att Fabio Panetta utnämns till direktionsledamot i Europeiska centralbanken för en tid av åtta år från och med den 1 januari 2020.

text: 2. ECB-rådet anser att den förslagna kandidaten är en person som besitter den allmänt erkända auktoritet och yrkeserfarenhet inom den finansiella sektorn som krävs enligt artikel 283.2 i fördraget.

text: 3. ECB-rådet har inget att invända mot rådets rekommendation att utnämna Fabio Panetta till ledamot i Europeiska centralbankens direktion.

text: Utfärdat i Frankfurt am Main den 23 oktober 2019.

text: ECB:s ordförande

text: Mario Draghi


text: Grozījumi likumā “Par Latvijas Banku”.

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

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

text: Uzņēmumu ienākuma nodokļa likums.

text: Likums “Par uzņēmumu ienākuma nodokli”. 5 Article 18 of the Law on Latvijas Banka (likums “Par Latvijas banku”). 6 Articles 4(2) and 4(9) of the CIT Law (Uzņēmumu ienākuma nodokļa likums). 7 Latvijas Banka does not fall under the definition of corporate income tax payers provided by

text: Article 2(1)

text: (1) of the CIT Law. Moreover, paragraph I(2)(3) of the annotation to the draft law states that in the future Latvijas Banka will not be bound by other provisions of the CIT Law apart from the 20 % tax rate (without applying the 0.8 % coefficient increasing the tax base).

text: See the ECB’s Convergence Report 2018, 2.2.3. 9 See the ECB’s Convergence Report 2018, 2.2.3. 10 See paragraph 3.3 of Opinion

text: . All ECB Opinions are published on the ECB’s website at www.ecb.europa.eu. 11 See the ECB’s Convergence Report 2018, 2.2.3.

text: See paragraph 2.1 of Opinion

text: and the ECB’s Convergence Report 2018, 2.2.3. 13 See paragraph 3.3.3 of Opinion

text: . 14 Article 22(4) of the Law on Latvijas Banka. 15 Article 22(5) of the Law on Latvijas Banka provides that in a situation referred to in point 2 of Article 22(4) of the Law on Latvijas Banka, the Saeima may decide to relieve the Governor, the Deputy Governor and members of the Council of Latvijas Banka from office after a court decision with a guilty verdict becomes effective. 16 See, also, the opinion of Advocate General Kokott delivered on 19 December 2018, Rimšēvičs v Latvia,

text: , ECLI:EU:C:2018:1030, paragraph 77.

text: See paragraphs 2.1.3 and 2.1.4 of Opinion

text: . 18

text: Article 130

text: TFEU and Article 7 of the Statute of the ESCB. 19 See paragraph 2.2 of Opinion

text: , paragraph 3.1.3 of

text: , paragraph 2.2 of Opinion

text: and the ECB’s Convergence Report 2018, 2.2.3. 20 Article 23 of the Law on Latvijas Banka. 21 Article 27 of the Law on Latvijas Banka. 22 Article 29 of the Law on Latvijas Banka. 23 Article 26 of the Law on Latvijas Banka provides that the Council of Latvijas Banka shall adopt decisions on behalf of Latvijas Banka that are necessary to ensure the implementation of the tasks of Latvijas Banka, including the tasks of the European System of Central Banks.

title: Opinion of the European Central Bank of 25 October 2019 on amendments to the Law on Latvijas Banka (CON/2019/36)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 25 October 2019 on amendments to the Law on Latvijas Banka (

text: ) Introduction and legal basis

text: On 25 September 2019 the European Central Bank (ECB) received a request from the Budžeta un finanšu (nodokļu) komisija (Budget and Finance (Tax) Commission) of the Saeima (Parliament) of the Republic of Latvia for an opinion on a draft law containing amendments to the Law on Latvijas Banka (hereinafter the ‘draft law’) . The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

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

text: , as the draft law relates to Latvijas Banka and to the specific tasks conferred upon the ECB concerning the prudential supervision of credit institutions pursuant to Article 127(6) of the Treaty. 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 amends the profit distribution provisions of the Law on Latvijas Banka. Within 15 days following the approval of the annual report by the Council of Latvijas Banka and the covering of losses accumulated in the previous years, if any, Latvijas Banka shall transfer part of its profit earned during the reporting year to a State general budget account. That part shall be calculated by applying the tax rate established by the Corporate Income Tax Law (the ‘CIT Law’) without applying the coefficient which increases the tax base as laid down by the CIT Law. 1.2 The draft law amends the Law on Latvijas Banka by reducing the term of office of the Governor, Deputy Governor and the members of the Council of Latvijas Banka from six to five years. If the Governor, Deputy Governor or any of the members of the Council resign before their term expires, the Saeima shall appoint a new Governor, Deputy Governor or member of the Council in their place for a term of five years. As explained by the consulting authority in the letter accompanying the consultation request, decreasing the term of office from six to five years is in accordance with

text: the general practice and legislation in force, including the Statute of the European System of Central Banks (ESCB) and of the ECB (the ‘Statute of the ESCB’). It also aligns the term of office of the Governor, Deputy Governor and members of the Council of Latvijas Banka with the term of office of the Chairman and members of the Council of the Finanšu un kapitāla tirgus komisija (FKTK, Latvian Financial and Capital Market Commission). 1.3 The draft law amends the Law on Latvijas Banka to provide that the same person may hold the office of the Governor, the Deputy Governor and a member of the Council of Latvijas Banka for a maximum of two consecutive terms. As explained by the consulting authority, this provision of the draft law is in accordance with the latest international practice on the appointment of heads of institutions. 1.4 The transitional provisions of the draft law provide that the above-mentioned amendments to the Law on Latvijas Banka concerning the terms of office of the Governor, Deputy Governor and the members of the Council of Latvijas Banka shall enter into force upon the resignation of the Governor, Deputy Governor or the members of the Council of Latvijas Banka at the end of the current six-year term, or, in the event that the Governor, Deputy Governor or the members of the Council of Latvijas Banka resign before the expiry of the current six-year term, upon appointment of a new Governor, Deputy Governor or member of the Council of Latvijas Banka. Under the draft law which amends the Law on Latvijas banka, the current Governor, Deputy Governor and/or members of the Council of Latvijas Banka shall continue to perform their duties until the end of their six-year term of office, or until the Saeima has relieved them from office. 1.5 The draft law amends the Law on Latvijas Banka by providing that the Governor, Deputy Governor and a member of the Council of Latvijas Banka may be relieved from office by the Saeima if he/she (i) has submitted a resignation, or (ii) has been found guilty of serious misconduct or no longer fulfils the conditions required for the performance of his/her duties in accordance with Article 14.2 of the Statute of the ESCB. 1.6 The draft law amends the Law on Latvijas Banka by reducing the number of members of the Board of Latvijas Banka from six to four persons. The transitional provisions of the draft law provide that the above provision shall apply from 1 March 2020. 1.7 Finally, the transitional provisions of the draft law provide that by 31 October 2020 the Government shall submit to the Saeima a draft law on Latvijas Banka providing for its governance framework and operation and for the incorporation of the FKTK into Latvijas Banka while respecting the independence of its monetary policy functions and its functions as the finance and capital market supervisor and resolution authority.

text: 2. Observations

text: 2.1 Distribution of Latvijas Banka’s profits

text: 2.1.1 Under the existing provisions on profit distribution of the Law on Latvijas Banka, within 15 days following the approval of the annual report by the Council of Latvijas Banka and the covering of losses accumulated in the previous years, if any, Latvijas Banka transfers the following to a State

text: general budget account: (i) a part of its profit earned during the reporting year, which shall be calculated by applying the tax rate established by the Law on Corporate Income Tax ; and (ii) payments for the usage of State capital amounting to 50 % of the profit earned during the reporting year. The Council of Latvijas Banka may reduce the amount of dividends payable into the State budget if required for an increase of Latvijas Banka’s reserve capital due to financial risks affecting Latvijas Banka in the execution of its tasks . 2.1.2 The ECB understands that the draft law only amends the first component of the twofold calculation of the amount payable by Latvijas Banka into the State budget under point (i) above. This technical amendment is intended to take into account the new corporate income tax regime under the CIT Law, which entered into force on 1 January 2018. In particular, the CIT Law provides that the basis of corporate income tax, which is applied at the statutory rate of 20 % instead of the previous rate of 15 %, is the amount of distributed dividends divided by a coefficient of 0.8 meaning that the actual corporate income rate amounts to 25 % of the total amount of distributed dividends . Although Latvijas Banka is not subject to corporate income tax , the change in the corporate income tax regime is relevant for the calculation of the first component of the twofold calculation of the amount payable by Latvijas Banka into the State budget. In this respect, the draft law clarifies that this first component shall be calculated by applying the tax rate established by the CIT Law without applying the coefficient 0.8 which increases the tax base. This effectively means that Latvijas Banka will, under the first component, transfer into the State budget account 20 % of the profits earned during the reporting year, instead of the 15 % payable based on the old Law on Corporate Income Tax and also in lieu of the 25 % that would be payable if the coefficient 0.8 under the new CIT Law was to be included in the calculation. 2.1.3 The ECB notes that the amendments to the first component of the twofold calculation of the amount payable by Latvijas Banka into the State budget enter into force retroactively, from 1 January 2018. The ECB understands that the retroactive application of the amendments would not result in a recalculation of the amount payable by Latvijas Banka into the State budget for the year 2018. 2.1.4 The ECB understands that the second component of the twofold calculation of the amount payable by Latvijas Banka into the State budget remains unchanged so that Latvijas Banka is obliged to make a further payment of 50 % of those profits, in addition to the payment of 20 % of the profits earned during the reporting year. However, as noted above, under the draft law the Council of Latvijas Banka retains discretion to reduce the amount of dividends payable into the State budget if

text: required to increase Latvijas Banka’s reserve capital in the event of financial risks affecting Latvijas Banka in the execution of its tasks. 2.1.5 Under the principle of financial independence under the Treaty, a national central bank (NCB) must have available to it sufficient financial resources to fulfil its mandate, i.e. to perform its ESCBrelated tasks and its national tasks . An NCB’s statutes may prescribe how its profits are to be allocated. However, profits may only be transferred to the State budget 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 . Against this backdrop, notwithstanding the 5 % increase in the level of profits to be transferred by Latvijas Banka to the State budget, the ECB welcomes that profits will continue to be transferred to the State budget after the covering of losses accumulated in the previous years and that the Council of Latvijas Banka will retain discretion to reduce the amount of dividends payable into the State budget if required to increase Latvijas Banka’s reserve capital in the event of financial risks affecting Latvijas Banka in the execution of its tasks. 2.1.6 As previously noted by the ECB, under the current twofold calculation of the amount payable by Latvijas Banka into the State budget, amendments to the CIT Law result in changes to Latvijas Banka’s total contribution to the State budget. While in principle this is acceptable, the ECB reiterates that, for the sake of legal certainty, and to better safeguard Latvijas Banka’s financial independence, the maximum contribution of Latvijas Banka to the State budget should be determined by a single fixed rate of Latvijas Banka’s annual profits, set out in the Law on Latvijas Banka. Alternatively, if the current twofold calculation of the total rate of Latvijas Banka’s profit distribution is maintained, in view of Latvijas Banka’s obligations under the Treaty and the Statute of the ESCB, the ECB recommends that any changes to its financial obligations towards the State should be decided in cooperation with the Council of Latvijas Banka, taking into account its specific tasks . 2.2 Term of office of the Governor, Deputy Governor and members of the Council of Latvijas Banka 2.2.1 In accordance with Article 14.2 of the Statute of the ESCB, the statutes of an NCB shall, in particular, provide that the term of office of a Governor of an NCB shall be no less than five years. Personal independence would be jeopardised if the rules relating to security of tenure and grounds for dismissal of Governors were not to apply to members of the decision-making bodies of NCBs involved in the performance of ESCB-related tasks. In addition, various provisions of the Treaty and of the Statute of the ESCB require comparable security of tenure . If an NCB’s statutes are amended, the amending law must safeguard the security of tenure of the Governor and of other

text: members of decision-making bodies who are involved in the performance of ESCB-related tasks . Against this backdrop, the ECB welcomes the transitional provisions of the draft law, which ensure that the current Governor, Deputy Governor and members of the Council of Latvijas Banka will remain in office until the end of their original six-year terms (or until the Saeima has relieved them from office) in accordance with the requirements of the Treaty and the Statute of the ESCB. 2.2.2 In relation to the provision of the draft law which provides that the same person may not hold the office of the Governor, Deputy Governor and the members of the Council of Latvijas Banka for more than two consecutive terms, the ECB understands that this requirement does not apply in respect of terms served before the draft law comes into effect. This implies that the current and past members of the Council of Latvijas Banka would be able to serve two consecutive terms in the future, and that terms served in the past are not included and do not count towards the calculation of the two consecutive- term limit. The ECB welcomes this clarification from the perspective of legal certainty . 2.3 Grounds for relieving the Governor, Deputy Governor and members of the Council of Latvijas

text: Banka from office

text: 2.3.1 The Law of Latvijas Banka currently provides that the Governor, Deputy Governor and a member of the Council of Latvijas Banka may be relieved from office by the Saeima if: (i) he/she has submitted a resignation, (ii) he/she has been found guilty of serious misconduct in accordance with Article 14.2 of the Statute of the ESCB, or (iii) if other grounds of dismissal stipulated by Article 14.2 of the Statute of the ESCB apply. The ECB understands that the draft law is merely amending points (ii) and (iii) to combine them into a single provision that states that the Governor, Deputy Governor and the members of the Council of Latvijas Banka may be relieved from office by the Saeima if he/she has been found guilty of serious misconduct or no longer fulfils the conditions required for the performance of his/her duties according to Article 14.2 of the Statute of the ESCB. 2.3.2. The ECB welcomes this technical amendment. As noted above, in accordance with Article 14.2 of the Statute of the ESCB, 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 found guilty of serious misconduct. The principles underpinning the conditions under which a Governor may be relieved from office are autonomous concepts of Union law . The application and interpretation of these principles do not depend on national context, irrespective of whether such concepts are also embedded in the draft law. Therefore, the provision of the draft law relating to relieving the

text: Governor of Latvijas Banka from office is compatible with the Statute of the ESCB insofar as it replicates the wording of Article 14.2 of the Statute of the ESCB . 2.3.3 All members of the NCBs’ decision-making bodies must exercise their powers and carry out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB independently . Personal independence would be jeopardised if the rules relating to security of tenure and grounds for dismissal of Governors were not to apply to members of NCB decisionmaking bodies involved in the performance of ESCB-related tasks, especially where a governor is ‘first among equals’ with colleagues and with equivalent voting rights, or where such members are involved in the performance of ESCB-related tasks . Given that not only the Governor but also the Deputy Governor and the other member of the Council of Latvijas Banka are involved in the performance of ESCB-related tasks, the ECB welcomes that the provisions of the draft law regarding security of tenure apply not only to the Governor, but also to the other members of the Council of Latvijas Banka in order to safeguard their independence. 2.4 Reduction of number of members of Latvijas Banka’s Board The Board of Latvijas Banka is an executive body appointed by the Council of Latvijas Banka to ensure the efficient management of Latvijas Banka . The members of the Board of Latvijas Banka are employees of Latvijas Banka’s central apparatus. The Board of Latvijas Banka manages the operations of Latvijas Banka, implementing the resolutions of the Council of Latvijas Banka . The Chairperson of the Board manages Latvijas Banka by implementing the decisions adopted by the Council and the Board of Latvijas Banka. The Chairperson of the Board is entitled to participate in the meetings of the Latvian Government when authorised by the Governor or in his/her absence and to represent the interests of Latvijas Banka . The ECB understands that it is the Council of Latvijas Banka which is Latvijas Banka’s decision-making body involved in the performance of its ESCB-related tasks . The Board of Latvijas Banka is an executive body of Latvijas Banka which merely implements the resolutions of the Council of Latvijas Banka. Therefore the ECB has no comments on the provision of the draft law which reduces the number of members of the Board of Latvijas Banka from six to four persons. 2.5 Proposed legislation providing for a new governance framework of Latvijas Banka and the

text: incorporation of FKTK into Latvijas Banka

text: The ECB understands that the draft law requires the Latvian Government to submit a draft law to the Saeima providing for a new governance framework of Latvijas Banka and the incorporation of

text: the FKTK into Latvijas Banka by 31 October 2020. The ECB understands that the Latvian authorities will in due course, pursuant to Article 127(4) of the Treaty, consult the ECB on this draft legislation, which falls within the ECB’s fields of competence. This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 25 October 2019. [signed]

text: The President of the ECB

text: Mario DRAGHI


text: COM(2019) 354 final.

text: Se Färdigställandet av EU:s ekonomiska och monetära union, rapport av Jean-Claude Juncker, i nära samarbete med Donald Tusk, Jeroen Dijsselbloem, Mario Draghi och Martin Schulz, 22 juni 2015, s. 7, finns på kommissionens webbplats www.ec.europa.eu

text: Se de allmänna kommentarerna i yttrandet

text: . Alla ECB:s yttranden finns på ECB:s webbplats www.ecb.europa.eu

title: Europeiska centralbankens yttrande av den 30 oktober 2019 om ett förslag till förordning om en styrningsram för budgetinstrumentet för konvergens och konkurrenskraft för euroområdet (CON/2019/37)2019/C 408/03

text: Inledning och rättslig grund

text: Den 9 och 18 september 2019 mottog Europeiska centralbanken (ECB) en begäran från Europeiska unionens råd respektive Europaparlamentet om ett yttrande över ett förslag till Europaparlamentets och rådets förordning om en styrningsram för budgetinstrumentet för konvergens och konkurrenskraft för euroområdet (nedan kallat förslaget till förordning).

text: ECB:s behörighet att avge ett yttrande grundas på artiklarna

text: och

text: i fördraget om Europeiska unionens funktionssätt eftersom förslaget till förordning har betydelse för Europeiska centralbankssystemets huvudmål att upprätthålla prisstabilitet och, utan att åsidosätta huvudmålet att upprätthålla prisstabilitet, stödja den allmänna ekonomiska politiken inom unionen, såsom avses i artiklarna 127.1 och 282.2 i fördraget och

text: artikel 2 i stadgan

text: för Europeiska centralbankssystemet och Europeiska centralbanken.

text: I enlighet med artikel 17.5 första meningen i arbetsordningen för Europeiska centralbanken har detta yttrande antagits av ECB-rådet.

text: 1. Allmänna kommentarer

text: 1.1 De övergripande målen för budgetinstrumentet för konkurrenskraft och konvergens

text: I de fem ordförandenas rapport av den 22 juni 2015 underströks behovet av att färdigställa den Ekonomiska och monetära unionens (EMU) ekonomiska och institutionella uppbyggnad. Rapporten underströk särskilt vikten av att korrigera den divergens som blev synlig under krisen och påbörja en ny konvergensprocess. Av rapporten framgår bl.a. att konvergens på lång sikt också kräver politiska insatser som får betecknas som strukturreformer, dvs. reformer avsedda att modernisera ekonomin och skapa mer tillväxt och sysselsättning.

text: Budgetinstrumentet för konvergens och konkurrenskraft (nedan kallat BICC) har inte bara som mål att stödja strukturpolitiken utan även offentliga investeringar i medlemsstater som har euron som valuta genom att dela ut projektbundna medel. Medlemsstater som deltar i växelkursmekanismen (ERM II) får också delta i BICC på frivillig basis (nedan tillsammans med medlemsstater som har euron som sin valuta benämnda deltagande medlemsstater).

text: Mot denna bakgrund förväntas ett framgångsrikt BICC att förbättra ekonomins funktionssätt och medföra en mer tillväxtfrämjande sammansättning av de offentliga utgifterna, med positiva konsekvenser för tillväxten och en ökad förmåga för euroområdet att hantera negativa chocker. På så sätt skulle BICC bidra till både en väl fungerande EMU och en effektiv penningpolitik från ECB:s sida. BICC bör ges tillräckliga resurser för att uppnå sina mål.

text: 1.2 BICC:s styrning

text: Genom förslaget till förordning inrättas ett ramverk för styrningen av BICC i två steg. I ett första steg ska de strategiska riktlinjerna för reform- och investeringsprioriteringarna i euroområdet som helhet antas. I det andra steget sedan sker en landsspecifik vägledning för enskilda medlemsstater i euroområdet som ska vara förenlig med de strategiska riktlinjerna och rådets landsspecifika rekommendationer. Utifrån de landsspecifika rekommendationerna skulle sedan medlemsstaterna ta fram förslag till reform- och investeringspaket som ska lämnas in till kommissionen för bedömning. Utifrån kommissionens initiativ och diskussionerna i Eurogruppen fattar rådet beslut om de politiska och strategiska riktlinjerna.

text: I möjligaste mån bör styrningen av BICC samordnas med den europeiska planeringsterminen och alla andra existerande mekanismer för ekonomisk samordning. Detta skulle säkerställa nödvändig enhetlighet av processer och förfaranden. Förslaget till förordning strävar efter att uppnå sådan enhetlighet i de strategiska riktlinjerna som utarbetats av rådet under eurotoppmötet och, efter diskussioner i Eurogruppen, rekommendationerna för euroområdet. Det understryker också behovet av att säkerställa att den landsspecifika vägledningen är förenlig med de landsspecifika rekommendationerna som utgör en viktig del av den europeiska planeringsterminen. I linje med kommissionens fördragsfästa roll de har när det gäller att samordna den ekonomiska politiken, skulle kommissionen granska de förslag till reform- och investeringspaket som medlemsstaterna lämnar in, övervaka hur de genomförs samt initiera framtagandet av strategiska riktlinjer och anvisningar.

text: Eftersom behovet av reform- och investeringsprioriteringar varierar avsevärt mellan medlemsstaterna, är det viktigt att de förslag till reform- och investeringspaket som medlemsstaterna lämnar in bedöms mot allmänt accepterade landsspecifika behov, så som det för närvarande planeras. Mot denna bakgrund bör de landsspecifika rekommendationerna – som kommissionen redan ger ut varje år och som godkänns av Europeiska rådet inom ramen för den europeiska planeringsterminen – vara den huvudsakliga referenspunkten för medlemsstaterna och de bör uttryckligen hänvisa till de existerande landsspecifika rekommendationerna när de lämnar in sina förslag till reform- och investeringspaket. Eftersom kommissionens landsrapporter som ges ut inom ramen för rådets landsspecifika rekommendationer fr.o.m. 2019 anger viktiga strukturpolitiska behov och områden för offentliga investeringar i de olika medlemsstaterna, utgör dessa en lämplig utgångspunkt när de nationella reform- och investeringspaketen tas fram. Den landsspecifika vägledningen skulle kunna specificera dessa landsspecifika rekommendationer ytterligare om så är nödvändigt.

text: Beroende på när reform- och investeringspaketen avseende BICC lämnas till kommissionen för bedömning, bör de landsspecifika rekommendationerna från föregående år användas som ett riktmärke för BICC. Vid bedömningen av de reform- och investeringspaket som medlemsstaterna lämnat in kunde kommissionen även beakta de landsspecifika rekommendationerna för det aktuella året om dessa har offentliggjorts i tid.

text: Det tillvägagångssätt som beskrivs ovan bör medföra att de landsspecifika rekommendationerna fortsätter att vara den huvudsakliga referenspunkten och säkerställer enhetlighet i sak mellan olika samordningsförfaranden, främst den europeiska planeringsterminenen. I det sammanhanget bör BICC kunna nå sin potential och fokusera på de viktigaste ekonomiska och finanspolitiska utmaningarna i medlemsstaterna.

text: 1.3 Övriga överväganden

text: Med beaktande av BICC:s mål att stödja strukturpolitiken och offentliga investeringar för ökad konkurrenskraft och konvergens, krävs ytterligare diskussioner om hur man ska inrätta en makroekonomisk stabiliseringsfunktion som för närvarande saknas i euroområdet. En sådan funktion finns i alla monetära unioner, för att bättre hantera ekonomiska chocker som inte kan hanteras på enbart nationell nivå. Såsom ECB tidigare påpekat skulle en korrekt utformad gemensam makroekonomisk stabiliseringsfunktion öka den ekonomiska motståndskraften i de deltagande medlemsstaterna och euroområdet som helhet, och på så sätt stödja den gemensamma penningpolitiken. En budgetpolitisk stabiliseringsfunktion bör vara av tillräcklig omfattning.

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

text: Utfärdat i Frankfurt am Main den 30 oktober 2019.

text: Mario Draghi

text: ECB:s ordförande