text: Ο περί της Έκδοσης Κυβερνητικών Εγγυήσεων προς Πιστωτικά Ιδρύματα για την Παραχώρηση Δανείων σε Επιχειρήσεις και Αυτοτελώς Εργαζομένους Νόμος του 2021 (Ν. 110(I)/2021).

text: Το περί της Έκδοσης Κυβερνητικών Εγγυήσεων Προς Πιστωτικά Ιδρύματα για τη Παραχώρηση Δανείων σε Επιχειρήσεις και Αυτοτελώς Εργαζομένους Διάταγμα του 2021.

text: The total amount of government guarantees provided for is made up of: EUR 300,000,000 for loans to self-employed persons and micro businesses; EUR 550,000,000 for loans to small and medium-sized businesses; and EUR 150,000,000 for loans to large businesses.

text: It is noted that Article 12 of the draft decree stipulates that credit institutions must submit on a half-yearly basis or as and when requested by the Treasury, an electronic file containing a breakdown of the loans granted.

text: See paragraph 3.1 of Opinion

text: and paragraph 3.2.4 of Opinion

text: See paragraph 2 of Opinion

title: Opinion of the European Central Bank of 11 June 2021 on the role of the Central Bank of Cyprus as regards the issuance of government guarantees to credit institutions (CON/2021/21)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 11 June 2021 on the role of the Central Bank of Cyprus as regards the issuance of government guarantees to credit institutions (

text: ) Introduction and legal basis

text: On 11 May 2021 the European Central Bank (ECB) received a request from the Ministry of Finance of the Republic of Cyprus for an opinion on (a) the Law on the issuance of government guarantees towards credit institutions for the granting of loans to businesses and self-employed persons (hereinafter the ‘Law’) and (b) a draft Decree on the issuance of government guarantees towards credit institutions for the granting of loans to businesses and self-employed persons (hereinafter the ‘draft decree’). 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), as the Law contains provisions which concern the Central Bank of Cyprus (CBC) and the tasks conferred on the ECB pursuant to Article 127(6) of the Treaty concerning policies relating to the prudential supervision of credit institutions. 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 and the draft decree

text: 1.1 The Law empowers the Minister for Finance, following the approval of the Directorate-General for Competition of the European Commission and subject to any requirements imposed by the European Commission, to grant government guarantees up to a total of one billion euro to credit institutions for the purpose of granting new low-interest loans to businesses and/or self-employed persons . These guarantees are granted for the purpose of increasing the liquidity in the economy and must not be used to facilitate the repayment or restructuring of any outstanding performing or non-performing facilities. Credit institutions must pass the benefit of the guarantees on to the businesses and/or selfemployed persons receiving the new loans. The potential borrowers need to prove that they were not facing financial difficulties on 31 December 2019, but that they face financial difficulties due to the impact of the COVID-19 pandemic after that date. The explanatory note that accompanies the

text: consultation request of the Ministry of Finance explains that the aim of the Law is to address the effects of the measures taken to contain the COVID-19 pandemic. 1.2 The Law stipulates that the government guarantees must be granted by 31 December 2021, for a minimum period of three months and a maximum period of six years. In addition, the government guarantees must cover any losses that may be incurred as a result of loans granted, up to a maximum of 70% of losses incurred by the Government, with the relevant credit institution retaining a minimum of 30% of losses. The potential borrowers are required to provide security for the loans by mortgaging any unmortgaged immovable property or other assets, unless no such property or assets are available, in which case the loan granted is unsecured. The loans may be granted to potential borrowers in order to cover liquidity needs, working capital and investments in Cyprus. If a credit institution refuses a loan application, the applicant has the right to file a complaint with the Monitoring Committee mentioned in paragraph 1.4 below. 1.3 Further, the Law envisages that credit institutions will be invited to apply for government guarantees during a period of thirty days from the date on which the draft decree is adopted by the Minister for Finance. A contract will then be entered into between the Government and each of the interested credit institutions that apply, on the expiry of which the respective government guarantee will lapse. Government guarantees are to be allocated to individual credit institutions according to their share of total domestic deposits and their share of total performing domestic loans, excluding amounts relating to companies registered or established but not physically present in Cyprus and excluding interbank deposits and loans. The provision of government guarantees is to be subject to payment of pro rata fees by the credit institutions. The maximum amount of guarantees that may be provided to any one credit institution is 25% of its Tier 1 and Tier 2 capital on 31 December 2020. 1.4 Without prejudice to the powers of the CBC, the Law establishes a Monitoring Committee to monitor the implementation of the provisions of the Law and the decrees adopted under it, and to coordinate their proper and effective implementation. The Committee is to be comprised of: the Accountant General or the Deputy Accountant General, acting as chair; one officer of the Ministry of Finance appointed by the Minister for Finance; two officers of the CBC appointed by the Minister for Finance on the recommendation of the Governor of the CBC; and the Auditor General, or his or her representative, as observer. The Monitoring Committee must prepare a report every two months for the attention of the Minister on all matters that fall within its remit, which it must submit every two months to the Parliamentary Committee on Financial and Budgetary Affairs. The Minister shall also provide the same Parliamentary Committee with a quarterly update in connection with the said report. 1.5 The Law empowers the Minister for Finance to issue decrees for the purposes of ensuring a better implementation of the Law, and in particular to determine matters such as the procedure for and terms on which the guarantees are granted, the amount of the fee paid by the credit institutions, the applicable interest rate, and a recommendation to credit institutions to suspend payment of instalments, other than the amount relating to interest, for a period of 12 months from the date of commencement of the loan agreement. 1.6 In the event of an infringement by a credit institution or borrower of any provision of the Law and/or the decrees adopted under it, or of any terms and conditions of the guarantees, the Minister for Finance may impose an administrative penalty ranging from EUR 1,000 to EUR 500,000 depending

text: on the severity of the infringement, and a further penalty ranging from EUR 100 to EUR 50,000 for each day the infringement continues taking into account the severity of the infringement. Before proceeding with the imposition of a penalty, the Minister must consult with the CBC in order to ensure that the penalty does not create any financial stability risks. Before imposing the fine, the Minister must also notify the credit institution or loan beneficiary concerned, explain why action is to be taken against it, and allow the right to submit observations within fifteen days from the date of the notice. 1.7 The draft decree sets out the details which relate to the granting of the government guarantees, including, but not limited to, the amount and interest rate of the new loans, the definition of the losses that can be covered under the scheme, the criteria for the distribution of the guarantees to credit institutions and the control mechanisms for the use of the guarantees by credit institutions.

text: 2. Observations

text: 2.1 The ECB notes that the Monitoring Committee established under the Law has been entrusted with the responsibility of (a) monitoring the implementation of the provisions of the Law and the decrees adopted under it and (b) coordinating their proper and effective implementation. The Committee must also report to the Minister for Finance on all aspects that fall within its remit and its report must be submitted to the Parliamentary Committee on Financial and Budgetary Affairs. 2.2 The ECB understands that the Monitoring Committee’s role is, as its name implies, confined to an observational or monitoring role, with a duty to report on its observations to the relevant Cypriot authorities. This is evidenced by the fact that the Law does not confer on the Monitoring Committee any decision-making or discretionary powers in relation to the application of the provisions of the Law. Rather, the Law merely confers on the Monitoring Committee a function of reporting as to whether the legal framework is being properly and effectively implemented. In addition, the fact that the Law does not set out any rules of procedure governing the members of the Monitoring Committee or the Committee’s operation is another indication that the Committee has no legal powers with regard to taking any decisions on matters relating to credit institutions which fall within the remit of the Law and the decrees adopted under it. 2.3 Moreover, with regard to the task of the Monitoring Committee to monitor the implementation of the provisions of the Law and the decrees adopted under it, and given the fact that the Law does not confer any decision-making or discretionary powers on the Monitoring Committee, the ECB understands that the monitoring will be done for the sole purpose of informing the Minister for Finance and the relevant Parliamentary Committee. It is worth noting that the Law does not specify how such monitoring will take place in practice. In particular, the Law does not entrust the Monitoring Committee with any investigative and/or supervisory powers to ensure the compliance of credit institutions with the Law, such as the power to request information from credit institutions or inspect their books and documents. In the absence of such powers, it is not possible to understand from the Law how the Monitoring Committee might discharge its responsibilities of monitoring the implementation of the provisions of the Law and the decrees adopted under it, and of coordinating

text: their proper implementation. At any rate, the ECB underlines that any investigative or other type of power and any task that may be conferred on the Monitoring Committee by the legislator would need be exercised for the sole purpose of fulfilling the tasks of that Committee under the Law and should be without prejudice to the tasks and powers conferred by Union law on the CBC and the ECB as regards the prudential supervision of credit institutions. It is further understood that the Monitoring Committee’s responsibility for coordinating the effective implementation of the Law and the decrees adopted under it, is intended to ensure that the underlying objective of granting new low-interest loans to businesses and self-employed persons for the purpose of increasing the liquidity in the Cypriot economy is achieved. 2.4 The Law is silent in relation to the function of the Monitoring Committee of receiving complaints by unsuccessful loan applicants, and does not prescribe the procedure to be followed in the event that such a complaint is submitted, or what the role of the Committee is. In the absence of any specific provisions, the ECB understands that the Monitoring Committee will simply report to the Minister for Finance and to the relevant Parliamentary Committee on the receipt of such complaints, without having the power to take any action towards resolving or adjudicating on any disputes arising out of such complaints. 2.5 Considering the tasks conferred on the Monitoring Committee, the ECB understands that the role envisaged for the Monitoring Committee by the Law is essentially that of fiscal oversight. This understanding is also supported by the presence of the Accountant and Auditor Generals, as chair and observer, respectively, in the Monitoring Committee. In view of the mandate of the Monitoring Committee to assist the Government in the application of a State guarantee scheme, a qualified independent entity would be well positioned to monitor compliance with the Law . In the absence of any fiscal oversight mandate or role for the CBC, it is noted that the officials of the CBC are not well positioned for the purposes of fulfilling this mandate. 2.6 By the same token, given the CBC’s role as a national competent authority for the prudential supervision of credit institutions within the Single Supervisory Mechanism (SSM), the participation of CBC officials in the Monitoring Committee, and especially in potential reporting by the Monitoring Committee, may give rise to legal uncertainty as regards the capacity in which they participate in that Committee and the tasks that they perform in this capacity, which could potentially lead to conflicts of interest. This is particularly relevant in relation to the function of the Monitoring Committee of receiving complaints by unsuccessful applicants against decisions of credit institutions which are themselves supervised by the CBC and the ECB within the SSM. Even though the Monitoring Committee does not enjoy any formal powers in this respect, it should be ensured that, in practice, there is no interference with credit institutions’ credit risk management processes and that conflicts of interest with respect to prudential supervisory concerns regarding the need for effective credit risk management are avoided. 2.7 In this regard, the national legislator is invited to reconsider the CBC’s representation in the Monitoring Committee at the next available occasion, and thus ensure that the legal framework will be monitored by an independent body that is not involved in the prudential supervision of credit

text: institutions . The national legislator could also consider a better delineation of the tasks and powers of the Monitoring Committee in order to ensure legal clarity and certainty in the application of the Law. 2.8 In any case, given that the Law does not confer any tasks on the CBC, and given that the Monitoring Committee does not enjoy any decision-making or discretionary powers under the Law, the ECB understands that neither the CBC nor its representatives on the Monitoring Committee can incur any liability in respect of that Committee’s activities. 2.9 Finally, the Law envisages a consulting role for the CBC in relation to the financial stability implications of the imposition by the Minister for Finance of administrative penalties on credit institutions and borrowers. Given that the Law does not confer any new tasks on the CBC, but rather envisages for it this consulting role and leaves decisions on the imposition of penalties with the Minister, it is understood that the CBC cannot incur any liability in this respect. 2.10 The ECB expects to be re-consulted if it is envisaged that: (a) the role of the CBC is to be substantially expanded beyond that provided for by the Law and the decrees adopted under it and the CBC is to extend its participation in the Monitoring Committee beyond the provision of advice in the context of the Committee’s monitoring mandate; and (b) powers are to be conferred on the Monitoring Committee that may have an impact on the prudential supervision of credit institutions.

text: This opinion will be published on EUR-Lex.

text: Done at Frankfurt am Main, 11 June 2021.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE


publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 11 June 2021 on the regulation of the forint maturity mismatch of credit institutions (CON/2021/22)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 11 June 2021 on the regulation of the forint maturity mismatch of credit institutions (

text: ) Introduction and legal basis

type: rubrik

text: On 19 May 2021 the European Central Bank (ECB) received a request from the Magyar Nemzeti Bank (MNB) for an opinion on a draft MNB Decree replacing the MNB Decree 20/2015 (VI. 29.) on the regulation of the forint maturity mismatch of credit institutions (hereinafter the ‘draft decree’). 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 decree concerns 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. Background and purpose of the draft decree

text: 1.1 When the long-term foreign currency mortgage loans were converted into forint in 2015, the forint maturity mismatch increased substantially in the domestic banking system, as mortgage loans converted into forint had maturities of over 10 years, which were financed by short-term forint funds . To tackle the maturity mismatch, the MNB introduced the mortgage funding adequacy ratio (hereinafter the ‘MFAR’). The MFAR requires that credit institutions must finance a given part of their forint residential mortgage loans with long-term mortgage-backed liabilities . In 2017, the minimum ratio was 0.15, and this ratio was increased to 0.20 in 2018 and 0.25 in 2019 . 1.2 In order to channel long term funding for mortgage lending, the MNB disincentivised cross-ownership of mortgage bonds by other credit institutions. In the light of the pandemic situation, in March 2020 the MNB eased this by temporarily removing the cross-ownership adjustment coefficient . 1.3 The draft decree introduces a preferential treatment for green mortgage bonds and green refinancing loans by providing that credit institutions may take into account green mortgage bonds issued and green refinancing loans received with a 150 per cent weighting when calculating the MFAR. As noted in the explanatory memorandum accompanying the draft decree, the preferential treatment is

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: 2 See the Magyar Nemzeti Bank, Macroprudential Report 2017, available at: https://www.mnb.hu/letoltes/makroprudencialis-jelentes-en.pdf.

text: 3 See the Magyar Nemzeti Bank, Macroprudential Report 2017, available at: https://www.mnb.hu/letoltes/makroprudencialis-jelentes-en.pdf.

text: 4 See the MNB Decree 55/2016 (XII. 22.) amending the MNB Decree 20/2015 (VI. 29.).

text: 5 See the MNB Decree 5/2020 (III. 19.) amending the MNB Decree 20/2015 (VI. 29.). introduced because the MNB considers that green lending and green mortgage bond issuances have a positive impact on financial stability. These instruments may also have a lower credit risk as a result of lower utility costs and house prices that are more resilient to shocks. Furthermore, a more diversified mortgage bond investor base facilitates the stable funding of the banking system. 1.4 Instead of introducing an autonomous definition of green bonds the draft decree provides that all mortgage bonds qualify as green if, based on documentation publicly disclosed by the issuer, they are in conformity with the Green Bond Principles 2018 issued by the International Capital Market 6 7 Association or the Climate Bonds Standard V3.0 issued by the Climate Bonds Initiative , and this conformity is certified by an external party. 1.5 In parallel with the preferential treatment of green funds, the draft decree introduces a number of further changes to support the objectives of the MFAR regulation: (i) the required level of the MFAR will increase from 0.25 to 0.30; (ii) green mortgage-based funds must have an original maturity of at least 5 years instead of the 3-year limit applicable to other funds; (iii) all mortgage bonds must be listed on a stock exchange in order to be eligible for inclusion in the calculation of the ratio; and (iv) the restrictions on cross-ownership by other credit institutions which were suspended due to the coronavirus pandemic will be reintroduced in an amended form, disincentivising such crossownership by applying a correction factor, which is calculated based on the ratio of mortgage bonds owned to total assets.

text: 2. General observations

text: 2.1 The MNB launched its ‘Green Programme’ in 2019 to mitigate the risks associated with climate change and other environmental problems, to expand green financial services in Hungary, to widen the related knowledge base in Hungary and abroad, and to reduce financial market participants’ and its own ecological footprint . The ECB welcomes the MNB’s commitments relating to environmental sustainability . As the ECB has recently noted, physical risks and transition risks associated with climate change may cause abrupt changes in prices and thereby threaten price stability . 2.2 The ECB broadly welcomes policies and initiatives that contribute to mitigating risks related to climate change. Although methodologies to assess the magnitude of climate-related risks for banks and financial stability are still in their infancy, it is increasingly clear from available estimates that the impact of these risks is likely to be significant .

text: 6 Available at: https://www.icmagroup.org/sustainable-finance/the-principles-guidelines-and-handbooks/green-bondprinciples-gbp/.

text: 7 Available at: https://www.climatebonds.net/climate-bonds-standard-v3.

text: 8 Available at: https://www.mnb.hu/greenfinance/english.

text: 9 See paragraph 2.1 of Opinion

text: . All ECB opinions are published on EUR-Lex.

text: 10 See paragraph 2.4 of Opinion

text: 11 See paragraph 2.4 of Opinion

text: ; European Central Bank, Financial Stability Review May 2021, p. 12. 2.3 The ECB acknowledges that there is some preliminary evidence of a risk differential between green and other assets . In order to ensure that the prudential framework remains risk-based, evidence relating to the risk differential of green and other bonds should be taken into consideration when calibrating a dedicated prudential treatment. The ECB therefore notes the importance of collecting and assessing data on the riskiness of green mortgage loans and bonds. Regarding the proposed preferential treatment of green mortgage bonds and green refinancing loans in the numerator of the MFAR, the ECB recognises the challenges inherent to the task of providing such analysis and encourages the MNB to continue to make efforts in this direction to ensure the proper calibration of the measure in the coming years. As the prudential policy for climate change is rapidly evolving at both the European and global level, the ECB also fully supports the ongoing alignment of the MNB’s regulatory approaches to ensure consistency, specifically with forthcoming Union green bond standards. This opinion will be published on EUR-Lex. Done at Frankfurt am Main, 11 June 2021. [signed] The President of the ECB Christine LAGARDE

text: 12 See also the Bank of England Staff Working Paper No. 852, Benjamin Guin and Perttu Korhonen, ‘Does energy efficiency predict mortgage performance?’, January 2020, available at www.bankofengland.co.uk; The Energy efficiency Data Protocol and Portal Final report on correlation analysis between energy efficiency and risk, available at www.eedapp.energyefficientmortgages.eu; and the EconPapers report No. 2020:06, Monica Billio, Michele Costola, Loriana Pelizzon and Max Riedel, ‘Buildings’ Energy Efficiency and the Probability of Mortgage Default: The Dutch Case’, available at www.econpapers.repec.org.

type: vagledning

utgivare: ecb


text: Bundesgesetz, mit dem das Bundesgesetz vom 23. Juni 1971 über die Erhöhung der Quote Österreichs beim Internationalen Währungsfonds und die Übernahme der gesamten Quote durch die Oesterreichische Nationalbank geändert wird.

text: Bundesgesetz über die Oesterreichische Nationalbank, BGBl. Nr. 50/1984 as amended by BGBl. I Nr. 61/2018.

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 L 332, 31.12.1993, p. 1).

text: All ECB opinions are published on EUR-Lex.

text: Bundesgesetz vom 23. Juni 1971 über die Erhöhung der Quote Österreichs beim Internationalen Währungsfonds und die Übernahme der gesamten Quote durch die Oesterreichische Nationalbank, BGBl. Nr. 309/1971 as amended by BGBl. Nr. 190/1978.

text: See paragraph 2.1 of Opinion

text: See paragraph 2.2 of Opinion

text: See paragraph 2.1 of Opinion

text: . 10 Under Section 69(1) of the Law on the OeNB, this income is derived pursuant to Articles 32, 33 and 51 of the Statute of the European System of Central Banks and of the European Central Bank.

text: and lists specific amounts that must be deducted from its income . The ECB understands that, in contrast to the amounts listed in Section 69(1) of the Law on the OeNB that reduce the annual income of the OeNB, the funds made available to the IMF under the draft law are to be made solely from profits which have been fully realised, accounted for and audited, and only insofar as there is in fact a distributable profit of the OeNB within the meaning of Section 69(3) of the Law on the OeNB. Furthermore, the profits distributed to the Federation will thus be reduced only if the OeNB decides to make use of its authorisation to provide funds to the IMF, and the Minister of Finance consents, as stated in the draft law.

text: Pursuant to Section 69(1) of the Law on the OeNB, the following sums shall, irrespective of the operating profit, be deducted and not recognised as profit: (1) earnings from the assets in which the pension reserve, i.e. the reserve fund serving to meet the pension claims of the OeNB’s employees, has been invested, and which shall be paid into that reserve fund; (2) amounts of interest which, pursuant to the agreement between the OeNB and the European Recovery Program Fund concluded in accordance with Section 3(4) of the European Recovery Program Fund Act, were credited during the year to the temporary reserve account for European Recovery Program loans extended by the OeNB; and (3) earnings from the assets in which the fund for the promotion of scientific research and teaching set up by the OeNB is invested, which shall be endowed to this fund.

title: Opinion of the European Central Bank of 25 June 2021 on Austria’s participation in certain initiatives of the International Monetary Fund (CON/2021/23)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 25 June 2021 on Austria’s participation in certain initiatives of the International Monetary Fund (

text: ) Introduction and legal basis

text: On 20 May 2021 the European Central Bank (ECB) received a request from the Austrian Federal Ministry of Finance for an opinion on a draft law amending the Federal Law of 23 June 1971 on the increase of Austria’s quota in the International Monetary Fund (IMF) and the transfer of the entire quota by the Oesterreichische Nationalbank (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 the Oesterreichische Nationalbank (OeNB). 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 authorises the OeNB to make funds available to the IMF from the share of net profit available to the Austrian Federation under Section 69(3) of the Law on the Oesterreichische 3 Nationalbank (hereinafter the ‘Law on the OeNB’) if the measures financed in this way correspond to the objectives of Austrian or international development cooperation or serve the associated risk provisioning by the IMF. The OeNB may only make such funds available to the IMF with the consent of the Austrian Minister for Finance. 1.2 The explanatory memorandum accompanying the draft law states that the need for ultimate funding from federal resources arises from the fact that the ECB considers the financing of IMF measures by the OeNB that does not result in claims having the characteristics of reserve assets within the 4 meaning of

text: recital 14

text: of

text: Council Regulation (EU) No 3603/93

text: to be an infringement of the prohibition on monetary financing pursuant to Article 123 of the Treaty. Reference is made in this

text: respect to Opinion

text: on Austria’s contribution to the Catastrophe Containment and Relief Trust of the IMF . 1.3 According to the explanatory memorandum accompanying the draft law, another reason for the introduction of the draft law arises from the fact that the OeNB cannot participate in the IMF’s voluntary initiatives without authorisation under federal law. Pursuant to Section 2(1) of the Law of 23 June 1971 on the increase of Austria’s quota in the International Monetary Fund and the transfer 6 of the entire quota by the OeNB , only the OeNB is authorised to meet all financial obligations from Austria’s membership. Since the IMF’s voluntary initiatives do not qualify as obligations arising from membership in the IMF, the draft law aims to create the legal basis for contributions from funds which are available to the Austrian Federation and are only processed via the OeNB. The explanatory memorandum states that this complies with Union law and refers in this respect to the Law on the National Foundation for Research, Technology and Development, to which the ECB did not object in Opinion

text: . 1.4 The explanatory memorandum notes that in the future, based on the amendments introduced by the draft law, contributions could be made by the OeNB, with the consent of the Austrian Minister of Finance, for example to IMF disaster relief, such as the IMF Catastrophe Containment and Relief Trust (CCRT) and the IMF Poverty Reduction and Growth Trust (PRGT). Furthermore, the draft law simplifies contributing to ongoing debt relief initiatives, such as the soon to be concluded initiative to provide debt relief to heavily indebted poor countries (HIPC initiative) and similar future international initiatives. 1.5 Finally, the draft law stipulates that the funds made available to the IMF shall reduce, for the respective assessment period, the corporate tax base of the OeNB calculated in accordance with Section 72(1) of the Law on the OeNB by the same amount by which the funds are transferred to the IMF.

text: 2. Observations

text: 2.1 The ECB understands that the draft law creates a legal basis for Austria to participate in the financing of what the draft law identifies as voluntary IMF initiatives, including those related to disaster relief under the CCRT and the PRGT, as well as the ongoing debt relief HIPC initiative. 2.2 As noted above, the explanatory memorandum accompanying the draft law refers to Opinion

text: as regards the compliance of tasks performed by a national central bank (NCB) with the monetary financing prohibition laid down in Article 123(1) of the Treaty. As specified in that opinion, the monetary financing prohibition is subject to certain exemptions laid down in

text: Council Regulation (EC) No 3603/93

text: . In particular,

text: Article 7 of Regulation (EC) No 3603/93

text: provides that the financing by NCBs of obligations falling upon the public sector in relation to the IMF are not regarded as a credit facility within the meaning of Article 123 of the Treaty.

text: Recital 14

text: of

text: Regulation (EC) No 3603/93

text: clarifies the rationale behind this exemption, stating that it is appropriate to

text: authorise the financing by the central banks of obligations falling upon the public sector in relation to the IMF because such financing ‘results in foreign claims which have all the characteristics of reserve assets’. Therefore, the exemption in

text: Article 7 of Regulation (EC) No 3603/93

text: must be interpreted in line with this rationale . The ECB further notes that, in respect of Opinion

text: , the explanatory memorandum accompanying the draft legislative provisions on which the ECB was consulted indicated that the OeNB’s contribution to the CCRT at the time was to be considered a donation. This led to the view being taken in that opinion that the OeNB’s contribution to the CCRT, as set out in draft legislative provisions in question, did not result in foreign claims that have all the characteristics of reserve assets . 2.3 By contrast to the draft legislative provisions in respect of which the ECB issued Opinion

text: , the ECB understands that the purpose of the draft law is that the funds to be provided by the OeNB to the IMF for such voluntary initiatives are taken from the funds of the Austrian Federation. In a similar way to the approach taken to contributions that may be transferred 9 by the OeNB in its own name but on behalf of the Austrian Federation in other contexts , the draft law authorises the OeNB to make funds available to the IMF from the share of the net profit to which the Austrian Federation is entitled pursuant to Section 69(3) of the Law on the OeNB. 2.4 Against this background, the ECB would like to clarify the following aspects. First, to the extent that the contribution of a Member State to IMF initiatives is transferred by the NCB from funds held by that Member State with the NCB, the conditions specified in paragraph 2.2, and in Opinion

text: , for the application of the exemption laid down in

text: Article 7 of Regulation (EC) No 3603/93

text: need not be fulfilled. In such cases, there is no need to rely on this exemption because the financing of the contribution to IMF initiatives is essentially provided by the Member State itself and not by the NCB, which is only executing the transfer of funds on the Member State’s behalf. Consequently, the transfer of funds to the IMF by the NCB would, in such cases, not give rise to a credit facility in favour of the Member State with the NCB within the meaning of Article 123(1) of the Treaty and

text: Article 1(1)

text: (b)(ii) of

text: Regulation (EC) No 3603/93

text: . 2.5 Second, in a case such as that envisaged under the draft law in which the provision of funds to the IMF takes place in the context of the distribution of the OeNB’s profits, for the contribution of the Austrian Federation to IMF initiatives to be regarded as being financed by the Federation itself, and not by the OeNB, the transfer of funds to the IMF by the OeNB must be distinct from and subsequent to the OeNB’s profit disbursement. Otherwise, the financing of the contribution to IMF initiatives could not be construed as provided by the Federation instead of the OeNB. In this respect, it is noted that Section 69(3) of the Law on the OeNB explicitly refers to the distribution of the OeNB’s net profits and the right of the Federation to receive a share of 90% of the OeNB’s net 10 profits, while Section 69(1) of the Law on the OeNB governs the total annual income of the OeNB

text: This opinion will be published on EUR-Lex.

text: Done at Frankfurt am Main, 25 June 2021.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE


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 betreffende de Centrale voor Kredieten aan Ondernemingen/ Loi relative à la Centrale des Crédits aux Entreprises.

text: Koninklijk besluit betreffende de Centrale voor Kredieten aan Ondernemingen/ Arrêté royal relatif à la Centrale des Crédits aux Entreprises.

text: Regulation (EU) 2016/867

text: of the European Central Bank of 18 May 2016 on the collection of granular credit and credit risk data (ECB/2016/13) (OJ L 144, 1.6.2016, p. 44).

text: Article 3 of the AnaCredit Regulation.

text: Article 5 of the AnaCredit Regulation. 7 Article

text: ° b) of the draft law and Article

text: ° and Article

text: ° and 4° of the draft royal decree. 8 Article

text: ° and 15° of the draft law and Article

text: ° of the draft royal decree. 9

text: Article 11

text: , §2 of the draft law. 10

text: Article 11

text: , § 3 of the draft law. 11 Article 10 of the royal decree. 12 Recital 15 of the AnaCredit Regulation

text: Article 11

text: , § 1 of the draft law. 14

text: Article 20

text: , §1 and §2 of the draft law. 15

text: Council Regulation (EC) 2533/98 of 23 November 1998

text: concerning the collection of statistical information by the European Central Bank (OJ L 318, 27.11.1998, p. 8). 16 Article 22 of the draft law. 17 Recital 15 of the AnaCredit Regulation.

text: Article 8(3) of the AnaCredit Regulation. 19

text: Articles 8

text: to 8c of

text: Regulation (EC) 2533/98

text: . 20 Article 18 of the AnaCredit Regulation. 21

text: Article 7 of Regulation (EC) 2533/98

text: . 22

text: Regulation (EC) No 2157/1999 of 23 September 1999

text: on the powers of the European Central Bank to impose sanctions (ECB/1999/4) (OJ L 264, 12.10.1999, p. 21).

text: Article 2(1) of Regulation (EC) No 2157/1999

text: (ECB/1999/4). 24 Article 20 of the draft law. 25 Recital 12 of the AnaCredit Regulation. 26

text: Regulation (EU) 2016/679

text: of the European Parliament and of the Council of 27 April 2016 on the protection of natural persons with regard to the processing of personal data and on the free movement of such data, and repealing Directive

text: (General Data Protection Regulation) (OJ L 119, 4.5.2016, p. 1). 27 Article 12 of the draft law. 28 See paragraph 3.1 of Opinion

text: . All ECB opinions are available on EUR-Lex. 29 Article 22 of the draft law.

title: Opinion of the European Central Bank of 16 July 2021 on the Corporate Credit Register (CON/2021/24)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 16 July 2021 on the Corporate Credit Register (

text: ) Introduction and legal basis

text: On 27 May 2021 the European Central Bank (ECB) received a request from the Belgian Minister for Finance for an opinion on a draft law (hereinafter the ‘draft law’) and an accompanying draft royal decree (hereinafter the ‘draft royal decree’) on the Corporate Credit Register (CCR) (hereinafter collectively referred to as the ‘draft legislation’). 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 fourth indents of

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

text: , as the draft legislation relates to the Nationale Bank van Belgiё/Banque Nationale de Belgique (NBB/BNB) and the collection, compilation and distribution of monetary, financial, banking, payment systems and balance of payments statistics. 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 legislation

text: 1.1 The draft legislation amends and replaces the current legal framework, including the Law of 4 March 2012 on the Central Corporate Credit Register (CCCR) and the Royal Decree of 15 June 2012 on the CCCR , under which credit institutions established in Belgium must report certain data concerning credits granted to beneficiaries to the NBB/BNB. According to the report accompanying the draft royal decree, the main purpose of the draft legislation is to end the double reporting that exists currently for credit institutions under the existing legal framework in Belgium. At the moment, the NBB/BNB operates two different databases: one is used to collect credit data reported under the national legal framework and the other is used to collect statistical credit data under

text: Regulation (EU) 2016/867

text: of the European Central Bank (ECB/2016/13) (hereinafter the ‘AnaCredit Regulation’), under which credit institutions are obliged to report certain credit data to the relevant national central bank (NCB) . As noted in the report, the information reported to the two

text: databases overlaps. The draft legislation creates a framework whereby only one of the two databases will be retained, i.e. the one maintained for the purposes of the AnaCredit Regulation, obliging reporting agents to only report data once. 1.2 In addition, the draft legislation proposes to supplement the data to be collected under the AnaCredit Regulation with additional data in three ways. First, unlike the AnaCredit Regulation, which contains a reporting threshold of the debtor's commitment amount, equal to or larger than EUR 25 000, on any reporting reference date within the reference period , the draft legislation does not contain any reporting threshold. Second, the draft legislation includes leasing companies within the definition of ‘reporting agents’ that are obliged to collect and report data under the draft legislation , whereas the actual reporting population under the AnaCredit Regulation consists of credit institutions and resident foreign branches of credit institutions. Third, while the AnaCredit Regulation does not provide for the collection of information concerning natural persons, the draft legislation provides for the mandatory collection of data by reporting agents when the counterparty to credit for a professional purpose, excluding credit for private purpose like mortgage credit or consumption credit, is a natural person, whether acting within the framework of his or her professional activities or not . These provisions are in line with the existing reporting requirements under the current national framework in Belgium. 1.3 The draft law authorises the NBB/BNB to exchange the collected information on credit granted to legal entities with the ECB, allowing the ECB and Eurosystem NCBs to use the data in compliance with the AnaCredit Regulation and with other institutions in Belgium such as the Financial Services and Markets Authority, the Belgian Data Protection Authority and the Economic Inspection . For each institution the draft law precisely stipulates the purposes for which data may be shared with that specific institution. Each institution must take the necessary measures to ensure the confidentiality of such data and their exclusive use for the purposes provided for in the draft law. The ECB and the NCBs, in particular, may consult and use the communicated data in accordance with the AnaCredit Regulation, including for the establishment and maintenance of feedback loops by NCBs for their reporting agents, provided that the recorded data and legal protection of confidentiality are equivalent to those of the CCR and that they provide their data on a reciprocal basis . Under the draft royal decree, the NBB/BNB is required to transmit all data recorded in the CCR to the ECB, with the exception of (1) data disclosed by leasing companies; (2) data relating to natural persons; (3) data relating to legal entities for off-balance-sheet commitment-type instruments; and (4) data relating to legal entities for which the amount owed by the debtor for ‘credit and deposit’ type instruments with the same reporting agent is less than EUR 25 000 . Thus, the NBB/BNB will transfer all data that is to be collected under the AnaCredit Regulation to the ECB and the NCBs, as also laid out in that Regulation . 1.4 Under the draft legislation, reporting agents also have the possibility to access the CCR, either prior

text: to the conclusion of a credit or lease agreement either in the context of undertaking risk assessment on a potential counterparty or in the context of managing an agreement . 1.5 The draft law provides that when a reporting agent does not comply with the obligation to collect and report data as determined in the draft legislation, the NBB/BNB can impose daily penalties on that reporting agent. The NBB/BNB is required, when deciding to impose daily penalties, to take into account the sanctions already imposed or to be imposed by the ECB in the context of infringement proceedings concerning the same facts, and must consult the ECB in that regard. Furthermore, in determining the amount of the daily penalty, particular account must be taken of the sanctions already imposed or to be imposed by the ECB in the context of infringement proceedings concerning the same facts . The explanatory memorandum clarifies that the maximum amounts and the criteria for determining the amount of the daily penalty payment are aligned with the provisions of

text: Council Regulation (EC) 2533/98

text: concerning the powers of the ECB in the field of sanctions, to which Article 18 of the AnaCredit Regulation refers. The maximum amount of the daily penalty per day of delay is in line as well with the same provisions. 1.6 The draft law authorises the NBB/BNB to ask reporting agents to reimburse the costs incurred by it in order to collect, record, manage, verify and disseminate the data recorded in the CCR .

text: 2. General observations

text: 2.1 The ECB welcomes the draft legislation since it amends and replaces the existing national legal framework on reporting obligations related to information on credit granted to legal entities in order to obtain a comprehensive and efficient centralisation of granular credit data needed for national purposes and for the purposes of the AnaCredit Regulation. The draft legislation allows for financial institutions to better evaluate the risks of granting credit and enables supervisory authorities to evaluate the risks borne by the financial sector more easily. In addition, the draft legislation incorporates, to the extent possible, the reporting obligations that have direct effect by reason of the AnaCredit Regulation with additional obligations imposed by national law into one legal framework. Indeed, it is one of AnaCredit’s key long-term objectives to harmonise reporting requirements and implementation practices. The ECB especially welcomes in this respect the efforts of the Belgian legislator to prevent double reporting by reporting agents in the future. It is worth noting that in the event that where the scope of the AnaCredit Regulation is extended to include the supplementary data described in paragraph 1.2 above, the draft law would need to be revisited. 2.2 The supplementary data to be reported under the draft legislation are in line with the AnaCredit Regulation. In this respect, the AnaCredit Regulation clarifies that the NCBs in the European System of Central Banks (ESCB) are allowed to extend the reporting of credit data beyond the scope outlined in the AnaCredit Regulation for their own statutory purposes, in line with relevant national law . Further, the AnaCredit Regulation provides that the statistical reporting requirements it establishes

text: are without prejudice to any other current or future reporting requirements with regard to credit data in accordance with national law or other reporting frameworks .

text: 3. Specific observations

text: 3.1 In respect of the possibility for the NBB/BNB to share the collected data with various institutions, to the extent that it wishes to transmit confidential statistical information collected by other NCBs to other institutions, the ECB wishes to highlight that the rules on the protection and use of confidential statistical information collected by the ESCB are laid out in

text: Regulation (EC) No 2533/98

text: . In particular,

text: Article 8(1) of Regulation (EC) No 2533/98

text: allows for the use of confidential statistical information by the ESCB “exclusively for the exercise of the tasks of the ESCB”, except in a number of defined circumstances. Moreover, paragraphs 4, 4a and 5 of Article 8 of the same regulation allow for the transmission of confidential statistical information within and outside the ESCB, subject to the fulfilment of a number of requirements and conditions. These latter provisions are particularly important when it comes to information collected by other NCBs in accordance with the AnaCredit Regulation to which the NBB/BNB may have access. 3.2 The ECB also wishes to draw the attention of the Minister for Finance to the sanctioning regime which applies in respect of a failure by reporting agents to comply with the ECB’s statistical reporting requirements, and which is also referred to in the AnaCredit Regulation . In particular, the ECB has the power to impose sanctions on reporting agents which fail to comply with the reporting obligations set out in the regulations adopted by the ECB, and specifically where (a) no statistical information is received by the ECB or an NCB by the established deadline; or (b) the statistical information is incorrect, incomplete or in a form not complying with the requirement . The ECB understands that the sanctioning provisions in case of infringements under the draft law operate without prejudice to this separate sanctioning regime of the ECB under EU law. While the ECB’s sanctioning regime under the AnaCredit Regulation is referenced in the draft law, the draft law could usefully clarify, for the avoidance of doubt, that the sanctioning regime under the draft law operates without prejudice to the ECB’s sanctioning regime under EU law. At the same time, Article 18 of the AnaCredit Regulation clarifies that the ECB's power to impose sanctions for non-compliance with the reporting obligations of the AnaCredit Regulation is independent of an NCB's right to sanction, in line with its national law, non-compliance with statistical or other reporting obligations that apply to reporting agents under the respective national legal framework in line with Article 8(3) of the AnaCredit Regulation. Therefore, the ECB’s power to impose sanctions is independent of the right of the NBB/BNB to impose sanctions with regard to the information that the draft law requires to be reported that goes beyond the scope of the AnaCredit Regulation. 3.3 In addition,

text: of the European Central Bank (ECB/1999/4) provides that no more than one infringement procedure shall be initiated against the

text: same undertaking based on the same facts. Further, no decision to initiate an infringement procedure may be taken by the ECB or the NCB until they have informed or consulted with one another . This means that where the same facts indicate a failure to comply with a statistical reporting obligation under an ECB regulation and a failure to comply with a reporting obligation that an NCB is competent to enforce, there is no specific priority with respect to the action that must be taken. This is a matter that must be resolved by consultation between the ECB and the NCB to ensure not more than one infringement procedure is initiated against the same reporting agent for the same non-compliance. The ECB welcomes that this consultation procedure between the NBB/BNB and the ECB is explicitly foreseen in the draft law, both for the purpose of imposing a periodic penalty payment and for the purpose of determining the amount of the penalty payment , in order to ensure compliance with the principle of non bis in idem, whereby no legal action may be instituted twice in respect of the same cause of action. 3.4 With regard to the supplementary data on natural persons, as noted in the recitals of the AnaCredit Regulation , should the scope of reporting be extended to include personal data in subsequent stages, the protection of the rights of natural persons with regard to the collection and processing of their personal data should be ensured. It is important to ensure that the appropriate measures are taken for the protection of personal data collected under the new national framework in accordance with

text: Regulation (EU) 2016/679

text: of the European Parliament and of the Council . The ECB therefore welcomes that the draft law provides this protection of the processing of personal data collected concerning natural persons . 3.5 As previously noted by the ECB , the ECB has no concerns regarding the financing of the NBB/BNB’s task of registering the data that reporting agents collect and report to the NBB/BNB in the CCR, as well as maintaining the CCR, as the NBB/BNB can reimburse the costs made via the reporting agents .

text: Done at Frankfurt am Main, 16 July 2021.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE


text: GG I/167.

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: In this case, the debit difference is the difference between the nominal value of the securities issued in exchange for the initial securities, and the acquisition cost of the initial securities. If a loss was incurred after the acquisition of the initial securities due to their impairment and that impairment was not offset against a reserve the initial acquisition cost must be taken into account.

text: 5 (ii) the debit difference due to credit risk resulting from (a) the write-off or restructuring of debt , or (b) the transfer, that is the sale or securitisation, of loans or their transfer to a financing or credit institution or other firm or legal person, provided they are managed by a credit institution in accordance with the provisions of Law 4261/2014 (GG I/107) or a firm that manages claims from loans and credits as referred to in Law 4354/2015. This debit difference may currently be deducted from their gross revenue in 20 equal annual instalments, starting in the fiscal year in which the respective debt was written off or the loan was transferred, irrespective of when the assets concerned were derecognised from an accounting perspective. The abovementioned 30- and 20-year amortisation periods are an exception to the general rule according to which losses recorded within a fiscal year may be carried forward and offset against profits over the following five successive fiscal years. 1.3 Any accounting write-offs of loans by credit institutions relating to debt write-offs or loan transfers, as mentioned in paragraph 1.2(ii), that have not been recorded by the end of the fiscal year of the accounting write-off, will not affect the tax profit or loss for that year, until the occurrence of the events referred to in paragraph 1.2(ii), at which point they will be converted to debit differences. 1.4 The law caps the aggregate debit difference referred in paragraph 1.2(ii) and the temporary difference referred to in paragraph 1.3 at the sum of the cumulative provisions and other credit riskrelated losses that have been recorded in the accounts up to 30 June 2015. The amortisation of the aforementioned debit difference will be charged to the tax profit or loss results for the fiscal year concerned. If the credit institutions have set up, and deducted from their gross tax revenue, an additional special provision for the debt written off or transferred, that provision will be credited to the tax profit and loss results for the fiscal year in which the loan was written off or transferred and will be reported as a taxable business profit. 1.5 The draft amendments provide that debit differences related to sovereign debt restructuring losses (see the case outlined in paragraph 1.2(i)) will amortise before debit differences related to debt writeoffs or loan transfers (see the case outlined in paragraph 1.2(ii)). In addition, the draft amendments provide that the amount of the annual amortisation of the debit differences for a paragraph 1.2(ii) case will be limited to the amount of profit calculated, based on the provisions of the draft amendments, before the paragraph 1.2(ii) debit differences were deducted and after the debit difference of a paragraph 1.2(i) case has been deducted. 1.6 Furthermore, the draft amendments provide that the remaining annual amortisation amount that was not offset will be carried forward for amortisation in subsequent fiscal years within the 20-year period referred to in paragraph 1.2(ii), when there will be a residual tax profit following the annual amortisation of the debit differences referred to in paragraphs 1.2(i) and (ii) that corresponds to those fiscal years. The draft amendments also provide that, for the purpose of determining the amortisation

text: In this case, the debit difference will be equal respectively either the total amount written off, less unregistered interest, which will not be registered, or, where loans or credits are transferred, the amount of the loss.

text: Debt written off or restructured i) under Article 61 of Law 4307/2014 (GG I/246); ii) under Law 3869/2010 (GG I/130); or iii) as a result of the definitive write-off of or an agreement to restructure debt with debtors with outstanding loans.

text: Under Law 4354/2015 (GG I/176) or Law 3156/2003 (GG I/157) respectively.

text: As referred to in

text: Article 27

text: A(2)(c) of the Greek Tax Code.

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). See also paragraph 2.1 of Opinion

text: , which refers to an expectation that amending provisions should not affect requirements of

text: Article 39(2) of Regulation (EU) No 575/2013

text: . All ECB opinions are published on EUR-Lex.

text: See paragraph 2.1 of Opinion

text: See also paragraph 2.3 of Opinion

text: , which refers to deferred tax assets in Portugal but is also applicable to Greece.

title: Opinion of the European Central Bank of 29 July 2021 on deferred tax assets of Greek credit institutions (CON/2021/25)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 29 July 2021 on deferred tax assets of Greek credit institutions (

text: ) Introduction and legal basis

text: On 22 July 2021 the European Central Bank (ECB) received a request from the Greek Ministry of Finance for an opinion on certain draft amendments (hereinafter the ‘draft amendments’) to Article 27 of the Greek Tax Code (law 4172/2013) on the carry-forward of losses and deferred tax assets (DTAs) arising from debit differences. 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 amendments relate to rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets, and to the tasks conferred upon the ECB pursuant to Articles 127(6) and 128 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 amendments

text: 1.1 As explained in the consultation letter, the draft amendments aim to remove any tax impediments to a potential acceleration of Greek banks’ non-performing exposures (NPE) reduction plans and to facilitate their participation in the recently adopted prolongation of the Hercules Asset Protection Scheme (HAPS II). The draft amendments are also deemed necessary in order to mitigate any repercussions from the deleveraging of the Greek banking system. 1.2 The Greek Tax Code currently allows credit institutions to deduct from their gross tax revenue, and thus amortise: (i) the debit difference resulting from the exchange of Greek sovereign-issued or -guaranteed bonds in the context of a sovereign debt restructuring scheme. This difference may be deducted in 30 equal annual instalments, starting in the financial year in which the securities were exchanged; and

text: priority of debit differences carried forward, older debit differences will take precedence over newer ones. 1.7 Lastly, the draft amendments provide that if at the end of the 20-year amortisation period balances remain that have not been offset, these balances will constitute losses that will be subject to the basic 5-year carry-forward rule. 1.8 It is proposed that the draft amendments apply retroactively from 1 January 2021 to the debit differences referred to in paragraph 1.2(ii), which have accrued on or after 1 January 2016. In this regard, the consultation request letter states that the draft amendments should be adopted before Greek credit institutions announce their interim financial statements for the first half of 2021 (interim statements are expected to be published in August) and their participation in HAPS II.

text: 2. Observations on the draft amendments

text: 2.1 The ECB understands that the draft amendments propose to amend the currently linear 20-year amortisation period for debit differences generated by credit institutions due to losses arising from the write-off or restructuring of debt and/or the transfer of loans, in three respects: firstly, to explicitly provide for the amortisation of such debit differences after the amortisation of differences resulting from losses incurred due to sovereign debt restructuring, and therefore over the later years of the amortisation period; secondly, to allow the remaining annual deduction that was not offset to be carried forward for amortisation (deduction) in subsequent fiscal years within the 20-year amortisation period if there is a residual taxable profit following the annual deduction of the debit differences referred to in paragraphs 1.2(i) and (ii) that corresponds to those fiscal years; and thirdly, to provide that if at the end of the 20-year amortisation period balances remain that have not been offset, these balances will constitute losses that will be subject to the basic five year carry-forward rule. 2.2 The ECB notes that the reduction of NPE by Greek systemic credit institutions currently remains the principal supervisory priority. In that respect, the ECB understands that the objective of the draft amendments is to facilitate the significant deleveraging initiatives undertaken by Greek credit institutions. The ECB also understands that the draft law does not amend

text: Article 27

text: A of the Greek Tax Code on the eligibility of DTAs for conversion to deferred tax credits (DTCs), a provision that is relevant to the requirements of

text: of the European Parliament and of the Council . In this regard, the ECB reiterates its expectation that if in any circumstances a lack of profitability is observed, the DTAs are replaced with a direct claim on the Greek Government . 2.3 The ECB observes that the high percentage of DTCs in the CET1 ratios of Greek systemic credit institutions, for which no further reduction is envisaged in the medium-term, remains a point of supervisory concern and notes in that respect that the draft amendments will further delay the

text: derecognition of DTCs from the institutions’ balance sheets. The proposed new amortisation mechanism does not exclude the risk that in 20 years’ time the DTCs will not have been absorbed fully or partially. In the same vein, the ECB invites more generally the consulting authority to review the Greek DTC framework in the short or medium term in order to provide a more comprehensive and structural solution. The consulting authority is also invited to consider the cliff-off effect that the one-off write-off of outstanding unabsorbed DTCs could have on the capital positions of the banks. 2.4 The ECB takes note of the proposed retroactive effect of the draft amendments that are proposed to apply to debit differences which have accrued on or after 1 January 2016. The ECB is of the view that the draft amendments should only apply to the amortisations of DTCs related to debit differences accruing on or after 1 January 2021, so that amortisations booked in the previous years are not reversed and the impact on the capital ratios is only forward-looking. 2.5 The ECB recommends that the consulting authority carefully assesses the implications of the draft amendments for the risks stemming from the nexus between the Greek banking sector and the Greek sovereign, inter alia via its impact on sovereign contingent liabilities and debt sustainability . It is also for the consulting authority to assess the implications of the draft amendments for the incentives of Greek banks to raise capital on the market. 2.6 It is for the European Commission to assess the draft law’s compliance with Union state aid rules.

text: This opinion will be published on EUR-Lex.

text: Done at Frankfurt am Main, 29 July 2021.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE


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). 2 Laki kiinnitysluottopankkitoiminnasta 16.7.2010/688. 3

text: Directive (EU) 2019/2162

text: of the European Parliament and of the Council of 27 November 2019 on the issue of covered bonds and covered bond public supervision and amending Directives

text: and

text: (OJ L 328, 18.12.2019, p. 29).

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). 5 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). 6 See paragraph 3.1 of Opinion

text: . All ECB opinions are published on EUR-Lex. 7 See General observations in Opinion

text: . 8 See paragraph 3.1 of Opinion

text: . 9 See pages 22 and 35 of the draft legislative proposal.

text: See also the Banking Supervision webpage ‘National powers exercised by the ECB’ on the ECB’s website at www.ecb.europa.eu. 11 See paragraph 3.5 of the Explanatory Memorandum under ‘Bond schemes, their supervision and authorisation procedures’.

title: Opinion of the European Central Bank of 11 August 2021 on a draft law on mortgage banks and covered bonds and related laws (CON/2021/26)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 11 August 2021 on a draft law on mortgage banks and covered bonds and related laws (

text: ) Introduction and legal basis

text: On 4 July 2021 the European Central Bank (ECB) received a request from the Finnish Ministry of Finance for an opinion on a draft law on mortgage banks and covered bonds and related laws (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

text: , as the draft law relates to rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets and the ECB’s specific 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.

text: 1. Purpose of the draft law

text: The purpose of the draft law is to replace the current Law on mortgage banks . It implements

text: Directive (EU) 2019/2162

text: of the European Parliament and of the Council in Finnish law. In addition, the draft law contains certain provisions that are not required in order to implement

text: Directive (EU) 2019/2162

text: but are designed to promote competition and harmonise the regulation of this area in view of the pronounced international and Nordic dimension of the covered bonds market.

text: 2. General observations

text: The vast majority of the draft law’s provisions do not exceed the scope of

text: Directive (EU) 2019/2162

text: with respect to the ECB’s fields of competence.

text: 3. Specific observations

text: Allocation of supervisory competences regarding covered bonds

text: 3.1 The draft law’s provisions regarding the right to issue additional authorisations for the issuance of covered bonds must be interpreted in line with

text: Council Regulation (EU) No 1024/2013

text: Article 4(1)

text: (a) of which gives the ECB the exclusive task of authorising credit institutions and withdrawing authorisations of credit institutions. In accordance with

text: Article 6(4) of Regulation (EU) No 1024/2013

text: , the ECB exercises this responsibility in respect of both significant and less significant institutions. This task is exercised for all banking activities listed in Annex I of Directive

text: of the European Parliament and of the Council as well as for any additional activity allowed under national law . 3.2 The ECB wishes to draw the consulting authority’s attention to the allocation of competences between the ECB, in its capacity as microprudential supervisor, and the national competent authorities (NCAs) specifically with regard to the issuance of covered bonds as well as the necessity to ensure that this allocation is not affected by the draft law. 3.3 The ECB has previously opined on the allocation of competences between the ECB and the NCAs , noting that

text: Directive (EU) 2019/2162

text: makes provision for the supervision of covered bonds by the NCAs and that this product supervision is distinct from and without prejudice to the ECB’s prudential supervisory tasks under

text: Regulation (EU) No 1024/2013

text: and, in particular, does not affect the ECB’s exclusive task of authorising credit institutions and withdrawing authorisations of credit institutions, which may, depending on the national legal framework, include a general authorisation to issue covered bonds. Similarly, the ECB remains competent to ensure that the prudential risks arising from covered bond issuances as well as investments in covered bonds are adequately managed and assessed by credit institutions. The ECB has also previously noted that any possible authorisation for a specific covered bond programme or supervision of covered bonds as a financial product would be considered as a product-specific regulation and, as such, to fall under the supervision of a national competent authority. 3.4 As is the case in various other Member States within the Single Supervisory Mechanism (SSM), in Finland a general banking licence does not include authorisation to issue covered bonds. A specific authorisation is required, which takes the form of an extension to the general banking licence . 3.5 The draft law implements

text: Article 19 of Directive (EU) 2019/2162

text: , which requires permission for a covered bond programme to be obtained before issuing covered bonds under it, and introduces licensing requirements for issuance of covered bonds. 3.6 For mortgage banks specifically, paragraph 8 of the draft law is clear that the mortgage bank licence, as a ‘general’ licence, also covers permission to issue covered bonds. As in other Member States within the SSM where the activity of issuing covered bonds is covered by a general banking licence,

text: the granting of such a general licence falls within the ECB’s competence, without entailing any shift of competences between the ECB and the NCAs, as noted in paragraph 3.2 . 3.7 However, as regards the new type of licensing requirements for credit institutions and deposit banks (i.e. those other than mortgage banks) the part of the explanatory memorandum that addresses paragraph 9 of the draft law states that ‘an extension of the authorisation of a credit institution to mortgage banking activities, as it currently stands, would be replaced by an authorisation procedure for the issue of covered bonds, in which the authorisation authority would always be the financial supervisory authority, irrespective of whether the credit institution is directly supervised by the European Central Bank or not’ . 3.8 The ECB understands that the requirement for Finanssivalvonta (FIN-FSA, Financial Supervisory Authority) to grant an authorisation is intended to implement

text: Article 19 of Directive (EU) 2019/2162

text: . It highlights, however, that any power granted to FIN-FSA should be without prejudice to the ECB’s exclusive task of authorising credit institutions and withdrawing authorisations of credit institutions under

text: Article 4(1)

text: (a) of

text: Regulation (EU) No 1024/2013

text: , as noted in paragraphs 3.2 and 3.4. 3.9 The ECB would therefore suggest revisiting the explanatory memorandum and the draft legislation based on the above clarification on the delineation of competences between the ECB and the NCAs. It should be clarified that the task of assessing the prudential aspects of an authorisation of an entity that wishes to engage in issuance of covered bonds remains with the ECB also in relation to credit institutions and deposit banks. Although the abovementioned provisions of the draft law refer to the Financial Supervisory Authority in respect of authorisation to issue covered bonds within the meaning of

text: Article 19 of Directive (EU) 2019/2162

text: , it should be clarified that this competence cannot replace the ECB’s prudential assessment, as explained above. Finally, the ECB notes that it is up to the national legislator to decide whether a two-step authorisation process regarding the activity of issuing covered bonds is necessary or whether the general authorisation to engage in the issuance of covered bonds should be integrated into the general banking licence.

text: Done at Frankfurt am Main, 11 August 2021.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE