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

text: See Article 1 of the draft law. See explanatory memorandum to the draft law, p. 1.

text: See Article 25 of the draft law.

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

text: Article 4(1)

text: (1) of the Law on banking of 29 August 1997 (consolidated text: Dziennik Ustaw (Dz.U.) of 12 June 2002 No 72, Item 665, as amended). The term ‘bank’ covers credit institutions registered in Poland, excluding Polish credit unions operating pursuant to the Law of 14 December 1995 on cooperative savings and loan associations (Dz. U. of 4 January 1996 No 1, Item 2). The term ‘credit institutions’ as used in Polish law only relates to European Economic Area (EEA) credit institutions from outside Poland. Non-EEA credit institutions are

text: Article 2(1)

text: (5) of the Law of 22 May 2003 on insurance activities (Dz. U. No 124, item 1151, as amended). 6 See

text: Article 1(1)

text: and

text: Articles 3

text: to 13 of the draft law. 7 In cases where a maximum of 50% of the total amount of issue has been acquired by other investors, the State Treasury will acquire the shares, bonds or debt instruments which were not acquired by other investors. Alternatively, in cases where other investors have acquired more than 50% of the total, the State Treasury will purchase additional bonds or debt securities issued by the financial institutions in the value of the difference between the guaranteed amount and the total value of shares acquired by other investors. See

text: Article 5(1)

text: and (2) of the draft law. 8 See Articles 3(1), 4(1) and 6(1) of the draft law. 9 An issue of bonds or bank debt securities may only be covered by a State recapitalisation guarantee if the issue fulfils the criteria for subordinated debt. The amount of the State recapitalisation guarantee may not exceed the amount of increase of the financial institution’s own funds, as provided for in the rehabilitation plan; see Article 4 of the draft law. 10 See Articles 11 and 12 of the draft law. 11 See Article 6(5) of the draft law. 12 See Article 8 of the draft law.

text: See Article 9(1) of the draft law. 14 See Article 14(1) of the draft law. 15 See Article 14(1) of the draft law. 16 See Article 14(9) of the draft law. 17 This law, as adopted by the Parliament on 12 February 2009 and signed by the President on 25 February 2009, provides for the following measures: a State guarantee for repayment of a refinancing loan extended to a bank by NBP or of a credit facility or loan provided within a line of credit extended by a bank to another bank, loans of Treasury securities to financial institutions and preferential sales of Treasury securities to financial institutions. 18 ECB Opinion

text: of 28 November 2008 at the request of the Polish Minister of Finance on a draft law on the provision of State Treasury support to financial institutions. 19 See in particular the ECB opinions listed in footnote 29 below. 20 According to these principles: (a) interventions should be timely and the support should in principle be temporary; (b) the interests of taxpayers should be protected; (c) existing shareholders should bear the due consequences of the intervention; (d) the Government should be in a position to bring about a change of management; (e) management should not retain undue benefits; (f) governments may have, inter alia, the power to intervene in remuneration; (g) legitimate interests of competitors must be protected, in particular through the State aid rules; and (h) negative spillover effects should be avoided. 21 Available on the website of the French Presidency at www.ue2008.fr.

text: See also paragraph 2.2 of ECB Opinion

text: of 1 December 2008 at the request of the Hungarian Ministry of Finance on a draft law on strengthening the financial intermediary system. 23 See paragraph 2.1 of ECB Opinion

text: . 24 See the ‘Communication from the Commission – The application of State aid rules to measures taken in relation to financial institutions in the context of the current global financial crisis’ of 13 October 2008, OJ C 270, 25.10.2008, p. 8 (hereinafter the ‘Commission’s communication on rescue measures’), in particular its Section 4 (Recapitalisation of financial institutions). See also the following: (a) paragraph 3.8 of ECB Opinion

text: of 13 November 2008 at the request of the Finnish Ministry of Finance on a draft government proposal for laws amending the Law on the Government Guarantee Fund and the Law on credit institutions; (b) paragraph 3.1.3 of ECB Opinion

text: of 8 January 2009 at the request of the Slovenian Ministry of Finance on a draft decree laying down criteria and conditions for the implementation of State capital investments and for the conversion of State claims into capital shares under

text: Article 81

text: .a of the Law on public finance; and (c) paragraph 3.3 of ECB Opinion

text: of 26 January 2009 at the request of the Danish Ministry of Economic and Business Affairs on a proposal for a Law on State investments in credit institutions and a proposal for a Law amending the Law on financial stability. 25 ‘Communication from the Commission – The recapitalisation of financial institutions in the current financial crisis: limitations of aid to the minimum necessary and safeguards against undue distortions of competition’, OJ C 10, 15.1.2009, p. 2 (hereinafter the ‘Commission’s communication on recapitalisation measures’). 26 OJ L 332 , 31.12.1993, p. 1. 27 See paragraph 3.3 of ECB Opinion

text: of 27 November 2008 at the request of the Greek Ministry of Economy and Finance on a draft law on enhancing liquidity of the economy to address the impact of the international financial crisis and on a draft decision on its implementation. Also paragraph 3.10 of ECB Opinion

text: and paragraphs 3.2.2 and 3.2.3 of paragraph 3.1.3 of ECB Opinion

text: See the Commission’s communication on rescue measures, paragraph 18 of which specifies that ‘The eligibility criteria of financial institutions … must be objective, taking due account of their role in the relevant banking system and the overall economy, and non-discriminatory so as to avoid undue distortive effects on neighbouring markets and the internal market as a whole. In application of the principle of non discrimination on the grounds of nationality, all institutions incorporated in the Member State concerned, including subsidiaries, and with significant activities in that Member State should be covered by the scheme’. See also paragraph 3.1 of ECB Opinion

text: and paragraph 3.1 of ECB Opinion

text: . 29 See ECB Opinion

text: of 3 October 2008 at the request of the Irish Minister for Finance on a draft Credit Institutions (Financial Support) Bill 2008; ECB Opinion

text: of 17 October 2008 at the request of the Danish Ministry of Economic and Business Affairs on a proposed Law on financial stability; ECB Opinion

text: of 20 October 2008 at the request of the Austrian Ministry of Finance on draft legal measures to ensure the stability of the Austrian financial market; ECB Opinion

text: of 23 October 2008 at the request of the Banca d’Italia on behalf of the Italian Ministry for Economic Affairs and Finance on two Decree-Laws containing urgent measures to guarantee the stability of the banking system and the continuity of the provision of credit; ECB Opinion

text: of 24 November 2008 at the request of the Finnish Ministry of Finance on a draft law on state capital investment in deposit banks; ECB Opinion

text: ; ECB Opinion

text: ; ECB Opinion

text: ; ECB Opinion

text: ; ECB Opinion

text: of 9 February 2009 at the request of the Latvian Ministry of Finance on a draft regulation on fair compensation granted to a bank or its shareholders; and ECB Opinion

text: of 25 February 2009 at the request of the Irish Minister for Finance on a draft National Pensions Reserve Fund (Amendment) and Miscellaneous Provisions Bill 2009. 30 See Recommendations of the Governing Council of the European Central Bank on the pricing of recapitalisations of 20 November 2008, as published on 19 December 2008 on the ECB’s website at www.ecb.europa.eu (section ‘Publications’) (hereinafter the ‘Recommendations’).

text: See e.g. paragraph 3.1.3 of ECB Opinion

text: , paragraph 3.3 of ECB Opinion

text: and paragraph 3.1.3 of ECB Opinion

text: See Article 14(9) of the draft law. 33 See Article 25 of the draft law. 34 See the Commission’s communication on recapitalisation measures, paragraph 19 of which specifies that ‘…pricing conditions should provide an incentive for the bank to redeem the State as soon as the crisis is over’. See also paragraph 7 of the Recommendations and paragraph 3.2 of ECB Opinion

text: . 35 One possible way of achieving this effect would be amend the list of required elements in the guarantee agreement specified in Article 6(5) of the draft law to include a clause enabling compulsory redemption of shares held by the State Treasury, as provided for under Article 359 of the Code of Commercial Companies of 15 September 2000 (Dz.U. of 8 November 2000 No 94, item 1037, as amended). 36 See statement in the Declaration that ‘… In all cases, these actions will be designed in order to avoid any distortion in the level playing-field and possible abuse at the expense of non beneficiaries of these arrangements. As a consequence the scheme will be limited in amount, temporary (emphasis is ours) and will be applied under close scrutiny of financial authorities …’. See also Commission’s communication on rescue measures, paragraph 24.

title: Opinion of the European Central Bank of 9 March 2009 at the request of the Polish Minister for Finance on a draft law on recapitalisation of certain financial institutions (CON/2009/19)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 9 March 2009 at the request of the Polish Minister for Finance on a draft law on recapitalisation of certain financial institutions (

text: ) Introduction and legal basis

text: On 19 February 2009 the European Central Bank (ECB) received a request from the Polish Minister for Finance for an opinion on a draft law on the recapitalisation of certain financial institutions (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the sixth indent of

text: Article 2(1) of Council Decision 98/415/EC of 29 June 1998

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

text: 1. Purpose of the draft law

text: 1.1 The draft law provides for public intervention instruments to address potential liquidity or solvency difficulties that may arise in the financial market by way of enabling public authorities to: (i) provide a State guarantee to market-initiated recapitalisation operations (hereinafter a ‘State recapitalisation guarantee’); and (ii) initiate compulsory State takeovers of a distressed financial institution (hereinafter a ‘compulsory State takeover’) . The measures provided for in the draft law may be adopted until 31 December 2010 in relation to two categories of financial institutions 4 5 established in Poland: domestic banks and domestic insurance companies , excluding mutual

text: insurance associations. They will complement other measures, which will be introduced on the basis of the Law on State Treasury support to financial institutions (hereinafter the ‘Law on State support’). 1.2 Specifically, the draft law will enable the Minister for Finance to provide State Treasury guarantees facilitating recapitalisation by market entities of distressed financial institutions in relation to which rehabilitation proceedings have been initiated . Such State recapitalisation guarantees will result in the State Treasury acquiring shares, bonds or other debt instruments issued by the recapitalised financial institution in cases where such instruments are not acquired by market entities (existing shareholders or third persons) . The Minister for Finance will issue State recapitalisation guarantees under the following cumulative conditions: (a) on application by the financial institution and by way of an agreement with the institution concluded after consultation with the Financial Supervision Commission (FSC) and the President of Narodowy Bank Polski (NBP); (b) on approval by the FSC of the relevant rehabilitation plan ; and (c) subject to certain statutory limitations as to the scope and amount of the guarantees . The provision of a guarantee will be remunerated by way of commission charged to the recapitalised financial institution, the amount of which will be determined in accordance with the rules specified in the draft law and the implementing provisions to be adopted by the Minister for Finance . 1.3 According to conditions linked to the provision of State recapitalisation guarantees, the guarantee agreement will also determine, inter alia, the power of the Minister for Finance to appoint members of the recapitalised financial institution’s bodies and the Minister’s influence on the financial policy of such institution, as well as limitations on the remuneration that the institution may offer to its management . Where a State recapitalisation guarantee is exercised, i.e. if the State Treasury acquires financial instruments issued by the recapitalised financial institution, the FSC may, acting on a request of the Minister for Finance, appoint a guardian to oversee the realisation of the rehabilitation plan . Furthermore, in the event of a breach of the conditions of a State recapitalisation guarantee, the State Treasury may demand the redemption of its holdings of financial instruments issued by the recapitalised financial institution and/or apply to the FSC to

text: place the institution under compulsory administration, or carry out a compulsory State takeover of the institution . 1.4 Finally, the draft law permits a compulsory takeover of a distressed financial institution by the State Treasury if there is a threat to the solvency of a financial institution and such takeover is justified on the grounds of financial system stability . A compulsory State takeover requires the adoption of a decision by the Council of Ministers following consultation with the FSC and the President of the NBP . The State Treasury has to dispose of the shares it has acquired as a result of a takeover once financial stability is restored, and in any event no later than within three years of their acquisition with up to two additional extensions of one year each being possible .

text: 2. General observations

text: 2.1 The ECB notes that the draft law is the second Polish law providing for State intervention in the financial sector to mitigate the current financial turmoil alongside the Law on State support , and therefore reminds the consulting authority of the statements expressed in ECB Opinion

text: on the Law on State support and in its other recent opinions on draft national laws in other Member States relating to emergency measures . The ECB also notes that the common principles to guide State actions have been highlighted in the conclusions adopted at the Ecofin meeting on 7 October 2008 . On 12 October 2008 the Heads of State of the euro area issued a ‘Declaration on a concerted European action plan of the euro area countries’ (hereinafter the ‘Declaration’), in which they agreed on common principles to be followed by the EU and euro area governments, central banks and supervisors to avoid national measures adversely affecting the functioning of the single market and other Member States. This coordinated approach includes initiatives aimed at ensuring appropriate liquidity, facilitating the funding of banks by various means, providing additional capital resources to financial institutions and recapitalising distressed banks. The European Council endorsed these principles for all Member States on

text: 16 October 2008 . The ECB notes that coordination of national measures is already taking place at

text: European and international level .

text: 2.2 Concerning the issue of the application of State aid rules to measures taken by the Member States

text: in connection with financial institutions in the context of the ongoing financial crisis, the ECB also

text: draws the consulting authority’s attention to the importance of ensuring that the proposed

text: arrangements comply with the relevant Community law provisions, in particular that they avoid

text: undue distortions of competition, and with the criteria recently laid down by the Commission in its

text: guidance on compliance by financial sector support schemes with EU State aid rules , as well as

text: the subsequent Commission’s guidance specifically targeting recapitalisation measures .

text: 2.3 The ECB notes that under the draft law the Ministry of Finance proposes to consult the President of

text: NBP prior to deciding to support a domestic financial institution. While appreciating the draft law’s

text: recognition of NBP’s expertise in this field, the ECB also expects that NBP’s involvement in the

text: procedure provided for in the draft law should not extend beyond the provision of advice and that it

text: of the Treaty, read in conjunction with

text: and

text: of the Treaty . In addition, it is also expected that NBP will perform these advisory tasks in

text: connection with State support measures in a manner fully compatible with its institutional and

text: financial independence, thereby safeguarding the proper performance of its tasks under the Treaty

text: and the Statute of the European System of Central Banks and of the European Central Bank .

text: 3. Specific observations

text: 3.1 Eligibility for support and takeover measures

text: The ECB understands that subsidiaries of foreign financial institutions are included in the scope of

text: from the measures provided for by the draft law. This is in line with the Commission’s guidance on

text: compliance by the financial sector support schemes with State aid rules . The ECB welcomes the

text: above provision, as it avoids distortion of the level playing-field for domestic financial institutions

text: and subsidiaries of foreign institutions.

text: 3.2 The draft law and coordination of the policy of the Member States

text: In line with the Declaration, Member States have to act in a coordinated manner to avoid the risk of

text: significant differences in national implementation creating distortions in global banking markets.

text: The euro area Heads of State also acknowledged the need to work in cooperation with the ECB so

text: as to ensure consistency with the management of liquidity by the Eurosystem and compatibility

text: with the operational framework of the Eurosystem. In this respect, the ECB emphasises that

text: uncoordinated decisions among Member States should be avoided as they may lead to significant

text: differences in the treatment of financial institutions between Member States. This remark also

text: applies to measures relating to state capital investments.

text: 3.3 Conditions for State capital investments

text: The ECB takes the opportunity to reiterate the points made in its previous opinions regarding

text: recapitalisations , as also subsequently published in a separate document . In this respect the ECB

text: notes that the recapitalisation measures considered in Member States should be aimed at

text: strengthening the capital position of fundamentally sound financial institutions in order to improve

text: the functioning and stability of the banking system and to ensure the proper financing of the

text: economy. In particular, a consistent approach should be adopted in defining the conditions for recapitalisations and the pricing of the instruments intended to provide Tier 1 capital to financial institutions. The ECB underlines the importance of appropriate pricing for recapitalisations in terms of the goals of enhancing the stability of the financial system, facilitating a return to normal market conditions and ensuring the proper financing of the economy. The ECB also highlights that the pricing conditions for capital support should be risk-based and market-oriented, determined by taking into consideration the specific risk of both the specific instrument chosen for injecting capital and the institution concerned. Specific features of the instruments for capital injections, such as preference shares, should be appropriately chosen so that, while encouraging an early end to the State’s capital support of banks, they should not result in an excessive increase in the cost of capital. 3.4 Against this background, the ECB has the following remarks. First, the ECB notes that pursuant to the draft law the State may issue guarantees in order to facilitate recapitalisation by market entities of distressed financial institutions in relation to which rehabilitation proceedings have been initiated. The ECB therefore understands that these guarantees, if activated, would lead to capital injections by the State into distressed financial institutions. In this respect, the ECB underlines that, according to the Recommendations and in line with paragraph 9 of the Declaration, the recapitalisation measures considered by Member States should be aimed at strengthening the capital position of distressed but fundamentally sound financial institutions. 3.5 Second, as regards the pricing of State recapitalisation guarantees, the ECB reminds the consulting authority that it is crucial to ensure a level playing-field for the harmonisation of the price determination of such guarantees within the euro area and the EU; moreover, that the price of a State recapitalisation guarantee is risk-based and market-oriented and determined on the basis of the costs of a corresponding guarantee in the market. In this context, the ECB welcomes Articles 11 and 12 of the draft law and the implementing provisions to be adopted by the Minister for Finance, which make the applicable commission dependent, inter alia, on the beneficiary’s risk rating. 3.6 Third, the ECB also reminds the Polish authorities that beneficiary financial institutions may not profit from undue use of their guaranteed status to engage in a heightened level of activities that distort the market. In this regard, the ECB reiterates the importance of establishing appropriate safeguards such as limits on the marketing of financial products or on the expansion of activities on the basis of State guarantees. 3.7 Fourth, in line with the Declaration, the ECB also emphasises that harmonisation regarding the expiry of national financial support schemes across the EU is crucial, as application of such schemes is aimed at restoring normal market conditions. In this context, reiterating its position taken in previous opinions , the ECB welcomes the fact that the draft law expressly provides that

text: the State’s participation in financial institutions resulting from a compulsory State takeover is temporary and that the State’s role as a shareholder is limited both on the basis of a period of time and the development of market conditions . The ECB also welcomes the introduction of a precise deadline, 31 December 2010, for the issuance of State recapitalisation guarantees and carrying out compulsory State takeovers . In this context, the ECB suggests introducing a more precise reference to issuance of State recapitalisation guarantees in Article 25 of the draft law by extending the reference to

text: Article 3(1)

text: in conjunction with

text: Article 4(1)

text: . In contrast, it appears from the draft law that once State recapitalisation guarantees are exercised, the related capital injection by the State into the financial institutions is not intended to be a temporary measure that would only remain in force for the duration of the present crisis or until a given point in time in the future. In this respect, the ECB suggests introducing limitations on State ownership of shares acquired as a result of exercising the recapitalisation guarantee pursuant to Article 5(1) of the draft law, which are similar to those applicable to shares acquired by the State in result of a compulsory State takeover pursuant to Article 14 of the draft law. In this context, the ECB notes that the step-up clause in Article 7(3) of the draft law regarding dividends paid on preferred shares of the State Treasury provides an incentive for the issuer to redeem the shares acquired by the State Treasury as soon as possible . However, for such a step-up clause to be fully effective, a specific provision in the articles of association of the financial institution in question would be necessary to enable it to redeem such shares at its own discretion if the capital injection provided by the State Treasury is no longer needed . The ECB notes that in this regard, by establishing such an open-ended scheme, the draft law is not fully in line with the Declaration, which clearly draws attention to the need for any domestic support schemes and for the legal framework that provides for them to be temporary in nature, even if these can be extended or renewed . 3.8 Technical remarks The ECB points to a possible omission in Article 15(2) of the draft law, which applies some effects of placing the financial institution under compulsory administration only to bodies of a bank. It seems that insurance companies are also intended to be covered by this provision. For reasons of

text: clarity the ECB therefore suggests replacing the references to ‘bank’ in

text: Article 15(2)

text: by references to ‘financial institution’. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 9 March 2009. [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


text: OJ L 189, 3.7.1998, p. 42. 2 Reg. No 66/2000, Official Gazette of the Republic, 3.3.2000, Annex III (Part I), p. 241. 3 Reg. No 40/2000, Official Government Gazette of the Republic, 25.2.2000, Annex III (Part I), p. 203.

text: See, e.g., paragraph 2.2 of ECB Opinion

text: of 17 October 2008 at the request of the Greek Ministry of Economy and Finance on a draft law on, inter alia, the establishment of the ‘Depositors and Investors of Credit Institutions Compensation Fund’; paragraph 2.1 of ECB Opinion

text: of 28 October 2008 at the request of the Belgian Minister for Finance on a draft royal decree implementing the Law of 15 October 2008 on measures promoting financial stability (title shortened); and paragraph 2.1 of ECB Opinion

text: of 17 November 2008 at the request of the Irish Minister for Finance on a draft Financial Services (Deposit Guarantee Scheme) Bill 2008. 5 The Ecofin Council agreed that ‘all Member States would, for an initial period of at least one year, provide depositguarantee protection for individuals for an amount of at least EUR 50 000, acknowledging that many Member States determine to raise their minimum protected amount to EUR 100 000’. See the Press Release for this meeting (13784/08), available on the Council’s website at www.consilium.europa.eu. 6 Not yet published in the Official Journal. For a summary of the salient points of this Directive see ‘The Council strengthens depositor protection’, Press Release, Brussels, 26 February 2009 No 6983/09, available on the Council’s website at www.consilium.europa.eu. 7 See, e.g., paragraph 2.2 of ECB Opinion

text: of 18 November 2008 at the request of the Council of the European Union on a proposal for a Directive of the European Parliament and of the Council amending Directive

text: on Deposit-Guarantee Schemes as regards the coverage level and the payout delay. 8 See Opinion

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 10 March 2009 at the request of the Central Bank of Cyprus and of the Cypriot Authority for the Supervision and Development of Cooperative Societies on certain draft regulations related to the Deposit Protection Scheme (CON/2009/20)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 10 March 2009 at the request of the Central Bank of Cyprus and of the Cypriot Authority for the Supervision and Development of Cooperative Societies on certain draft regulations related to the Deposit Protection Scheme (

text: ) Introduction and legal basis

type: rubrik

text: On 13 February 2009 the European Central Bank (ECB) received a request from the Central Bank of Cyprus for an opinion on draft regulations amending the Establishment and Operation of a Deposit Protection Scheme Regulations of 2000 to 2006 and on 23 February 2009 the ECB received a request from the Cypriot Authority for the Supervision and Development of Cooperative Societies for an opinion on draft regulations amending the Establishment and Operation of the Deposit Protection Scheme Regulations of 2000 to 2004 (hereinafter the ‘draft regulations’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the third and sixth indents of

text: Article 2(1) of Council Decision 98/415/EC of 29 June 1998

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

type: stycke

text: 1. Purpose of the draft regulations

text: The draft regulations will amend the Establishment and Operation of a Deposit Protection Scheme Regulations of 2000 to 2006 and the Establishment and Operation of the Deposit Guarantee Scheme Regulations of 2000 to 2004 , establishing two separate schemes for the benefit of the clients of Cypriot banks and cooperative credit institutions (CCIs), respectively. As a result, in both cases, the deposit guarantee and deposit protection schemes will be amended so that: (i) statutory deposit protection coverage will be raised from EUR 20 000 to EUR 100 000; (ii) the payout delay will be reduced from

text: three months to 20 working days; (iii) the co-insurance requirement resulting in depositors bearing 10 % of the loss up to the statutory deposit protection level will be eliminated; (iv) coverage will be expanded to include deposits denominated in all currencies; and (v) the deposit guarantee and deposit protection schemes will be reinforced through a progressive increase in its basic capital. The latter may be achieved by increasing the initial contribution from the banks and CCIs, by raising the maximum amount of required special and/or supplementary contributions, and/or by abolishing the maximum limit on the amount that the Management Committee may borrow.

text: 2. ECB observations

text: 2.1 In line with its previous opinions , the ECB welcomes the proposed increase in the total amount of protected deposits in accordance with the conclusions of the Ecofin Council of 7 October 2008 and the Directive of the European Parliament and of the Council amending Directive

text: on Deposit Guarantee Schemes as regards the coverage level and the payout delay (hereinafter the ‘amending Directive’) . The ECB also notes that the guaranteed amount under the two schemes is identical and that this will help to avoid distortions in the national financial system. The ECB takes this opportunity to reiterate that Member States, when implementing the above-mentioned amending Directive, should act in a coordinated manner to avoid significant differences in national implementation measures from having a counterproductive effect by creating distortions in global banking markets. 2.2 Reducing delays in payouts of guaranteed deposits can strengthen depositor confidence, which plays a key role in the effectiveness of deposit protection schemes . At the same time, it is essential that a pragmatic approach be taken to introducing the necessary reduction in payout delays, thereby preserving credibility of the deposit guarantee schemes . Finally, attention should be drawn to the importance of establishing efficient operational processes for verifying claims and reimbursing depositors, as well as ensuring that sufficient sources of funding are available.

text: This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 10 March 2009. [signed]

text: The President of the ECB

text: Jean-Claude TRICHET

type: vagledning

utgivare: ecb


text: OJ L 189, 3.7.1998, p. 42. 2 See ECB Opinion

text: of 22 February 2006 at the request of the Cypriot Ministry of Finance on a draft law amending the Cyprus Securities and Stock Exchange (Central Depository and Central Securities Registry) Laws of 1996 to 2005 and ECB Opinion

text: of 11 July 2006 at the request of the Cypriot Ministry of Finance on two draft regulatory decisions issued by the Cyprus Stock Exchange Council. 3 See paragraphs 4.1 and 5.2 of ECB Opinion

text: , and paragraphs 3.3 and 3.5 of ECB Opinion

text: . 4 On the issue of the competences of the CSE Council and of the nature of its rule-making powers see, in particular, paragraphs 1.2, 3.1 and 4.1 of ECB Opinion

text: The only express references to liability-related issues are to be found in: (i) Section 17A of the Basic Law, which excludes the liability of the CSE’s Director General vis-à-vis any affected party/ies where the Director General has intervened to correct mistaken entries in the CDCR Register, provided that they have acted in good faith; and (ii) Regulations 16(3) and 16(4) of the Securities and Stock Exchange (Registration, Trading and Settlement of Dematerialised Securities) Regulations of 2001 to 2005, excluding the liability of the Director or of the CSE vis-à-vis CSE Members or third parties where the Director has taken measures (or desisted from so doing) with a view to completing the clearing and settlement of a transaction over listed securities or their delivery where the competent CSE Member has failed to fulfil its relevant obligations. 6 See the Civil Wrongs Law (Cap. 148, as amended). 7 Directive

text: of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems, OJ L 166, 11.6.1998, p. 45. 8 Settlement Finality in Payment Systems and Securities Settlement Systems Law of 2003.

title: Opinion of the European Central Bank of 16 March 2009 at the request of the Cypriot Ministry of Finance on a draft law amending the Securities and Cyprus Stock Exchange (Central Depository and Central Securities Registry) Laws of 1996 to 2008 (CON/2009/21)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 16 March 2009 at the request of the Cypriot Ministry of Finance on a draft law amending the Securities and Cyprus Stock Exchange (Central Depository and Central Securities Registry) Laws of 1996 to 2008 (

text: ) Introduction and legal basis

text: On 20 February 2009, the European Central Bank (ECB) received a request from the Cypriot Ministry of Finance for an opinion on a draft law amending the Securities and Cyprus Stock Exchange (Central Securities Depository and Central Registry) Laws of 1996 to 2008 (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and on the fifth indent of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to payment and settlement systems. 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 ECB understands that the purpose of the draft law is to accommodate specific comments of the ECB made in two of its previous opinions on draft legal acts of relevance to the Cyprus Stock Exchange (CSE) and/or to the CSE’s Central Depository and Central Securities Registry (CDCR) . In particular, and in line with recommendations previously made by the ECB , the draft law proposes amendments to Sections 3 and 6 of the Securities and Cyprus Stock Exchange (Central Depository and Central Securities Registry) Laws of 1996 to 2008 (hereinafter the ‘Basic Law’), which is intended to limit the scope of the CSE Council’s decision-making powers to technical issues only , thereby avoiding the risk of any undue

text: interference with settlement finality-related issues, and to clarify the scope of the CSE’s liability vis-à-vis its clients arising from the operation of the CDCR and with regard to the correct recording of stock exchange data and/or transactions. Subject to its observations below, the ECB is pleased to note the consulting authority’s initiative to address expressly the abovementioned outstanding issues.

text: 2. Specific observations

text: 2.1 Observations on the proposed amendments to Section 6 of the Basic Law 2.1.1 The ECB understands that the objective of the proposed amendments to Section 6 of the Basic Law is to remove any remaining doubts as to the extent of the liability of the CSE Council arising from the operation of the CDCR. At present, subject to certain exceptions , the CSE’s liability is not the subject of comprehensive statutory regulation, either in the Basic Law or in the CSE Regulations. To the extent the proposed amendments to Section 6 would confirm that the CSE, in its capacity of owner and operator of the CDCR, is subject to the general principles of the law of tort in Cyprus (astika adikimata) , whether by way of an action for negligence in the exercise of a statutory power or, alternatively, for breach of statutory duty giving rise to a private, civil cause of action, the ECB has no comments on the overall thrust of the proposed amendments to Section 6. 2.2 Observations on the proposed amendments to Section 3 of the Basic Law 2.2.1 The ECB has the following comments on Section 3 of the Basic Law, which currently provides that the CSE has the power to ‘establish, manage and operate’ the CDCR, as specified in the Basic Law and the Regulations and/or Regulatory Decisions issued thereunder. In line with the ECB’s previous opinions and having regard to the implementation of the Settlement Finality Directive (SFD) , Section 3 of the Basic Law would benefit from clarification to the effect that the CSE’s decision-making powers relate to technical issues only, to be defined within the boundaries of the clearing and settlement framework laid down by national legislation. Moreover, and despite the fact that Sections 17A and 24 of the Basic Law already refer to the national implementation of the SFD , the proposed amendments to Section 3 do not, in the ECB’s view, go far enough towards addressing unequivocally the concerns previously expressed by the ECB in its opinions. As the differences between Section 3, as it currently stands, and a revised Section 3 would only be very slight and would require deductions to be made in order for conclusions to be drawn regarding the

text: limits to the CSE Council’s rule-making powers, the ECB would invite the consulting authority to reflect more expressly in the draft law itself the objectives conveyed in its accompanying explanatory note. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 16 March 2009 [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


title: Opinion of the European Central Bank of 16 March 2009 at the request of the Polish Minister for Finance on a draft law amending the Law on guarantees and endorsements granted by the Treasury and certain legal persons, the Law on Bank Gospodarstwa Krajowego and certain other laws (CON/2009/22)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 16 March 2009 at the request of the Polish Minister for Finance on a draft law amending the Law on guarantees and endorsements granted by the Treasury and certain legal persons, the Law on Bank Gospodarstwa Krajowego and certain other laws (

text: ) Introduction and legal basis

text: On 18 February 2009 the European Central Bank (ECB) received a request from the Polish Minister for Finance for an opinion on a draft law (hereinafter ‘the draft law’) amending the Law of 14 March 2003 on Bank Gospodarstwa Krajowego (hereinafter the ‘Law on BGK’) . The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the sixth indent of

text: Article 2(1) of Council Decision 98/415/EC of 29 June 1998

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

text: 1. Purpose of the draft law

text: 1.1 Bank Gospodarstwa Krajowego (BGK) is the only Polish credit institution established by legislation as a State bank . Its main activities include supporting the government’s socioeconomic programmes, as well as local self-government and regional development projects. Within this scope, BGK provides banking services to public entities and several public funds established for special purposes, including those established to distribute EU funds. As a specific financial

text: 1 Dz. U. of 2003, No 65, item 594.

text: 2 OJ L 189, 3.7.1998, p. 42.

text: 3 See Article 2(1) of the Law on BGK together with Article 1 of the Regulation of the President of Poland of 30 May 1924 merging the State credit institutions into Bank Gospodarstwa Krajowego (Dziennik Ustaw (Dz. U.) of 1924 No 46, item 477). See also Article 46(1) of the Law on banking of 13 April 1960 (Dz. U. of 1960 No 20, item 121) together with Article 64(2) of the Law on banking of 12 June 1975 (Dz. U. of 1975 No 20, item 108) and Article 64(2) of the Law on banking of 26 February 1982 (Dz.U. of 1982 No 7, item 56). See also Article 14(1) of the Law on banking of 29 August 1997 (consolidated text: Dz.U. of 2002 No 72, item 665) (hereinafter the ‘Law on banking’). See Regulation of the Minister for the Treasury of 27 August 2003 laying down the articles of incorporation for Bank Gospodarstwa Krajowego (Dz. U. of 2003 No 156, item 1526). institution created for public purposes, BGK is exempted from Directive

text: of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (recast) . 1.2 According to the draft law’s explanatory memorandum , the planned changes are related to ‘the need to ensure the transparency of Bank Gospodarstwa Krajowego’s operations to better perform its tasks and implement government programmes’ and aim to ‘create a legal framework within which BGK, as a State-owned bank, will conduct banking operations as part of its own operations, and at the same time support the government’s social and economic programmes, as well as local self-government and regional development programmes which are being implemented with the use of public funds’. The draft law streamlines the Law on BGK, extends the legal framework for BGK’s implementation of government programmes and winds up some special public funds, transferring their assets to BGK. Furthermore, some formal requirements applying to the BGK’s operations are relaxed. 1.3 The draft law modifies BGK’s activities. It extends support for Polish exports to also include the implementation of government programmes . It creates a new task of issuing endorsements and guarantees within the framework of carrying out government programmes, on BGK’s or the Treasury’s behalf . The draft law also allows the Minister for Finance to increase BGK’s statutory funds, by way of providing BGK with Treasury bonds issued specifically for this purpose. Their issuance will be exempt from budget limits, but their value will be included in the calculation of government debt . Furthermore, the draft law amends

text: Article 128

text: b of the Law on banking by allowing the Financial Supervision Commission to exempt BGK from some requirements of the Law on banking . Such a possibility is extended to funds provided to BGK for government programme purposes. Additional conditions are dropped, including the requirement for the separate management of such funds and exclusion of the bank’s own risk in relation to this activity. 1.4 The draft law provides for the winding up of several special public funds, including the EU Guarantee Fund and the transfer of their assets to BGK’s statutory fund . The ECB understands that this will result in a significant increase in BGK’s funds compared to the relative size of other financial institutions.

text: 4 OJ L 177, 30.6.2006, p. 1. See

text: Article 2

text: 5 Parliamentary document No 1638 of 6 February 2009, available on the lower chamber of Parliament’s website at www.sejm.gov.pl.

text: Article 2(3)

text: (a) of the draft law, introducing a new

text: Article 5(1)

text: (5) to the Law on BGK, in conjunction with Article 1(9) of the draft law, introducing a new Chapter 8a to the Law of 8 May 1997 on guarantees and endorsements granted by the Treasury and certain legal persons (Dz.U. of 2003, No 174, item 1689).

text: 9 Article 7 of the draft law.

text: Articles 15

text: to 17 and 25 of the draft law.

text: 2. General observations

text: 2.1 Since the main aim of the draft law is to improve the transparency of BGK’s operations, inter alia to better implement government programmes, the ECB understands that BGK will play a substantial role in assisting the government’s economic programmes relating to the current financial crisis. In this context, and to the extent that the broadened scope of BGK’s activities relates to the crisis, the ECB reiterates its statements expressed in its previous opinions on measures adopted in Poland to mitigate the financial turmoil and emphasises the need to provide for the temporary character of such measures to meet their aim of restoring normal market conditions. 2.2 In view of the BGK’s specific status due to its public sector role and its exemption from Directive

text: , the ECB underlines the need to maintain a level playing field and avoid undue distortions of competition between financial institutions as a result of increasing BGK’s statutory funds and broadening the scope of its activities. In particular, the ECB notes that enhancing BGK’s activity on the credit market by providing additional funds and relaxing the requirements applying to its activities, including the possibility of obtaining an exemption from the requirements of the Law on banking , should not lead to the crowding out of credit provided by other credit institutions operating in the market. Furthermore, the ECB notes that the implementation of BGK’s tasks within the framework of government programmes must respect the Community rules on State aid. Appropriate safeguards, including risk management and control measures, need also to be put in place to ensure that BGK’s enhanced role does not impair the stability of the financial markets.

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

text: Done at Frankfurt am Main, 16 March 2009.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET

text: 11 See ECB Opinion

text: of 28 November 2008 at the request of the Polish Minister for Finance on a draft law on the provision of Treasury support to financial institutions and ECB Opinion

text: of 9 March 2009 at the request of the Polish Minister for Finance on a draft law on the recapitalisation of certain financial institutions.

text: Article 128

text: b of the Law on banking, as amended by Article 7 of the draft law.


title: Opinion of the European Central Bank of 17 March 2009 at the request of the Italian Ministry of Economic Affairs and Finance on a draft Ministerial decree on the management of the Treasury availability account held with the Banca d'Italia (CON/2009/23)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 17 March 2009 at the request of the Italian Ministry of Economic Affairs and Finance on a draft Ministerial decree on the management of the Treasury availability account held with the Banca d'Italia (

text: ) Introduction and legal basis

text: On 6 February 2009 the European Central Bank (ECB) received a request from the Italian Ministry of Economic Affairs and Finance (MEF) for an opinion on a draft Ministerial decree on the management of the Treasury availability account held with the Banca d'Italia (hereinafter the ‘draft decree’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the third indent of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft decree relates to the Banca d’Italia. 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 decree

text: 1.1 The draft decree contains implementing provisions required by Article 5(5) of the Law on consolidation of legislative provisions and regulations on public debt (hereinafter the ‘2003 Consolidated Law’), which regulates the Treasury availability account held with the Banca 2 3 d’Italia . Article 2(39) of the 2008 Budget Law amended

text: Article 5(5)

text: to improve the current remuneration regime, in particular in connection with the liquidity forecasts, thus facilitating the implementation of monetary policy, as also indicated in the explanatory memorandum to the draft decree.

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

text: 2 Presidential Decree No 398 of 30 December 2003 (Gazzetta Ufficiale della Repubblica italiana No 57, 9.3.2004, S.O.).

text: 3 Law No 244 of 24 December 2007 (Gazzetta Ufficiale della Repubblica italiana No 300, 28.12.2007, S.O.). 1.2 On entry into force of the 2008 Budget Law, Decree-Law No 248 suspended the application of 4 5

text: Article 2(39)

text: on the new remuneration regime , pending ECB Opinion

text: . The opinion analysed whether the proposed changes to Article 5(5) of the 2003 Consolidated Law contravene the objectives of the monetary financing prohibition under Article 101 of the Treaty. It also analysed the implications for monetary policy implementation.

text: 2. General observations

text: 2.1 The draft decree is required to implement the reform improving the remuneration regime and liquidity management. The ECB welcomes the ongoing efforts to improve the management procedures (OPTES) for deposit balances held by the MEF with the Banca d’Italia. The draft decree represents a significant improvement compared to past practices. Its scope is limited to monetary policy implementation. In the light of the stance taken in its Opinion

text: , the ECB also considers that, pending appropriate amendments to Article 5(5) of the 2003 Consolidated Law also from the point of view of the legislation’s compliance with the monetary financing prohibition, in particular with regards to the remuneration of the Treasury account, the issue remains open and the ECB's views in its past opinion remain unchanged . Given the importance of this matter, the ECB expects therefore to be consulted on any further legislative initiatives addressing remuneration, which the ECB understands are under preparation, as also announced in the last paragraph of the explanatory memorandum to the draft decree. 2.2 Article 4 of the draft decree refers to public debt management operations to be performed by the Banca d’Italia in the form of auctions, credit or debit transfers or bilateral negotiations . Taking into account the express recognition in Article 21.2 of the Statute of the European System of Central Banks and of the European Central Bank of the provision of fiscal agency services as a legitimate function traditionally performed by central banks , the ECB notes that provision by central banks of fiscal agency services should comply with the monetary financing prohibition, provided that such services remain within the field of the fiscal agency function and do not constitute central bank financing of public sector obligations vis-à-vis third parties or central bank crediting of the public

text: 4 See Article 42 of Decree-Law No 248 of 31 December 2007 containing provisions on the extensions of deadlines provided for by law and urgent measures in financial matters, converted into Law No 31 of 28 February 2008 (Gazzetta Ufficiale della Repubblica italiana No 51, 29.2.2008, S.O.).

text: 5 ECB Opinion

text: of 21 February 2008 at the request of the Italian Ministry of Economic Affairs and Finance on some provisions of the Law on the State annual and pluriannual budget (2008 Budget Law).

text: 6 See paragraph 3.4 of ECB Opinion

text: 8 See the ECB’s Convergence Report of May 2008, p. 24, stating that ‘The purpose of Article 21.2 of the Statute was to enable NCBs, following transfer of the monetary policy competence to the Eurosystem, to continue to conduct the fiscal agent service traditionally provided by central banks to governments and other public entities without automatically breaching the monetary financing prohibition.’

text: 9 I.e. one of the prohibited forms of monetary financing; see

text: Article 1(1)

text: (b)(ii) of

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

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

text: Articles 104

text: [now 101] and 104b(1) [now 103(1)] of the Treaty (OJ L 332, 31.12.1993, p. 1). See the ECB’s Convergence Report of May 2008, p. 233, which states with reference to the provision by Česká národní banka of administrative and financial support to the sector outside the narrowly defined exceptions specified in

text: Regulation (EC) No 3603/93

text: . Against this background, the ECB trusts that the tasks assigned to the Banca d’Italia under the draft decree will be performed in compliance with the prohibition on monetary financing laid down in Article 101 of the Treaty and

text: Regulation (EC) No 3603/93

text: 3. Specific observations

text: 3.1 OPTES procedures 3.1.1 In its Opinion

text: , the ECB, in supporting any attempt to reduce forecasting errors in liquidity management, generally welcomed the draft 2008 Budget Law in so far as it attempted to make the forecasts of government deposits at the Banca d’Italia more reliable, given the particular nature of the management procedures (OPTES) for government deposits in Italy. Therefore, it urged the Italian government to implement the proposed reform as soon as possible . Moreover, the ECB indicated that, without knowing in detail the rules for liquidity management, which would be regulated by a later MEF decree, it was not possible to conclusively assess the future government deposit management procedures . This opinion assesses those detailed rules as laid down in the draft decree. 3.1.2 The ECB expects the resulting OPTES procedures as a relevant step to address the most immediate liquidity management weaknesses in the current OPTES scheme. This includes providing for symmetrical conduct of OPTES operations, both liquidity providing and liquidity absorbing, without the MEF’s intervention and a mechanism for steering more precisely the end-of-day balance on the availability account with a view to preventing same day forecasting errors. 3.1.3 The ECB recommends introducing quickly the remaining legal acts, as detailed below, required to define a fully functional OPTES framework. Only at that stage will a comprehensive evaluation of the framework be possible. The ECB also recommends modifying the OPTES scheme, in the medium term so that the banking system rather than the Banca d’Italia holds almost all government deposits at the end of the day. Such a scheme would not only be the most robust solution for reducing forecast errors on government deposits, but would also lead to a reduced size and fluctuations in the banking system’s refinancing needs.

text: Financial Arbitrator, an administrative body entirely independent from the central bank, ‘constitutes a form of central bank financing of the public sector’s obligations’.

text: 10 See

text: Article 4

text: (non-extendable intra-day credits),

text: Article 5

text: (crediting, under specified conditions, the public sector’s account with cheques issued by third parties) and

text: Article 6

text: (holding, within specified limits, coins issued by and credited to the public sector) of

text: Regulation (EC) No 3603/93

text: 11 See paragraph 3.5.1 of ECB Opinion

text: 12 See paragraph 3.5.2 of ECB Opinion

text: 13 See paragraph 3.5.3 of ECB Opinion

text: . 3.2 Implementation of monetary policy 3.2.1 The draft decree by itself is not sufficient to enable one to judge whether the measures to be implemented for the management of government deposits will reduce forecasting errors and improve overall the scheme for the management of government deposits as outlined above. The detailed rules will only be further clarified in a subsequent technical decree, as mentioned in the explanatory memorandum . Without knowing the details of this technical decree, it is not possible for the ECB to conclusively assess future government deposit procedures in Italy. 3.2.2 The ECB notes that the current draft decree further supports the changes initiated by the 2008 Budget Law, which the ECB assessed favourably in ECB Opinion

text: . In particular, the draft decree is more explicit regarding the conduct of lending operations, which once introduced could greatly improve the performance of OPTES with respect to avoiding forecasting errors and biases. 3.2.3 Article 3 of the draft decree does not prevent the MEF from still exercising discretionary influence over the Banca d’Italia’s conduct of liquidity operations under OPTES. These operations must follow an automatic procedure, which initiates transactions once the balances are above or below the forecast threshold sent to Banca d’Italia. In particular, as stated in ECB Opinion

text: , the procedures should in any event leave no scope for the liquidity operations under OPTES to be specified in accordance with interest rates. 3.2.4 The explanatory memorandum mentions that a subsequent ministerial decree, as referred to in Article 6 of the draft decree, will specify the financial assets that can be used as guarantees in the context of lending operations. The ECB urges the MEF to adopt provisions on the financial assets to be used in these operations as soon as possible to implement the changes provided for by the 2008 Budget Law which aim to reduce forecasting errors in the OPTES procedures. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 17 March 2009. [signed] The President of the ECB Jean-Claude TRICHET

text: 14 Such a decree would be similar to Ministerial Decree No 64302 of 16 June 2006, which specifies in detail the current OPTES procedures.


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

text: Law on the implementation of a package of measures to stabilise the financial market of 17 October 2008 ((2008) Bundesgesetzblatt. I p. 1982).

text: See footnote 2.

text: ECB Opinion

text: of 21 October 2008 on a Law on the implementation of a package of measures to stabilise the financial market and an order on its implementation. All ECB opinions are available on the ECB’s website at www.ecb.europa.eu.

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

text: See the Recommendations of the Governing Council of the European Central Bank on the pricing of recapitalisations issued on 20 November 2008, available on the ECB’s website at www.ecb.europa.eu. See also ECB Opinion

text: of 27 November 2008 at the request of the Greek Ministry of Economy and Finance on a draft law on enhancing liquidity of the economy to address the impact of the international financial crisis and on a draft decision on its implementation, as well as ECB Opinion

text: of 8 January 2009 at the request of the Slovenian Ministry of Finance on a draft decree laying down criteria and conditions for the implementation of State capital investments and for the conversion of State claims into capital shares under

text: Article 81

text: .a of the Law on public finance.

text: See e.g. paragraph 3.8 of ECB Opinion

text: of 13 November 2008 at the request of the Finnish Ministry of Finance on a draft government proposal for laws amending the Law on the Government Guarantee Fund and the Law on credit institutions.

text: See ‘Communication from the Commission – The application of State aid rules to measures taken in relation to financial institutions in the context of the current global financial crisis’ (OJ C 208 of 25.10.2008, p. 8). Also ‘Communication from the Commission – The recapitalisation of financial institutions in the current financial crisis: limitation of aid to the minimum necessary and safeguards against undue distortions of competition’, available on the Commission’s website at www.ec.europa.eu.

text: European Commission, N 625/2008, K (2008) 8629, available on the Commission’s website at www.ec.europa.eu.

text: European Commission, N 512/2008, K (2008) 6422, available on the Commission’s website at www.ec.europa.eu.

text: ECB Opinion

text: of 26 January 2009 at the request of the Danish Ministry of Economic and Business Affairs on a proposal for a Law on State investments in credit institutions and a proposal for a Law amending the Law on financial stability.

title: Opinion of the European Central Bank of 17 March 2009 at the request of the German Ministry of Finance on a draft law on the further stabilisation of the financial market (CON/2009/24)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 17 March 2009 at the request of the German Ministry of Finance on a draft law on the further stabilisation of the financial market (

text: ) Introduction and legal basis

text: On 10 March 2009, the European Central Bank (ECB) received a request from the German Ministry of Finance for an opinion on a draft law on the further stabilisation of the financial market (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the sixth indent of

text: Article 2(1) of Council Decision 98/415/EC of 29 June 1998

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

text: 1. Purpose of the draft law

text: 1.1 The purpose of the draft law is to make the instruments introduced by the law on financial market stabilisation in October 2008 more flexible and to provide for additional options for action. In particular, the draft law provides for an extension of the maximum maturity period for guarantees from 36 months to 60 months. Furthermore, it amends provisions of takeover and company law, in particular as regards the convening of shareholders’ meetings and amendments to the voting procedure for capital increases. 1.2 Moreover, the draft law provides for the possibility of expropriation of shares and other rights in financial sector institutions (hereinafter ‘expropriation’) and nationalisation of such institutions. Expropriation and nationalisation will be restricted to cases where there is no other solution and it is necessary to ensure the stability of the financial system. Expropriation as a stabilisation measure

text: under the draft law requires the adoption of a Federal statutory order in respect of the specific expropriation. Expropriation is subject to the payment of compensation, the nature and extent of which are to be determined in accordance with current market value, which is principally calculated based on the average stock exchange price during the two weeks before the day of the expropriation decision. The Federal Ministry of Finance may only initiate expropriation procedures before 30 June 2009 and must adopt a regulation on specific expropriations by 31 October 2009. The expropriated object needs to be reprivatised as soon as it has been stabilised.

text: 2. General observations

text: 2.1 The ECB notes that the draft law amends the law providing for State intervention in the financial sector to mitigate the current financial turmoil on which the ECB was consulted in October 2008, and accordingly reminds the consulting authority of its views expressed in its previous opinion . 2.2 In line with the ‘Declaration on a concerted European action plan of the euro area countries’ issued by the Heads of State of the euro area on 12 October 2008 (hereinafter the ‘Declaration’) , the ECB has highlighted in its opinions that close coordination at the European Union level of Government measures intended to alleviate tensions in the financial markets is of crucial importance . This coordinated approach includes initiatives aimed at ensuring appropriate liquidity, facilitating the funding of banks by various means, providing additional capital resources to financial institutions and recapitalising distressed banks. In line with the Declaration, the ECB emphasises that the support measures brought in by Member States should be temporary in nature and harmonised throughout the EU. Furthermore, and in line with previous ECB opinions , it should be ensured that such measures are in accordance with the requirements of Community competition law, in particular State aid rules, and that the State’s role as shareholder is limited in time .

text: 3. Specific observations

text: 3.1 Extension of duration of debt guarantees The ECB notes that the European Commission in its decision of 12 December 2008 approved modifications of the German rescue package for financial institutions which it had originally approved on 27 October 2008 . These approved modifications concern, inter alia, the possibility of extending the duration of debt guarantees to a maximum of five years under certain circumstances. The ECB understands that

text: Article 1

text: § 6 a) of the draft law aims at implementing this particular modification. As stated in its previous opinions , the ECB emphasises in line with the Declaration that harmonisation regarding the duration of national financial support schemes across the EU is of crucial importance. 3.2 Expropriation and the relationship with the single monetary policy of the euro area 3.2.1 In line with the Declaration, the ECB reiterates that uncoordinated decisions among Member States should be avoided as they may lead to a fragmentation of the euro area money market. The possibility for expropriation pursuant to Article 3 of the draft law raises questions as to: (a) evaluation from the point of view of a market economy; (b) its factual scope of application; (c) its temporal scope of application; (d) the pricing for compensation paid for the assets of a nationalised institution; and (e) an adequate exit strategy. In this respect, the ECB would like to make the following observations. 3.2.2 Expropriation is a severe measure with far-reaching effects on market participants. For this reason, expropriation by the State in relation to companies in distress should remain a tool for use in clearly defined and exceptional circumstances. The ECB stresses that it should be ensured that such measures are only used as a last resort, that the disturbances to the level playing-field are minimised and that the State’s role is limited in time. Due to the importance of the impact of expropriation on the credit institutions concerned and on their shareholders as well as on the market in general, it is crucial to achieve absolute legal certainty in relation to such measures. In this connection, the ECB notes that individual expropriation measures may raise Community and international private law questions due to their possible cross-border impact. 3.2.3 Concerning the factual scope of application of the proposals, the ECB notes that the draft law in

text: Article 3

text: § 1(4) no 1 limits expropriation to cases where it is ‘necessary to ensure financial market stability and other legal and commercially reasonable solutions are no longer available in the period necessary to ensure financial market stability to the same extent but in a less radical way.’ Moreover, under

text: Article 3

text: § 1(4) no 2, expropriation will only concern systemically relevant institutions, institutions for which stabilisation measures under the Fund have proved to be

text: insufficient for stabilisation and cases where the expropriating authority has previously made serious but unsuccessful endeavours to find an alternative solution. The ECB understands that these provisions effectively restrict the scope of expropriation to cases of last resort and subject it to a detailed proportionality test. 3.2.4 On the temporal scope of application, the ECB welcomes the introduction of precise deadlines in the draft law both for the decision to initiate an expropriation (30 June 2009) as well as for the adoption of a legal order by which the expropriation is effected (31 October 2009). 3.2.5 As regards the pricing of compensation, even in a case of expropriation the ECB reminds the consulting authority of the importance of pricing that reflects appropriately the goals of enhancing the stability of the financial system, facilitating a return to normal market conditions and ensuring the proper financing of the economy. In order to monitor the preservation of a level playing-field, transparency of valuation is of the essence. 3.2.6 As concerns an exit strategy, according to the explanatory memorandum to the draft law, expropriation is only meant to be temporary. The ECB understands that the draft law provides in

text: Article 3

text: § 6(2) for reprivatisation once the institution in question has been sustainably stabilised. As mentioned in previous ECB opinions, it is important to ensure that the State’s involvement is limited in time . In this respect, the ECB welcomes that the abovementioned provision already set outs different methods of reprivatisation and stipulates that former shareholders have the first right to purchase .

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

text: Done at Frankfurt am Main, 17 March 2009.

text: [signed]

text: The Vice-President of the ECB

text: Lucas D. PAPADEMOS


text: OJ L 189, 3.7.1998, p. 42. 2 See ECB Opinion

text: of 21 November 2008 at the request of the Belgian Ministry of Finance on a draft royal decree on the guarantee for certain risks assumed by financial institutions. All ECB opinions are available on the ECB website at www.ecb.europa.eu. 3 This system was established by the Royal Decree of 16 October 2008 (see ECB Opinion

text: of 17 October 2008 at the request of the Belgian Ministry of Finance on a draft royal decree adopted under

text: Article 117

text: bis of the Law of 2 August 2002 on the supervision of the financial sector and on financial services), which is based on

text: Articles 117

text: bis and 117ter of the Law of 2 August 2002 on the supervision of the financial sector and on financial services (see

text: on these provisions ECB Opinion

text: of 8 October 2008 at the request of the Belgian Ministry of Finance on a preliminary draft law on measures promoting financial stability and in particular establishing a State guarantee for the provision of credit in the context of financial stability; paragraph 2.1 of ECB Opinion

text: and paragraph 1.1 of ECB Opinion

text: of 28 October 2008 at the request of the Belgian Minister for Finance on a draft royal decree implementing the Law of 15 October 2008 on measures promoting financial stability and in particular establishing a State guarantee for the provision of credit in the context of financial stability, in relation to the protection of deposits and life insurance and amending the Law of 2 August 2002 on the supervision of the financial sector and on financial services). The draft royal decree is also based on

text: Article 117

text: bis of the Law of 2 August 2002. 4 Concerning the reasons behind the adoption of the Royal Decree of 10 December 2008, see ECB Opinion

text: , in particular paragraph 1.2. 5 The draft royal decree does not modify: (i) the list of entities whose commitments can be guaranteed, i.e. credit institutions, financial holding companies (financiële holdings/compagnies financières) or mixed financial holding companies (gemengde financiële holdings/compagnies financières mixtes), hereinafter together the ‘guaranteed entities’; (ii) the condition that these entities must take measures aimed at supporting their financial situation, solvency and liquidity, or commit to taking such measure; (iii) the requirement that the guaranteed commitments or the guarantee itself can contribute to avoiding the guaranteed entity or its subsidiaries from being exposed to a serious need for additional liquidity, due inter alia to a downgrading of their rating; and (iv) the requirement that the granting of the guarantee is justified in the interests of the Belgian economy and by the need to protect all depositors. The power granted to the Belgian Minister for Finance to determine the other detailed rules and conditions of the guarantee, including its ceiling and its price, also remain unaffected by the draft royal decree. See further ECB Opinion

text: , paragraph 1.3. 6 Article 2 of the Royal Decree of 10 December 2008; see ECB Opinion

text: , paragraph 1.3. 7 Article 1 of the draft royal decree, amending Article 2 of the Royal Decree of 10 December 2008. 8 The ECB has been consulted by the Belgian authorities on five other draft legislative provisions adopted in this context: (i) ECB Opinion

text: ; (ii) ECB Opinion

text: ; (iii) ECB Opinion

text: ; (iv) ECB Opinion

text: ; and (v) ECB Opinion

text: See the Declaration of 12 October 2008, available on the website of the French Presidency, www.ue2008.fr. 10 See the Recommendations of the Governing Council of the European Central Bank on government guarantees for bank debt, issued on 20 October 2008, available on the ECB’s website at www.ecb.europa.eu.

title: Opinion of the European Central Bank of 19 March 2008 at the request of the Belgian Ministry of Finance on a draft royal decree amending the Royal Decree of 10 December 2008 on the guarantee for certain risks assumed by financial institutions (CON/2009/25)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 19 March 2008 at the request of the Belgian Ministry of Finance on a draft royal decree amending the Royal Decree of 10 December 2008 on the guarantee for certain risks assumed by financial institutions (

text: ) Introduction and legal basis

text: On 11 March 2009 the European Central Bank (ECB) received a request from the Nationale Bank van België/Banque Nationale de Belgique (NBB), acting on behalf of the Belgian Ministry of Finance, for an opinion on a draft royal decree amending the Royal Decree of 10 December 2008 on the guarantee for certain risks assumed by financial institutions (hereinafter the ‘draft royal decree’). Given the current turbulence in the financial markets and the need for firm intervention by the authorities involved, the consulting authority has requested the ECB to provide its opinion as a matter of extreme urgency to allow the swift adoption of the draft royal decree. The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and on the sixth indent of

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

text: 1. Purpose of the draft royal decree

text: 1.1 The draft royal decree extends the scope of the Royal Decree of 10 December 2008, on which the ECB previously opined . The Royal Decree of 10 December 2008 completes the system for granting the guarantee of the Belgian State for liabilities entered into by financial institutions by

text: establishing a State guarantee aimed at avoiding that the entity whose commitments are guaranteed,

text: or a subsidiary thereof, will be exposed to a serious need for additional liquidity, due inter alia to a

text: downgrading of their rating .

text: 1.2 Overall, the draft royal decree does not substantially alter the scheme set up under the Royal

text: Decree of 10 December 2008 . Instead, it is limited to extending the scope of the scheme so that

text: not only commitments to cover losses or a risk of losses on financial assets held by a guaranteed

text: entity’s subsidiaries may be guaranteed , but also in certain circumstances an undertaking by the

text: guaranteed entity to buy financial assets held by its subsidiaries . The report to the King explains

text: that considering that an entity’s liquidity position is, in addition to the risk of default on its

text: portfolio, another element taken into account in determining its rating, it might be necessary for a

text: parent company to undertake to buy its subsidiary’s assets in certain circumstances (i.e. to grant the

text: subsidiary a put option over the assets) in order to generate sufficient liquidity for the subsidiary

text: and therefore uphold the latter’s rating, which in turn will avoid liquidity outflows.

text: 2. General observations

text: The ECB has already opined on several elements of the general rescue package put in place by the

text: Belgian authorities in response to the current turbulence in the financial markets . The ECB underlines

text: that all the comments and recommendations made in its Opinions

text: and

text: apply

text: equally to the draft royal decree.

text: In particular, the ECB wishes to stress that it is important for national authorities to seek to coordinate

text: their responses to the current financial situation with their European Union partners. This is in line with

text: the Declaration of 12 October 2008 made at the summit of the euro area Member States in Paris, which

text: stressed the need for the Member States to ‘act in a united manner and avoid that national measures adversely affect the functioning of the single market and the other member States’ . The ECB also reminds the consulting authority of the importance of ensuring the harmonisation of the price determination of such a guarantee within the euro area and the EU, and that the price of such guarantee should be risk-based and market-oriented, i.e. determined on the basis of the cost of obtaining a corresponding guarantee in the market. In this respect, the ECB recommends to apply, mutatis mutandis, the practice set out in its Recommendations on government guarantees for bank debt . Hence, the extension of the scope of the State guarantee under the draft royal decree must be appropriately reflected in the price determination of the State guarantee.

text: Done at Frankfurt am Main, 19 March 2009.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


text: See ECB Opinion

text: of 24 May 2007 at the request of the Hungarian Ministry of Finance on a draft law amending the Law on the Magyar Nemzeti Bank. All ECB opinions are available on the ECB’s website at www.ecb.europa.eu.

text: See the ECB’s Convergence Report May 2008, p. 18.

text: See ECB Opinion

text: of 21 February 2008 at the request of the German Ministry of Finance on a draft law amending the Law on the Deutsche Bundesbank; ECB Opinion

text: of 21 February 2008 at the request of the Italian Ministry of Economic Affairs and Finance on some provisions of the Law on the State annual and pluriannual budget (2008 Budget law); ECB Opinion

text: of 4 August 2008 at the request of the Swedish Ministry of Finance on a report concerning the financial independence of Sveriges Riksbank; ECB Opinion

text: of 2 December 2008 at the request of the Spanish State Secretary for Economic Affairs on a draft royal decree on the arrangements for paying the Banco de España’s profits to the Treasury; ECB Opinion

text: of 16 January 2009 at the request of the Belgian Minister for Finance on a draft law amending the financial provisions of the Law of 22 February 1998 establishing the Organic Statute of the Nationale Bank van België/Banque Nationale de Belgique.

text: See e.g. Opinion

text: See Opinion

title: Opinion of the European Central Bank of 24 March 2009 at the request of Lietuvos bankas on behalf of the Ministry of Finance of Lithuania on a draft law amending the Law on Lietuvos bankas as regards the rules on the distribution of the profits of Lietuvos bankas (CON/2009/26)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 24 March 2009 at the request of Lietuvos bankas on behalf of the Ministry of Finance of Lithuania on a draft law amending the Law on Lietuvos bankas as regards the rules on the distribution of the profits of Lietuvos bankas (

text: ) Introduction and legal basis

text: On 13 March 2009 the European Central Bank (ECB) received a request from Lietuvos bankas on behalf of the Ministry of Finance of Lithuania for an opinion on a draft law amending the Law on Lietuvos bankas as regards the rules on distribution of the profits of Lietuvos bankas (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the third indent of

text: Article 2(1) of Council Decision 98/415/EC of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to Lietuvos bankas. 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 provides that Lietuvos bankas should contribute, extraordinarily, 100 % of its profit for the financial year 2008 to the State budget, instead of 50 % of its profit as currently provided for in the Law on Lietuvos bankas. The contribution to the State budget is to be made only after making a deduction to cover any losses carried forward from previous financial years. 1.2 According to Article 23(3) of the Law on Lietuvos bankas, the profit for a financial year is to be allocated: first, to cover losses carried forward from previous financial years; second, to contribute to the State budget 50 % of the profit of Lietuvos bankas for the financial year, or a part thereof remaining after covering losses carried forward from previous financial years; and third, after the first and the second allocations, the part of the profit remaining is to be transferred to the authorised and/or reserve capital. If the amount required to enable the authorised capital to reach 200 million litai (about EUR 58 million) is less than the amount available, then the required

text: amount is allocated to the authorised capital, and the residual amount is allocated to the reserve capital. 1.3 If the draft law is adopted, Lietuvos bankas will have no funds to transfer to the authorised and/or reserve capital for 2008.

text: 2. General observations

text: 2.1 The national legislation of a Member State must be fully compatible with the institutional and financial independence of Lietuvos bankas, thus ensuring the proper performance of Lietuvos bankas’s tasks under the Treaty and the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’). In particular, the compatibility of the Law on Lietuvos bankas with the requirements of Article 108 of the Treaty and the provisions of the Statute of the ESCB concerning central bank independence is of utmost importance, as Lietuvos bankas’s primary objective of price stability is best served by a fully independent institution with a precisely defined mandate . The proposed amendment raises concerns with respect to the institutional and financial independence of Lietuvos bankas. 2.2 The principle of institutional independence is expressly referred to in Article 108 of the Treaty and Article 7 of the Statute of the ESCB, which prohibit the national central banks (NCBs) and members of their decision-making bodies from seeking or taking instructions from Community institutions or bodies, from any government of a Member State or from any other body. In addition, these provisions prohibit Community institutions and bodies and the governments of the Member States from seeking to influence the members of the decision-making bodies of the NCBs in the performance of their tasks related to the European System of Central Banks (ESCB) . Therefore the rights of third parties to give instructions to NCBs, their decision-making bodies or their members are incompatible with the Treaty and the Statute of the ESCB as far as ESCB-related tasks are concerned. 2.3 The concept of financial independence should be assessed from the perspective of whether any third party is able to exercise either direct or indirect influence not only over the tasks of an NCB, but also over its ability - understood both operationally in terms of manpower , and financially in

text: terms of appropriate financial resources - to fulfil its mandate. The NCBs must also, at all times, have sufficient financial means to carry out their other functions, i.e. to perform their national tasks, to meet their international obligations and properly cover their administrative and operational expenses. With regard to profit allocation, an NCB’s statutes may prescribe how profits are to be allocated. In the absence of such provisions, the decision on allocation of profits should be taken by the NCB’s decision-making bodies on professional grounds, and should not be subject to the discretion of third parties unless there is an express safeguard clause stating that this is without prejudice to the financial means necessary for carrying out the NCB’s ESCB-related tasks . 2.4 In addition, the draft law must comply with the monetary financing prohibition laid down in Article 101(1) of the Treaty and

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) 6 7 [now Articles

text: and

text: ] of the Treaty . As referred to in previous ECB opinions , in order to comply with the monetary financing prohibition, it is of crucial importance that the distribution of profits by instalments, or in full, does not imply advances on future or provisional profits but is rather the result only of profits that are fully realised, accounted for and audited, which in turn requires due calculation of profits and losses.

text: 3. Specific comments

text: 3.1 The draft law raises concerns regarding its compatibility with the institutional independence of Lietuvos bankas to the extent that it can be construed as an instruction to Lietuvos bankas in the specific context of this legislative initiative. Indeed, the rules on the allocation of Lietuvos bankas’s profits are being modified on a temporary basis. In substance, this amounts to an instruction by the Lithuanian Parliament to deviate from the established rules on profit distribution in order to transfer 100 % of the profits to the State. 3.2 The draft law modifies the rules on the allocation of Lietuvos bankas’s profits in the current financial turmoil. The financial turmoil or any other exceptional circumstance cannot justify infringing Article 108 of the Treaty or Article 7 of the Statute of the ESCB. Notwithstanding the aim of the draft law, as specified by the consulting authority, of enhancing the stability and credibility of the Lithuanian financial system, it is in any circumstances particularly important to ensure and strengthen the independence of Lietuvos bankas, and even more so in periods of crisis. Moreover, overcoming the current financial turmoil depends on the ability of central banks to carry out their functions independently. 3.3 The draft law also raises concerns about the financial independence of Lietuvos bankas, as all its profit is to be contributed to the State budget. First, the draft law would deprive Lietuvos bankas of

text: the possibility of allocating part of the profit to its authorised and/or reserve capital. According to the principle of financial independence, as stressed by the ECB in all its convergence reports as regards financial provisions or buffers, including the Convergence Report of May 2006 regarding Lithuania, an NCB must be free independently to create financial provisions to safeguard the real value of its capital and assets. Second, the draft law could also deprive Lietuvos bankas of sufficient financial means to carry out its mandate and could impair its independent functioning. 3.4 Finally, the provisions in an NCB’s statutes on how profits are to be allocated are aimed both at serving central bank independence and giving the shareholders legal certainty. Even though amendments to such rules are possible, it is important to protect the rules related to the distribution of profit from third-party interests and to ensure a legal framework that provides a stable and longterm basis for the central bank’s functioning . An ad hoc change to the rules on the distribution of profits, which reflects a particular financial need of the main shareholder and which takes all the profits from the central bank, is a cause of particular concern and is not compatible with the Treaty or the Statute of the ESCB.

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

text: Done at Frankfurt am Main, 24 March 2009.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


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

text: OJ L 319, 5.12.2007, p. 1.

text: OJ L 166, 11.6.1998, p. 45. Directive

text: has already been transposed into Slovenian legislation by several legal acts. Payment systems were covered in the Law on payment transactions (Zakon o plačilnem prometu, adopted on 20 March 2002, published in Uradni list RS No 30/2002, ZPlaP) which the draft law will repeal. The Law on the market in financial instruments (Zakon o trgu finančnih instrumentov, adopted on 12 July 2007, published in Uradni list RS No 67/2007) and the Law on dematerialised securities (Zakon o nematerializiranih vrednostnih papirjih, adopted on 23 March 1999, published in Uradni list RS No 23/1999) regulate settlement finality in securities settlement systems.

text: OJ L 275, 27.10.2000, p. 39. The ZPlaP has already transposed Directive

text: See ECB Opinion

text: of 26 April 2006 on a proposal for a directive on payment services in the internal market (OJ C 109, 9.5.2006, p. 10).

text: Zakon o Banki Slovenije, official consolidated version adopted on 23 June 2006, published in Uradni list RS No 72/06.

title: Opinion of the European Central Bank of 24 March 2009 at the request of the Slovenian Ministry of Finance on a draft law on payment services and system (CON/2009/27)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 24 March 2009 at the request of the Slovenian Ministry of Finance on a draft law on payment services and systems (

text: ) Introduction and legal basis

text: On 25 February 2009 the European Central Bank (ECB) received a request from the Slovenian Ministry of Finance for an opinion on a draft law on payment services and payment systems (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the third and fifth indents of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to Banka Slovenije and to payment and settlement systems. 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 main purpose of the draft law is to transpose into Slovenian legislation Directive

text: of the European Parliament and of the Council of 13 November 2007 on payment services in the internal market amending Directives

text: and

text: and repealing Directive

text: . The draft law also implements Directive

text: of the European Parliament and of the Council of 19 May 1998 on settlement finality in payment and securities settlement systems and Directive

text: of the European Parliament and of the Council of 18 September 2000 on the taking up, pursuit of and prudential supervision of the business of electronic money institutions . As stated in the consultation request, the draft law goes beyond the

text: implementation of the abovementioned Community directives, by including provisions governing payment systems (Chapter 11) and penal provisions for infringements of the draft law (Chapter 17). 1.2 On the basis of

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

text: , this opinion only covers the provisions of Chapter 11 of the draft law that relate to payment systems. While acknowledging the importance of Directive

text: for the establishment of the Single European Payments Area (SEPA), the ECB provides no assessment in this opinion of the overall implementation of Directives

text: and

text: in Slovenia.

text: 2. General observations

text: The ECB welcomes the draft law which will comprehensively govern the payment infrastructure in Slovenia and, by implementing Directive

text: , will among others also fulfil regulatory preconditions for the introduction of the SEPA.

text: 3. Specific observations

text: 3.1 Supervision of payment institutions The draft law will entrust Banka Slovenije with new payment institution oversight and supervision tasks. The ECB welcomes this widening of Banka Slovenije’s powers which has to be supported by providing Banka Slovenije with sufficient human and financial resources, both in terms of quantity and quality, to carry out its new tasks without affecting its capacity to carry out its Eurosystemrelated tasks. In this respect, the ECB notes Articles

text: and

text: and Article 231(5) of the draft law, which provide for the reimbursement of Banka Slovenije’s expenses arising from the performance of the newly assigned tasks. 3.2 Important payment systems Article 151 of the draft law defines ‘important payment systems’ as payment systems which, due to the scale or type of payment transactions settled in such payment systems or other circumstances, have significant influence on the smooth execution of payment transactions in the country or on the confidence of payment service users in their safety and efficiency. The ECB notes that pursuant to Article 161(5) of the draft law, Banka Slovenije should notify important payment systems to the Commission to fulfil Slovenia’s obligation under

text: Article 10 of Directive 98/26/EC

text: . The ECB welcomes allocating to the overseeing authority the competence to notify systems under Directive

text: and notes, in addition, that Banka Slovenije will exercise its oversight function pursuant to the Law on Banka Slovenije in line with the harmonised oversight framework adopted by the ECB’s Governing Council.

text: 3.3 Notifying insolvency proceedings Pursuant to Article 163(5) of the draft law, Banka Slovenije informs competent authorities of other Member States of the opening of insolvency proceedings against a participant in an important payment system or similar measures referred to in Article 163(1) of the draft law. The ECB welcomes this provision and would suggest going beyond the scope of Directive

text: by requiring Banka Slovenije to also notify the national payment systems of such proceedings or measures, hence preventing the settlement of an insolvent participant’s payment instructions.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET