title: Opinion of the European Central Bank of 4 August 2025 on civil crisis and national defence (CON/2025/18)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 4 August 2025 on civil crisis and national defence (

text: ) Introduction and legal basis

text: On 11 June 2025, the European Central Bank (ECB) received a request from the Government Office of the Republic of Estonia for an opinion on a draft law on the Law on civil crisis and national defence (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union (TFEU) and the second, third, fifth and sixth indents of

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

text: , as the draft law relates to means of payment, Eesti Pank, payment and settlement systems, rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets, and the ECB’s tasks concerning the prudential supervision of credit institutions pursuant to

text: Article 127(6)

text: TFEU. 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 establishes a comprehensive legal framework for crisis management in the Republic of Estonia. In particular, the draft law: (1) consolidates various crisis-response mechanisms previously addressed in separate legal acts into a unified structure; (2) establishes procedures for coordinated crisis management across the civil and military sectors; and (3) identifies essential services and sets continuity requirements for crisis situations. 1.2 According to the explanatory memorandum accompanying the draft law, the nature and scope of potential crises cannot be fully predicted, and multiple crises in different sectors or of varying severity may occur simultaneously or consecutively. Crisis situations can escalate rapidly and necessitate proportionate responses through available legal instruments. The draft law aims to establish the shortest possible chain of command and promotes comprehensive risk assessments to facilitate coordinated efforts among multiple stakeholders, with a central objective of ensuring the stability and resilience of the financial sector during crisis situations. Through the unification of crisis response

text: 1 Tsiviilkriisi ja riigikaitse seadus, eelnõu.

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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42, ELI: http://data.europa.eu/eli/dec/1998/415/oj). mechanisms, the draft law seeks to improve institutional readiness and ensure effective crisis management across all levels of governance . 1.3 The draft law defines crisis situations broadly to encompass various types of emergencies that may require a coordinated government response. A crisis situation is deemed to exist when all of the following conditions are met: (1) pursuant to the principle of subsidiarity, the competent authority or person cannot, or cannot in a timely manner, resolve the crisis or avert the threat or prepare for it, and it is necessary at the level of the Government of the Republic to ensure unified and coordinated actions by several authorities or persons; (2) the situation cannot be resolved without applying the management arrangements prescribed in the draft law or without applying measures that restrict a person’s fundamental rights and freedoms; and (3) more than the usual capabilities are needed, including personnel, resources, and reserves, and either a civil crisis needs to be resolved, or there is a threat to national security or the constitutional order or it is necessary to participate in a collective self-defence operation. 1.4 Under the draft law, Eesti Pank assumes a dual role as both national central bank (NCB) and essential service continuity organiser for payment services and cash circulation. The draft law also amends the Law on Eesti Pank to set out the permanent tasks that must be maintained during crises (hereinafter ‘Eesti Pank’s permanent crisis tasks’), many of which overlap with the tasks which Eesti Pank must already perform, as follows : (1) to help define the monetary policy of the Union and to implement the monetary policy set by the ECB’s Governing Council; (2) to hold and manage official reserves of foreign currency; (3) to regulate the circulation of money, to facilitate the issuance of euro banknotes and to issue euro coins ; (4) to ensure the functioning of payment systems managed by Eesti Pank ; (5) to contribute to the stability of the financial system, including by participating in financial crisis resolution ; and (6) to perform the functions of a business continuity manager for a critical service . The draft law clarifies that Eesti Pank would be subject to orders by the government

text: 3 See pp. 11–12 of the explanatory memorandum accompanying the draft law.

text: 4 A civil crisis is a natural disaster, catastrophe or outbreak of a communicable disease, or other situation that may cause serious and widespread disruption to the functioning of society, or pose an immediate threat to the life and health of a large number of people, or cause major material, economic or environmental damage. See Section 2(1) of the draft law.

text: 5 A collective self-defence operation conducted to fulfil an obligation under an international agreement based on the right recognised in Article 51 of the Charter of the United Nations, or another lawfully incurred obligation. See Section 136 p. 1 and Section 3 of the draft law.

text: 6 Law on Eesti Pank (Eesti Panga seadus, RT I 1993, 28, 498, RT I, 01.03.2023, 45).

text: 7 See Section 186 p. 1 of the draft law.

text: 8 The tasks listed in clauses (1) to (3) herein are tasks which Eesti Pank must already perform in all circumstances under Section 2(2) points 1, 2 and 5 of the Law on Eesti Pank.

text: 9 The tasks listed under clause (4) herein seem to relate to the general task of Eesti Pank currently set out in Section 2(2) point 4 of the Law on Eesti Pank (‘to promote the efficient operation of payment systems, to exercise oversight of payment systems and to participate in the development of the clearing environment’).

text: 10 The task listed under clause (5) herein seems to relate to the general task of Eesti Pank currently set out in Section 2(2) point 3 of the Law on Eesti Pank (‘to promote the stability of the financial system and to exercise macro-prudential supervision (hereinafter “macroprudential supervision”) over the financial system’).

text: 11 According to the draft law, Eesti Pank will perform the functions of a business continuity manager for payment services, technical support services for payment services, and cash circulation. The task listed under (6) seems to relate to the general task of Eesti Pank currently set out in Section 36(3) of the Law on emergency (Hädaolukorra seadus, RT I, 2017, 1, RT I, 22.05.2025, 4), whereby Eesti Pank organises the continuity of payment services and cash circulation. authority responsible for dealing with the crisis situation within the scope of the Eesti Pank’s permanent crisis tasks when strictly necessary . 1.5 Beyond Eesti Pank’s permanent crisis tasks as outlined above, the draft law assigns several additional crisis-related duties to Eesti Pank. First, Eesti Pank would participate in the preparation of the national risk analysis in cooperation with the Estonian Financial Supervision and Resolution Authority (Finantsinspektsioon) . According to the explanatory memorandum accompanying the draft law, this involves analysing country-wide threats that could lead to crisis situations and assessing their likelihood and consequences. Eesti Pank is expected to contribute expertise on financial sector risks, systemic vulnerabilities, and interdependencies, ensuring that payment and settlement systems are considered in national crisis scenarios. Second, Eesti Pank would prepare and maintain crisis plans, either jointly with the Ministry of Finance or Finantsinspektsioon, and submit them for review . As stated in the explanatory memorandum accompanying the draft law, crisis plans outline necessary actions, capabilities, governance arrangements, and coordination measures for crisis response. These plans must address the continuity of central banking functions, payment systems, and cash circulation, and must be regularly updated. Third, Eesti Pank would act as the organiser of essential services related to payment services and cash circulation , which entails coordinating continuity measures, advising service providers, setting continuity requirements, supervising compliance, approving risk analyses and crisis plans, and leading the resolution of major interruptions . Fourth, Eesti Pank would reserve mandatory crisis task positions for its President and the Chairman of its Supervisory Board, and would be able to classify such further positions as necessary . Key leadership positions are designated as crisis roles with work obligations to ensure institutional continuity during emergencies. The draft law requires these positions to retain critical decisionmaking authority, while allowing flexibility to designate additional staff as necessary for comprehensive crisis management. Fifth, Eesti Pank would assess and designate which credit institutions, payment institutions, and emoney institutions qualify as essential service providers, and would set detailed requirements and procedures for such assessments, including the obligation to enable offline card-based payments under certain crisis conditions . In this respect, Eesti Pank would establish objective criteria for essential service designation and determine which financial institutions provide vital services based

text: 14 See pp. 48–49 of the explanatory memorandum accompanying the draft law.

text: 16 See p. 66 of the explanatory memorandum accompanying the draft law.

text: 17 Under the Law on Eesti Pank already has the task of organising the continuity of vital services such as payment services and cash circulation. See Section 36(3) points 1 and 2 of the Law on emergency.

text: 20 See Sections 186, 213 and 222 of the draft law. on their impact on payment operations, and may require capabilities such as offline payment processing to ensure financial system resilience during network disruptions. Sixth, Eesti Pank would participate in the management of the State's cash flow and stabilisation reserve during crisis situations, upon request by the Ministry of Finance . The Ministry of Finance may involve Eesti Pank in managing State financial resources and reserves during crisis situations. Eesti Pank would provide expertise and operational support for managing State liquidity and the stabilisation reserve, especially when rapid and coordinated action is required during emergencies to enhance financial resilience and ensure availability of critical funds. 1.6 The draft law sets out special measures for the financial sector during emergency situations and national defence crises. It empowers the Government, in coordination with the Finantsinspektsioon, to impose extraordinary rules on financial institutions when normal legal instruments are insufficient to avert serious threats to financial stability, public order, or national security . The draft law grants the Government broad discretionary powers over financial sector entities. Provided that the stability and soundness of the financial sector, or the continuity of critical functions, are not unduly impaired, the Government may decide on measures applicable to the entities under financial supervision where a state of emergency or martial law affects the financial sector. 1.7 The most significant measures the Government may adopt include the following. First, the Government may establish prudential or similar standards. The Government may impose prudential requirements or other comparable norms, especially in relation to credit institutions and certain other financial sector entities. It may also deviate from standard prudential thresholds if necessary. Second, the Government may impose conditions on making of investments, including requiring the purchase of debt securities issued by the sovereign. This power is subject to the following important limitations: it cannot be used to compel investments that are already required for compliance with prudential standards, the minimum requirement for eligible liabilities, or other similar regulatory obligations that apply to entities under financial supervision. These requirements are comprehensively governed by Union regulations, including those implemented through the Estonian Law on financial crisis prevention and resolution . Third, the Government may prohibit disbursements of profits or impose other conditions on the holders of qualifying holdings in entities subject to financial supervision. The Government may prohibit or limit profit distributions or impose other conditions on significant shareholders to ensure sustainable management of the institution’s cash flows . Fourth, the Government may prohibit or restrict certain transactions or operations, including their volume. The Government may further determine by order: repayment terms, lending conditions, insurance payouts, securities trading, payment execution, and other measures needed to address

text: 21 See Section 241 of the draft law.

text: 22 See Section 36 of the draft law.

text: 23 See pp. 120–121 of the explanatory memorandum accompanying the draft law. Estonian Law on financial crisis prevention and resolution (Finantskriisi ennetamise ja lahendamise seadus, RT I, 19.03.2015, 3, RT I, 11.10.2024, 5).

text: 24 The explanatory memorandum accompanying the draft law states that similar restrictions were encouraged by the ECB and European Systemic Risk Board during the COVID-19 crisis. See p. 121 of the explanatory memorandum accompanying the draft law. the crisis. These measures aim to ensure optimal cash flow and resource management within supervised entities and are applied only when necessary to resolve a crisis and ensure societal functioning. Restrictions may include limits on transaction hours or suspension of specific services such as investment or foreign exchange services. Fifth, the Government may suspend regular contributions within the meaning of the Guarantee Fund Act to the sub-funds of the Guarantee Fund. Sixth, the Government may implement a complete or partial moratorium on credit institution operations or establish a special regulatory regime for insurance companies. Such measures enable the temporary suspension or restriction of a bank's or insurance company's activities in accordance with specified procedures and conditions . 1.8 Declaring a state of emergency alone does not, in itself, authorise the Government to adopt the above measures. For example, if a state of emergency has been declared, but it does not affect financial sector stability in any way, then it is neither necessary nor legally possible to apply the measures set out in the draft law to the financial sector. However, if a state of emergency or extraordinary situation significantly affects the provision of an essential service such as electricity supply and this significantly affects, for example, the work of credit institutions, then in such circumstances it may be necessary under the draft law to introduce certain measures to maintain sector stability . 1.9 A decision by the Government to impose an extraordinary rule may be adopted for a period of up to three months, following consultation with the Finantsinspektsioon and Eesti Pank . The Government may extend the validity of such a decision for up to three months at a time, depending on the specific circumstances and the continued relevance and necessity of the measure . 1.10 The draft law provides that if the Government intends to impose an extraordinary rule on matters within the competence of the ECB or the Single Resolution Board (SRB), the Government may do so only if the ECB or the SRB does not actually exercise its tasks or is unable to do so in Estonia . As noted in the explanatory memorandum accompanying the draft law, where

text: Council Regulation (EU) No 1024/2013

text: and

text: Regulation (EU) No 806/2014

text: of the European Parliament and of the Council grant exclusive competence to the ECB or the SRB, a special procedure applies if the Government intends to act in their place. The Government may act only in two distinct and independent situations: (i) where the ECB or the SRB is not actually functioning, or (ii) where these institutions are unable to perform their tasks or exercise their powers in Estonia due to crisis or other reasons. This includes inaction, failure to issue necessary decisions, or the absence of active

text: 26 See p. 117 of the explanatory memorandum accompanying the draft law.

text: 28 See p. 122 of the explanatory memorandum accompanying the draft law.

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

text: conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63, ELI: http://data.europa.eu/eli/reg/2013/1024/oj).

text: Regulation (EU) No 806/2014

text: of the European Parliament and of the Council of 15 July 2014 establishing uniform rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of a Single Resolution Mechanism and a Single Resolution Fund and amending

text: Regulation (EU) No 1093/2010

text: (OJ L 225, 30.7.2014, p. 1, ELI: http://data.europa.eu/eli/reg/2014/806/oj). supervisory engagement, as well as technical or operational barriers such as IT failures or communication breakdowns . In addition, where an opinion has been requested from the ECB or the SRB on a planned decision and no response has been received within the timeframe set by the Estonian Government, the Government is entitled to proceed with the decision . 1.11 The explanatory memorandum accompanying the draft law state that under Estonian law the Finantsinspektsioon is responsible for increasing financial sector stability and resolving financial crises . However, its powers under the law are limited to a certain extent, particularly regarding banking, where direct supervision of significant credit institutions and the supervision of less significant credit institutions are conferred on the ECB under

text: Regulation (EU) No 1024/2013

text: . 1.12 The explanatory memorandum accompanying the draft law indicate that the proposed regulatory framework draws, in part, upon the crisis management framework established in Finland. In this context, the explanatory memorandum accompanying the draft law specifically reference the ECB’s previous opinions concerning Finland’s emergency legislation and identify Article 347 of the TFEU as providing the legal basis for national derogations from ordinary TFEU obligations under exceptional circumstances .

text: 2. Observations

text: Overlap with tasks of the ECB and the ESCB

text: 2.1 Many of Eesti Pank’s permanent crisis tasks under the draft law overlap with the tasks which Eesti Pank must already perform under the TFEU and the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’), including the basic tasks to be carried out through the European System of Central Banks (ESCB) under

text: Article 127(2)

text: , first, third and fourth indents, of the TFEU, namely: to define and implement monetary policy; to hold and manage foreign reserves; and to promote the smooth operation of payment systems. 2.3 The ECB has noted in its past opinions that under the TFEU several competences are conferred irrevocably on the Union. This includes the exclusive competence for monetary policy for Member States whose currency is the euro . A Member State whose currency is the euro transfers to the Union its powers in the area of monetary policy and the tasks of the ESCB listed in the TFEU and the Statute of the ESCB. These powers and tasks include setting interest rates, injecting or withdrawing liquidity in the market, ensuring efficient and sound clearing and payment systems, managing foreign reserves, issuing banknotes, and contributing to the stability of the financial system. In these areas, certain policy-making and legislative powers belong exclusively to the ECB ,

text: 32 See p. 122 of the explanatory memorandum accompanying the draft law.

text: 34 See p. 116 of the explanatory memorandum accompanying the draft law, which refers to such duties of Finantsinspektsioon under Sections 3 and 4 of the Law on the financial supervision authority (Finantsinspektsiooni seadus, RT I 2001, 48, 267, RT I, 31.12.2024, 43).

text: 35 See pp. 116–117 of the explanatory memorandum accompanying the draft law.

text: 36 See ECB Opinions

text: and

text: 37 See p. 123 of the explanatory memorandum accompanying the draft law.

text: 39 See Articles 8 and 12 of the Statute of the ESCB. including contingency planning with respect to the continued performance of these powers and tasks . 2.4 Moreover, under Article 127(6) of the TFEU and

text: Regulation (EU) No 1024/2013

text: , specific tasks concerning the prudential supervision of credit institutions have been conferred upon the ECB. These include the granting and withdrawal of authorisations to take up the business of a credit institution, the assessment of acquisitions of qualifying holdings in credit institutions, the imposition of prudential requirements, reporting and disclosure obligations, and ensuring compliance with the relevant Union law as specified in

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

text: . 2.5 This implies that Member States should refrain from taking any measures which could jeopardise the ECB's or the ESCB's objectives, and exceptions under Article 347 of the TFEU should be narrowly interpreted by Member States as further discussed in the paragraphs below. 2.6 More specifically, the ECB notes that while the draft law provides that the Estonian Government may act only if the ECB does not actually operate or exercise its competence in Estonia due to a crisis situation or other reasons, the criteria for determining such inability remain insufficiently defined. Such situations may include information technology or communication failures, as well as instances where a decision or opinion from the ECB is not received within timelines set by the Estonian Government . The ECB emphasises that its competences under the TFEU and

text: Regulation (EU) No 1024/2013

text: apply in all circumstances, including during emergency conditions, and cannot be unilaterally set aside by national authorities based on unilateral determinations of the ECB's ability to act. The determination that the ECB is unable to perform its tasks cannot be based on situations where the ECB is functioning but may not respond within nationally imposed deadlines or where technical difficulties do not fundamentally impair the ECB's decision-making capacity. Any national measures that would effectively replace ECB competences must comply strictly with the conditions laid down in Article 347 of the TFEU. 2.7 More broadly, as previously noted by the ECB, pursuant to the principle of sincere cooperation under Article 4(3) of the Treaty on European Union, Member States must assist the ECB in these fields, carrying out tasks which flow from the Treaties . Emergency derogations under Article 347 of the TFEU 2.8 Article 347 of the TFEU envisages that a Member State may be called upon to take action in the event of serious internal disturbances affecting the maintenance of law and order, war, serious international tension constituting a threat of war, or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security . Accordingly, in the event of emergency conditions under Article 347 of the TFEU, which may include situations that would be

text: 40 See paragraph 2.1 of Opinion

text: , paragraph 2.1 of Opinion

text: , and paragraphs 2.1 and 2.2 of Opinion

text: 41 See pp. 122–123 of the explanatory memorandum accompanying the draft law.

text: 42 See paragraph 2.1 of Opinion

text: , paragraph 2.1 of Opinion

text: , paragraph 2.1 of Opinion

text: , and paragraph 2.1 of Opinion

text: 43 See paragraph 2.2 of Opinion

text: , paragraph 2.2 of Opinion

text: , and paragraph 2.2 of Opinion

text: . classified as such under the draft law, national authorities may be justified in exercising, on a temporary basis, powers that fall within the exclusive competence of the ESCB. 2.9 Any reliance on Article 347 of the TFEU must take place strictly under conditions laid down in the TFEU itself, as interpreted by the Court of Justice of the European Union (CJEU). Article 347 of the TFEU deals with exceptional cases which are clearly defined and are to be interpreted in a restrictive manner, and it can, therefore, be understood only as a ‘hedging clause’ and not as an expression of any residual Member State competence . Moreover, the CJEU has held that when acting due to urgency in areas of exclusive Union competence, Member States may act only as ‘trustees of the common interest’ and may not bring into force any interim measures except as part of a process of collaboration with the Union . 2.10 Due to the exceptional nature of Article 347 of the TFEU, Member States should refrain from adopting preventive legislation in the absence of the conditions laid down in Article 347 of the TFEU. Even in situations involving serious internal disturbances affecting law and order, war, or serious international tension constituting a threat of war, or for the purpose of fulfilling obligations aimed at maintaining peace and international security, national authorities may be justified in exercising, on a temporary and exceptional basis, powers that fall within the exclusive competence of the ESCB, acting essentially as trustees of the common interest . While Member States may establish preparatory frameworks, organisational structures and planning mechanisms for crisis response, concrete measures that would conflict with TFEU obligations may only be implemented when

text: Article 347

text: conditions are actually met and after proper consultation with EU institutions . If the national legislature wishes to rely on Article 347 of the TFEU, it is for the Member State to ensure that the conditions for applying it are specifically fulfilled at the time of adopting the measure that conflicts with that Member State’s TFEU obligations. The draft law should not lead to a breach of TFEU obligations applicable to a Member State. Independence of the ESCB NCBs and SSM 2.11 The ECB notes that, pursuant to Article 130 of the TFEU, when exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB, an NCB shall not seek or take instructions from any government of a Member State or any other body, and the governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the NCBs in the performance of their tasks. 2.12 Furthermore, the ECB notes that the draft law also aims to replace, under certain conditions, the competences of the ECB with respect to the prudential supervision of credit institutions under Article 127(6) of the TFEU and

text: Regulation (EU) No 1024/2013

text: . In this regard,

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

text: stipulates that, when carrying out the tasks conferred on it by this Regulation,

text: 44 See paragraph 2.2 of Opinion

text: and paragraph 2.2 of Opinion

text: 45 See paragraph 2.3 of Opinion

text: and paragraph 2.2 of Opinion

text: 46 See paragraph 10 of Opinion

text: , paragraph 2.2 of Opinion

text: , and paragraph 2.3 of Opinion

text: 47 See paragraph 2.2 of Opinion

text: and paragraph 10.2.2 of Opinion

text: 48 See C. Zilioli, ‘National Emergency Powers and Exclusive Community Competences – A Crack in the Dam?’, Legal Aspects of the European System of Central Banks, European Central Bank, Frankfurt am Main, 2005, pp. 115-133, at pp. 131-132.

text: 49 See

text: Article 1

text: and

text: recital 15

text: of

text: Regulation (EU) No 1024/2013

text: . the ECB and the national competent authorities acting within the Single Supervisory Mechanism (SSM) must act independently, also requiring that the governments of the Member States must respect that independence. 2.13 Under the draft law, Eesti Pank would be subject to orders by the government authority responsible for dealing with the crisis situation within the scope of Eesti Pank’s permanent crisis tasks when strictly necessary. However, the ECB understands that the draft law does not allow for any interference with the performance of the tasks conferred on Eesti Pank as part of the ESCB by the TFEU or

text: Regulation (EU) No 1024/2013

text: as a constitutional institution under Estonian law. However, to avoid doubts, this should be explicitly clarified in the draft law. This opinion will be published on EUR-Lex. Done at Frankfurt am Main, 4 August 2025. [signed] The President of the ECB Christine LAGARDE


publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 4 August 2025 on the independence of Finanssivalvonta and the cooling-off periods applicable to the officials of Suomen Pankki (CON/2025/19)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 4 August 2025 on the independence of Finanssivalvonta and the cooling-off periods applicable to the officials of Suomen Pankki (

text: ) Introduction and legal basis

type: rubrik

text: On 13 June 2025 the European Central Bank (ECB) received a request from the Finnish Ministry of Finance for an opinion on draft Finnish legislative proposals concerning the transposition of amendments to Directive

text: of the European Parliament and of the Council introduced by

text: Directive (EU) 2024/1619

text: of the European Parliament and of the Council (hereinafter the ‘CRD6’), including in particular a draft law on amendments to the Law on the Financial Supervisory Authority (hereinafter the ‘first draft law’) and a draft law on amendments to the Law on the officials of Suomen Pankki (hereinafter the ‘second draft law’, and together with the ‘first draft law’, the ‘draft laws’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and

text: Article 2(1)

text: , third indent, of

text: Council Decision 98/415/EC

text: , as the draft laws relate to Suomen Pankki and the specific tasks conferred upon the ECB concerning the prudential supervision of credit institutions pursuant to Article 127(6) of the Treaty. In accordance with

text: Article 17.5

text: , first sentence, 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 laws

text: 1.1 The main purpose of the draft laws is to transpose the amendments made by the CRD6 to Directive

text: into Finnish law by amending several laws, including the Law on the Financial Supervisory Authority (hereinafter the ‘Law on the Fin-FSA’). In addition, the draft laws include, inter alia, provisions that transpose into Finnish law

text: Directive (EU) 2024/2994

text: of the European Parliament and of the Council and supplement

text: Regulation (EU) 2024/2987

text: of the European Parliament and of

text: 1 Directive

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

text: and repealing Directives

text: and

text: (OJ L 176, 27.6.2013, p. 338, ELI: http://data.europa.eu/eli/dir/2013/36/oj).

text: Directive (EU) 2024/1619

text: of the European Parliament and of the Council of 31 May 2024 amending Directive

text: as regards supervisory powers, sanctions, third-country branches, and environmental, social and governance risks (OJ L, 2024/1619, 19.6.2024, http://data.europa.eu/eli/dir/2024/1619/oj).

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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42, ELI: http://data.europa.eu/eli/dec/1998/415/oj).

text: Directive (EU) 2024/2994

text: of the European Parliament and of the Council of 27 November 2024 amending Directives

text: and

text: (EU) 2019/2034

text: as regards the treatment of concentration risk arising from exposures towards central counterparties and of counterparty risk in centrally cleared derivative transactions (OJ L, 2024/2994, 4.12.2024, ELI: http://data.europa.eu/eli/dir/2024/2994/oj). the Council . The draft laws also amend the Law on the officials of Suomen Pankki by introducing provisions on cooling-off arrangements for the officials of Suomen Pankki. Finally, the draft laws contain some amendments related to the administrative sanctions imposed by the Finanssivalvonta (FIN-FSA, Financial Supervisory Authority). 1.2 Purpose of the first draft law 1.2.1 Most of the provisions of the first draft law are aimed at transposing into Finnish legislation the provisions of

text: Article 4

text: a of

text: Directive (EU) 2013/36

text: /EU on the supervisory independence of competent authorities. 1.2.2 To transpose

text: Article 4

text: a(2), first subparagraph, of

text: Directive (EU) 2013/36

text: /EU, as inserted by

text: Article 1

text: , point (4), of the CRD6, a new provision would be added to the Law on the Fin-FSA requiring that the Board of the Fin-FSA and each Board member should be independent from the supervised entities, foreign supervised entities and other financial market participants, and that the Board or Board member should not be allowed to receive or request instructions or orders from any public or private body. This provision is intended to further strengthen the independence of Fin-FSA Board members who have a connection to another public or private body. 1.2.3 To transpose

text: Article 4

text: a(2), second subparagraph, of Directive

text: , as inserted by

text: Article 1

text: , point (4), of the CRD6, a maximum term limit of 12 years (i.e. four terms of three years) would be imposed on the Fin-FSA Board members. Furthermore, a new provision would be added on the dismissal of Board members, allowing a Board member to be dismissed if they no longer meet the qualifications for the position or are convicted of a crime. The grounds for the dismissal would be published on the Fin-FSA’s website, if the dismissed person does not object to it. 1.2.4 To transpose

text: Article 4

text: a(3) of Directive

text: , as inserted by

text: Article 1

text: , point (4), of

text: Directive (EU) 2024/1619

text: , in order to prevent conflicts of interest, the Law on the Fin-FSA would be amended to prohibit private financial transactions on certain financial instruments issued by or referenced to supervised entities, with some exceptions related to asset management by third parties and collective investment undertakings. Furthermore, provisions on cooling-off periods would be introduced prohibiting staff members and Board members from being hired by certain entities during the coolingoff periods. To transpose

text: Article 4

text: a(7) of Directive

text: , as inserted by

text: Article 1

text: , point (4), of the CRD6, staff members and Board members would be required to submit declarations of interest concerning assets, liabilities and commitments that may raise conflict of interest concerns. 1.2.5 In addition to transposing the provisions of

text: Article 4

text: a of Directive

text: , as inserted by

text: Article 1

text: , point (4), of the CRD6, the first draft law includes certain provisions which do not directly aim to implement amendments made by the CRD6. A maximum term limit of 15 years (i.e. three times five years) would be introduced for the Director-General who would also be subjected to the cooling-off provisions. The cooling-off periods would also be extended to supervisory staff other than staff responsible for the prudential supervision of credit institutions. In addition, a discretionary cooling-off provision would be included, allowing the Fin-FSA to apply a cooling-off period where considered

text: Regulation (EU) 2024/2987

text: of the European Parliament and of the Council of 27 November 2024 amending Regulations

text: (EU) No 648/2012

text: (EU) No 575/2013

text: and

text: (EU) 2017/1131

text: as regards measures to mitigate excessive exposures to third-country central counterparties and improve the efficiency of Union clearing markets (OJ L, 2024/2987, 4.12.2024, ELI: http://data.europa.eu/eli/reg/2024/2987/oj). necessary in cases where a person, while performing their tasks, has had access to confidential information that could be used in a material way in a new employment position or activity, either for their own benefit or that of another person, or to the detriment of another person. Finally, restrictions on private financial transactions would also apply to certain investments made through investmentlinked insurance products, as well as to investments made for the person’s own account through other persons or entities. 1.3 Purpose of the second draft law 1.3.1 The second draft law aims to prevent possible conflicts of interest arising from officials of Suomen Pankki taking up new employment positions, thus strengthening confidence in public administration. For this purpose, the second draft law would establish a cooling-off regime for officials of Suomen Pankki, which would allow Suomen Pankki to conclude a written cooling-off contract with a person who is nominated for a position at Suomen Pankki. The second draft law also ensures that a coolingoff contract could also be concluded with current officials of Suomen Pankki. The condition for concluding a cooling-off contract would be that the person in their work position has access to confidential information which may be materially used in a new employment relationship or activity either for their own benefit or that of another person or to the detriment of another person. 1.3.2 According to the second draft law, the agreed cooling-off period could not exceed six months from the end of employment in the case of a staff member and 12 months in the case of a Board member. Should the official with a cooling-off contract intend to take up new employment, they would be required to notify Suomen Pankki without undue delay. Following the notification, Suomen Pankki would have one month to assess whether the condition for cooling-off contracts is fulfilled and consequently the cooling-off contract would be activated. Compensation would be paid to the official during the cooling-off period.

text: 2. Observations on the first draft law

text: 2.1 General observations 2.1.1

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

text: (hereinafter the ‘Single Supervisory Mechanism (SSM) Regulation’) stipulates that when carrying out the tasks conferred on it by the SSM Regulation, the ECB and the national competent authorities acting within the SSM must act independently. The legal basis for this provision is Article 127(6) of the Treaty. Article 31(3) of the SSM Regulation furthermore requires the ECB, in cooperation with the national competent authorities, to: (a) establish and maintain comprehensive and formal procedures including ethics procedures and proportionate periods to assess in advance and prevent possible conflicts of interest resulting from subsequent employment within two years of members of the Supervisory Board; and (b) provide for appropriate disclosures. Those procedures are without prejudice to the application of stricter national rules. 2.1.2 In view of this independence and these requirements of the SSM Regulation, the ECB has established an ethics framework to ensure the independence of national competent authorities, such

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

text: conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63, ELI: http://data.europa.eu/eli/reg/2013/1024/oj). as Fin-FSA, when assisting the ECB in carrying out the tasks conferred on it by the SSM Regulation. This ethics framework includes the ECB’s Code of Conduct for high-level ECB officials (hereinafter the ‘Single Code’), which applies, among others, to the members of the Supervisory Board of the ECB when exercising their functions as members of a high-level ECB body, and Guideline

text: (EU) 2021/2256

text: of the European Central Bank , which is addressed to the national competent authorities of the SSM and establishes ethics requirements applicable to the members of their bodies and the members of staff of the national competent authorities. In view of the responsibility of the ECB for the effective and consistent functioning of the SSM , the national competent authorities must comply with Guideline

text: (EU) 2021/2256

text: . 2.1.3 In contrast to the ethics framework ultimately based on Article 127(6) of the Treaty, the CRD6, including its provision on supervisory independence of competent authorities , is based on Article 53(1) of the Treaty. A legal act based on this provision cannot alter the rights and obligations of the ECB and the national competent authorities when carrying out the tasks conferred on them by the SSM Regulation based on Article 127(6) of the Treaty. It follows from settled case-law of the Court of Justice of the European Union that the different legal bases, namely

text: Article 53(1)

text: and Article 127(6) of the Treaty, cannot be combined as the legal basis for a legal act, in view of the different procedures involved. In particular, the measures adopted under Article 53(1) of the Treaty are adopted by the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, and after consulting the Economic and Social Committee (and, if relevant, the ECB in accordance with Articles 127(4) and 282(5) of the Treaty). By contrast, the regulations adopted under Article 127(6) of the Treaty are adopted by the Council alone, in a special legislative procedure in which the Council acts unanimously, after consulting the European Parliament and the ECB . 2.1.4 Hence, the amendments made by the CRD6 are without prejudice to the ethics framework which the ECB has established to ensure the independence of the national competent authorities in the context of the SSM, as both frameworks have their own scope and legal basis. The Union legislator acknowledged this through the CRD6's amendments to Directive

text: , which provide that

text: Article 4

text: a(2) of Directive

text: is without prejudice to the rights and obligations of the national competent authorities pursuant to the SSM established by the SSM Regulation . Such provisions may also serve as guidance for establishing safeguards to the independence of the ECB and the national competent authorities when carrying out the tasks conferred on them by the SSM Regulation.

text: 7 Code of Conduct for high-level ECB officials (OJ C 478, 16.12.2022, p. 3).

text: 8 Guideline

text: (EU) 2021/2256

text: of the European Central Bank of 2 November 2021 laying down the principles of the Ethics Framework for the Single Supervisory Mechanism (ECB/2021/50) (OJ L 454, 17.12.2021, p. 21, ELI: http://data.europa.eu/eli/guideline/2021/2256/oj).

text: 10 See

text: Article 1

text: , point (4), of the CRD6, which inserts

text: Article 4

text: a in Directive

text: 11 See judgment of the Court of Justice of 29 April 2004, Commission v Council,

text: , ECLI:EU:C:2004:253, paragraphs 57 and 58; and judgment of the Court of Justice of 10 January 2006, Commission v Parliament and Council,

text: , ECLI:EU:C:2006:4, paragraphs 43 to 60.

text: 12 See also paragraph 2.6.2 of Opinion

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

text: 13 See

text: Article 4

text: a(2), fourth subparagraph, of Directive

text: , as inserted by the CRD6. This acknowledgement refers directly to the dismissal requirements included in

text: Article 4(2)

text: , second subparagraph, of the CRD6. 2.2 Specific observations 2.2.1 The Single Code applies among others to the members of the Supervisory Board of the ECB when exercising their functions as members of a high-level ECB body. It also applies to persons replacing the members in meetings of the Supervisory Board (hereinafter the ‘alternates’) in the performance of their duties and responsibilities relating to that high-level body where explicitly provided for in the Single Code. 2.2.2 The Single Code, insofar as it refers to the members of the Supervisory Board, is to be seen as ensuring the independence of the national competent authorities under the SSM Regulation. In this respect, the SSM Regulation requires the ECB, in cooperation with the national competent authorities, to: (a) establish and maintain comprehensive and formal procedures including ethics procedures and proportionate periods to assess in advance and prevent possible conflicts of interest resulting from subsequent employment within two years of members of the Supervisory Board; and (b) provide for appropriate disclosures. The procedures are without prejudice to the application of stricter national rules . 2.2.3 The ECB notes that the maximum 12-month cooling-off periods introduced by the first draft law are less restrictive compared to the requirements of the Single Code. The ECB highlights that the first draft law should be without prejudice to the Single Code as it may be amended from time to time. Furthermore, the draft law must not prevent the possibility of imposing and extending a cooling-off period of a maximum of two years for the Fin-FSA's representative in the Supervisory Board, in line with the Single Code . 2.2.4 In addition, the Single Code imposes restrictions on the establishment of post-employment relationships not only directly with significant or less significant credit institutions or other financial institutions, but also with ‘any entity engaged in lobbying in relation to the ECB, or consultancy and/or advocacy for the ECB or for any [supervised] institution’ . The first draft law follows a different structure with respect to the categories of entities compared to the Single Code. For example, while the Single Code imposes restrictions for post-employment relationships with ‘other financial institutions’, the first draft law does not include such a category. However, it does include a category for competitors of supervised entities. Furthermore, while both the Single Code and the first draft law include a category for entities carrying out lobbying and advocacy activities, the definitions of these categories are not identical. The first draft law refers to entities engaged in consultancy or advocacy on ‘matter for which the person was responsible for during the employment’ . The ECB notes that, in this respect as well, the first draft law must be interpreted without prejudice to the Single Code as it may be amended from time to time. 2.2.5 The Single Code also contains rules, inter alia, on private financial transactions and declarations of interests , which are more restrictive than the provisions of the first draft law. The ECB notes that the application of the less restrictive provisions of the first draft law would be without prejudice to the

text: 14 See

text: Article 2.2

text: . of the Single Code.

text: 15 See

text: Article 17.3

text: , point (b), of the Single Code.

text: 16 See Article 17.1 and 17.2 of the Single Code.

text: 17 Proposed Section 17b, Subsection 1 of the Law on the Financial Supervisory Authority.

text: 18 See Articles 10 and 16 of the Single Code. application of the stricter rules of the Single Code to those individuals who are subject to the Single Code. 2.2.6 National competent authorities, including the Fin-FSA, are required to take the necessary measures to implement and comply with Guideline

text: (EU) 2021/2256

text: (EU) 2021/2256

text: requires national competent authorities to have mechanisms in place to assess and avoid possible conflicts of interest arising from post-employment occupational activities undertaken by their members of staff and the members of their bodies, including appropriate cooling-off periods . In this context, the ECB notes that the first draft law provides the legal basis for cooling-off periods for the Director-General, Board members and staff members.

text: 3. Observations on the second draft law

text: 3.1 General observations 3.1.1 Article 130 of the Treaty and Article 7 of the Statute of the European System of Central Banks and the European Central Bank (hereinafter the ‘Statute of the ESCB’) addresses the question of central bank independence , stipulating that when exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB, neither the ECB, nor a national central bank (NCB), nor any member of their decision-making bodies are to seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a Member State or from any other body. This independence was thus entrusted to the ECB by primary law. 3.1.2 Based on considerations of central bank independence, and in order to ensure the independence of NCBs such as Suomen Pankki when exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB, the ECB has established an ethics framework. This includes the Single Code, which applies, among others, to the members of the Governing Council of the ECB when exercising their functions as members of a high-level ECB body, and Guideline (EU) [2021/2253] of the European Central Bank , which is addressed to the NCBs of the Eurosystem and establishes ethics requirements applicable to the members of the decisionmaking bodies and staff of the NCBs. 3.1.3 The NCBs, as an integral part of the ESCB, must act in accordance with the guidelines of the ECB . Hence, national legislation is without prejudice to the ethics framework which the ECB has established in order to ensure the independence of the ECB and the NCBs when exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB, as both frameworks have their own scope and legal basis. 3.2 Specific observations

text: 20 Regarding the doctrine of the ECB as to the independence it all its ramifications see the ECB Convergence Report 2025, Section 2.2. Available on the ECB’s website at www.ecb.europa.eu.

text: 21 Guideline (EU) [2021/2253] of the European Central Bank of 2 November 2021 laying down the principles of the Eurosystem Ethics Framework (ECB/2021/49) (OJ L 454, 17.12.2021, p. 7, ELI: http://data.europa.eu/eli/guideline/2021/2253/oj).

text: 22 See

text: Article 14.3

text: . of the Statute of the ESCB. 3.2.1 The Single Code applies among others to the members of the Governing Council of the ECB when exercising their functions as members of a high-level ECB body. It also applies to persons replacing the members in meetings of the Governing Council (hereinafter the ‘alternates’) in the performance of their duties and responsibilities relating to these high-level bodies where explicitly provided for in the Single Code . It also covers representatives of NCBs, where the national competent authority is not the NCB, participating in meetings of the Supervisory Board. The Single Code is without prejudice to stricter ethical rules under national law . 3.2.2 The ECB notes that the maximum 12-month cooling-off period applicable to the Suomen Pankki Board members under the second draft law is less restrictive than the requirements of the Single Code. The ECB highlights that the draft law should be without prejudice to the Single Code as it may be amended from time to time and must not prevent the possibility of imposing and extending a cooling-off period of a maximum of two years when such an extended period is applied based on the Single Code . 3.2.3 In addition, the Single Code sets limits on the establishment of post-employment relationships, not only directly with significant or less significant credit institutions or other financial institutions, but also with ‘any entity engaged in lobbying in relation to the ECB, or consultancy and/or advocacy for the ECB or for any [supervised] institution’ . From this perspective, the cooling-in regime under the second draft law appears to introduce more restrictive rules than those contained in the Single Code since under the second draft law the cooling-off period could be applied regardless of the type of entity with which the post-employment relationship is established. However, on the other hand, the second draft law requires that the cooling-off contract can only be concluded and applied if the person in their work position has access to confidential information which may be materially used in a new employment relationship or activity either for their own benefit or that of another person, or to the detriment of another person. The cooling-off rules of the Single Code do not contain such a condition, and the second draft law must also be interpreted without prejudice to the Single Code, as it may be amended from time to time, in this respect.

text: 23 See Article 1.1 of the Single Code.

text: 24 See Article 1.2 of the Single Code.

text: 25 See Article 2.2 of the Single Code.

text: 26 See

text: Article 17.3

text: , point (b), of the Single Code.

text: 27 See Article 17.1 and 17.2 of the Single Code. 3.2.4 NCBs, including Suomen Pankki, are required to take the necessary measures to implement and comply with Guideline (EU) [2021/2253] and must inform the ECB of any obstacles posed by national law to their implementation. Regarding the cooling-off period, Guideline (EU) [2021/2253] requires NCBs to have mechanisms in place to assess and avoid possible conflicts of interest arising from post-employment occupational activities undertaken by their members of staff and the members of their bodies, including appropriate cooling-off periods . In this context, the ECB notes that the second draft law provides Suomen Pankki with the legal basis for concluding cooling-off contracts with Board and staff members. This opinion will be published on EUR-Lex. Done at Frankfurt am Main, 4 August 2025. [signed] The President of the ECB Christine LAGARDE

type: vagledning

utgivare: ecb


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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42, ELI: http://data.europa.eu/eli/dec/1998/415/oj).

text: See Article 43.2 of the Statute of the European System of Central Banks and of the European Central Bank.

text: See paragraph 3.1.4 of Opinion

text: See Narodowy Bank Polski, Financial Stability Report, June 2025, Box 2.2, pp. 49-52, available on NBP’s website at www.nbp.pl.

text: See Opinion

text: The ECB has previously opined on draft legislation introducing taxes applicable to credit institutions in several Member States. See, for example, Opinions

text: and

text: See, for example, paragraph 3.2.2 of Opinion

text: , paragraph 3.3 of Opinion

text: , paragraph 2.2 of Opinion

text: , paragraph 2 of Opinion

text: and paragraph 2.1 of Opinion

text: See letter of Marcin Mikołajczyk, Deputy Chairperson, Polish Financial Supervision Authority, to Hołownia Szymon, Marshall of the Sejm, p. 2 (30 May, 2025), available on Sejm’s website at www.sejm.gov.pl.

text: See Narodowy Bank Polski, Financial Stability Report, June 2025, Box 2.2, p. 49, available on NBP’s website at www.nbp.pl.

title: Opinion of the European Central Bank of 5 August 2025 on a tax on certain financial institutions (CON/2025/20)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 5 August 2025 on a tax on certain financial institutions (

text: ) Introduction and legal basis

text: On 28 May 2025 the European Central Bank (ECB) received a request from the Polish Parliament for an opinion on a draft law amending the Law on tax on certain financial institutions (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and Article 2(1), sixth indent, of

text: Council Decision 98/415/EC

text: , as the draft law relates to rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets, and the ECB’s tasks concerning the prudential supervision of credit institutions pursuant to Article 127(6) of the Treaty. In accordance with

text: Article 17.5

text: , first sentence, 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 introduces a tax incentive aimed at lowering interest rate margins applicable to mortgage loans in Poland. According to the explanatory memorandum accompanying the draft law, such margins are high. Relying on ECB data, the explanatory memorandum states that in February 2025 the mortgage margin in Poland was 3,54 %, making it the highest among all Union Member States. According to the explanatory memorandum, the collection of high margins makes it difficult, sometimes even impossible, for Polish families to meet their basic housing needs. 1.2 To that end, the draft law proposes to amend the Law on tax on certain financial institutions. The Law imposes an obligation on certain financial and insurance institutions, including credit institutions, to pay a special monthly tax (hereinafter the ‘proposed tax’) amounting to 0,0366 % of the tax base, which is composed of an institution’s assets, subject to certain exemptions, thresholds and deductions. According to the draft law, for the part of the tax base that is composed of assets in the form of mortgage loans, the proposed tax is to be calculated as 0,055 % of the tax base per month multiplied by the weighted average interest margin of mortgage loans granted by the taxpayer expressed in percentage points less 1. The draft law further specifies that if the mortgage interest margin is 1 percentage point or less such assets are exempt from the proposed tax. Margin is calculated as the effective annual interest rate reduced by the three-month Warsaw Interbank Offered Rate (3M WIBOR). In the case of mortgage loans with a periodically fixed interest rate, the

text: margin for the entire period is to be determined on the basis of its amount on the day starting the period. 1.3 According to the explanatory memorandum accompanying the draft law, the amendments proposed by the draft law should translate into a reduction in the margin above 3M WIBOR to 1 %, as values above this level would be taxed at a marginal rate of 85 % (66 % in the form of a tax on certain financial institutions and 19 % in the form of corporate income tax), thus nullifying the economic sense of the application of higher margins by banks. 1.4 The explanatory memorandum accompanying the draft law also states that the costs of tax reduction for some assets should be offset by the increased taxes that will be imposed on other assets. 1.5 The proposed tax is to apply to (1) domestic banks; (2) Polish branches of banks incorporated outside of the Union; (3) Polish branches of Union credit institutions; and (4) credit unions. 1.6 The proposed date of entry into force of the draft law is 1 January 2026.

text: 2. General observations

text: 2.1 The ECB notes that Poland is a Member State with a derogation from participation in the third stage of economic and monetary union, and that the central banks of Member States with a derogation retain their powers in the field of monetary policy according to national law . Against this backdrop, the ECB refrains from commenting on the monetary policy implications of the draft law. 2.2 As previously noted by the ECB , Article 119(1) of the Treaty provides that Member States’ economic policies must be conducted in accordance with the principle of an open market economy with free competition. The ECB is as a rule not in favour of the regulation of interest rates charged by credit institutions, as further set out in paragraph 3, and more generally because such regulation would, under normal circumstances, diverge from basic economic and market principles. 2.3 With respect to the ECB data quoted in the explanatory memorandum accompanying the draft law, the ECB notes that in its recent Financial Stability Report Narodowy Bank Polski (NBP) specifically analysed the level of credit margins on housing loans in Poland versus the Union . NBP concluded that credit margins in Poland are currently below the long-term national average. In addition, whilst they remain higher than the average in other Union Member States, this is partly due to factors specific to the Polish banking sector, namely the tax on bank assets and the cost of early prepayment risk. In Poland, the expected cost of early prepayment is included in the credit margin at the time the loan is granted and applies to all borrowers, not only those who prepay their loans. Taking all of this into account, in NBP’s view, the margins do not differ significantly from the Union average, although they are indeed higher. 2.4 Given the statement in the explanatory memorandum accompanying the draft law that the costs of tax reduction for some assets should be offset by the increased taxes that will be imposed on other

text: assets, the ECB understands that the draft law is intended to apply not only to future mortgage loans, but also to outstanding mortgage loans (see also paragraph 4.5 below). 2.5 Finally, the ECB recalls that it was previously consulted by the Polish Parliament and adopted an opinion on the Law on tax on certain financial institutions .

text: 3. Financial stability and prudential supervisory considerations

text: 3.1 The ECB acknowledges that taxes of similar type to the proposed tax are sometimes justified given the social costs of high interest rates on households. High borrowing costs can impose strain on households, limiting their access to housing and other essential services. By incentivising lower interest rates margins, such taxes are intended to facilitate access to housing and support broader economic activity. Nonetheless, the ECB underlines the importance of balancing these social objectives against the potential adverse effects on the banking sector and on financial stability. A stable financial system is a prerequisite for sustainable economic growth and effective monetary policy. 3.2 In particular, the proposed tax may affect the profitability of banks and, over time, their solvency position. A reduction in profitability undermines banks’ ability to build additional capital buffers and adequately provision for impairments, especially during periods of economic uncertainty. Over time, this erosion may weaken the sector’s solvency, reduce its ability to extend credit, and hinder its capacity to weather economic shocks . Moreover, the proposed tax could increase the market cost of debt and the cost of capital for banks by imposing an additional financial burden on them. Such a development could ripple through the financial system, potentially leading to tighter credit conditions for businesses and households, reduced access to funding, and potentially adverse effects on broader economic growth. 3.3 While the proposed tax aims to reduce borrowing costs for households, its actual impact is uncertain and could vary significantly. On the one hand, the proposed tax could curtail lending to some categories of borrowers or increase interest rate margins. For instance, if banks perceive that the risks and costs associated with lending—such as operational expenses and potential credit losses— are not adequately compensated, they may reduce their willingness to provide mortgage loans altogether. Alternatively, banks might raise interest rate margins beyond pre-tax levels to ensure the after-tax margin covers their costs. Banks may also select the least risky borrowers, excluding riskier households from the mortgage market. These unintended consequences could lead to the proposed tax having the opposite effect to its intended goal and restricting access to credit for many households. On the other hand, if the proposed tax succeeds in lowering lending spreads and borrowing costs, it could incentivise borrowing by riskier households, potentially weakening credit standards and exposing banks to greater credit risks. This, in turn, could heighten financial stability concerns, particularly during economic downturns. These contrasting outcomes highlight the complexity and unpredictability of the proposed tax’s effects. They underscore the need for a

text: comprehensive impact assessment and ongoing monitoring to ensure the measure balances its social objectives with the stability of the financial system, as mentioned below. 3.4 At the same time, the limit on the profitability of a core business activity of the banking system, such as mortgage lending, might induce distortions in the banking sector depending on credit institutions’ business models and their involvement in mortgage lending versus other activities. These distortions could lead banks to engage in risk-taking behaviour in other business segments, adversely impacting the efficient allocation of credit in the economy and financial stability. 3.5 While providing a direct incentive mechanism to lower lending spreads, the Polish legislator is invited to consider alternative policies. For example, more targeted mechanisms are available to support housing for low-income households. For instance, governments could adopt fiscal policies that specifically target vulnerable groups, such as providing interest rate subsidies or direct financial assistance to lower-income families. These measures would avoid distortions in the banking sector while achieving the desired social outcomes more effectively. If well-targeted, these policies should not lead to an increase in residential property prices or exacerbate the unaffordability of homes. Additionally, favouring competition in the banking sector should also lead to lower spreads, thus reducing borrowing costs for households and businesses and making credit more accessible. Hence, policies that promote a competitive banking environment (e.g. reducing barriers to entry, promoting financial innovation, and enhancing transparency on pricing) may achieve similar objectives as taxation without the potential for distortion that taxation measures entail. 3.6 The ECB has consistently advised that the introduction of special taxes on banks or financial institutions should be preceded by a comprehensive impact assessment . The implementation of the draft law could entail financial costs for the Polish banking sector. The explanatory memorandum accompanying the draft law does not contain an impact assessment regarding the profitability, capitalisation and future lending capacity of the banking sector. This is crucial to mitigate unintended consequences and to ensure that the proposed tax achieves its intended objectives without harming the broader economy. At a minimum, the ECB recommends careful monitoring and assessment of the effects of such taxes on lending growth, state revenues, credit risk profiles, and the overall banking sector. This monitoring should be ongoing, allowing for timely adjustments if negative outcomes begin to materialise.

text: 4. Specific observations

text: 4.1 The draft law refers to the weighted average interest margin of mortgage loans granted by the taxpayer in the calculation of the proposed tax. The Polish legislator is invited to consider whether reference should be made to the weighted average interest margin of mortgage loans granted by the taxpayer during a specified reference period . 4.2 The draft law appears to apply to mortgage loans denominated in any currency, including Polish zloty (PLN). The Polish legislator is invited to consider whether the margin should be calculated under the

text: draft law as the effective annual interest rate reduced by 3M WIBOR in the case of mortgage loans not denominated in PLN . 4.3 The ECB understands that the 3M WIBOR or six-month WIBOR is usually used as a benchmark for floating-rate PLN-denominated loans in the Polish market. In the case of periodically fixed rate loans, where instalments do not change during the agreed period (usually of five years), the ECB understands that the interest rate is set on the basis of the benchmark reflecting the average level of interest rates expected by the market during that period, i.e. five-year interest rate swaps . Against this backdrop, the Polish legislator is invited to consider whether it is appropriate that margin should be calculated under the draft law as the effective annual interest rate reduced by 3M WIBOR for all mortgage loans denominated in PLN. 4.4 Although the main purpose of the draft law is to reduce margins on mortgage loans for housing purposes, the draft law does not specify that only such mortgage loans (and not mortgage loans for commercial purposes) fall within its scope. The Polish legislator is invited to consider this point. 4.5 Finally, the draft law should explicitly specify whether it applies to loans which are currently outstanding, or whether it only applies to future loans. Applying the proposed tax to existing loans could create significant challenges, as banks cannot adjust margins on loans that have already been issued. Such an approach could further strain banks’ financial positions and create legal uncertainties, undermining the predictability of the regulatory framework.

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

text: Done at Frankfurt am Main, 5 August 2025.

text: [signed]

text: The President of the ECB

text: Christine LAGARDE


title: Opinion of the European Central Bank of 11 August 2025 on limits to cash payments and limitations on their acceptance in respect of court and administrative fees (CON/2025/21)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 11 August 2025 on limits to cash payments and limitations on their acceptance in respect of court and administrative fees (

text: ) Introduction and legal basis

text: On 1 July 2025 the European Central Bank (ECB) received a request from Minister for Finance of the Slovak Republic for an opinion on a draft law amending and supplementing the Law of the Slovak National Council No. 71/1992 on court fees and fees for criminal records extracts, as amended, and amending and supplementing certain laws in relation to payment methods and the payment system (hereinafter ‘the draft law’) . The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the first and second indents of

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

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

text: 1. Purpose of the draft law

text: 1.1 The draft law, among others, amends: (a) the Law of the Slovak National Council No. 71/1992 on court fees and fees for criminal records extracts (hereinafter ‘the Law on court fees’); and (b) the Law of National Council of Slovak Republic No. 145/1995 on administrative fees (hereinafter ‘the Law on administrative fees’), to allow payment of court fees, fees for extracts from the criminal register and administrative fees (hereinafter the ‘court and administrative fees’) not only through the central system for recording fees that is operated by a 100 % state-owned legal entity, – currently Slovenská pošta a.s. (Slovak Post) – but also through the central system for recording State Treasury fees. 1.2 The draft law, among others, restates provisions of the Law on court fees and the Law on administrative fees which provide that court and administrative fees may be paid in cash, or by payment card, postal slip or transfer from an account with a payment service provider. The draft

text: 1 Návrh zákona ktorým sa mení a dopĺňa zákon Slovenskej národnej rady č. 71/1992 Zb. o súdnych poplatkoch a poplatku za výpis z registra trestov v znení neskorších predpisov a ktorým sa menia a dopĺňajú niektoré zákony.

text: 2 Council Decision of 29 June 1998 on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42, ELI: http://data.europa.eu/eli/dec/1998/415/oj).

text: 3 Zákon Slovenskej národnej rady č. 71/1992 Zb. z 28. januára 1991 o súdnych poplatkoch a poplatku za výpis z registra trestov v znení neskorších prepdisov.

text: 4 Zákon Národnej rady Slovenskej republiky č. 145/1995 Z.z. z 22. júna 1995 o správnych poplatkoch v znení neskorších predpisov. law also maintains the current limit of EUR 300 on cash payments of court and administrative fees and does not provide for any exceptions. The ECB understands that currently, the Law on court fees allows for a very limited exception to the EUR 300 limit in the case of first registration of joint stock companies. In addition, the draft law clarifies that payment of court and administrative fees in cash or by payment card at the court, the court administration, or the prosecution or administrative authority, may be only made if the relevant authority possesses technical means to accept such payments.

text: 2. General observations

text: 2.1 The ECB has not been consulted before now on, or in relation to, the Law on court fees or the Law on administrative fees. 2.2 Cash plays an important role in society. Euro cash has legal tender status and should be generally accepted as a means of payment. As the ECB has noted previously, cash is secure, widely accepted, fast and facilitates control over the payer’s spending. Moreover, it is the only payment instrument that allows citizens to settle a transaction in central bank money, which is also settled instantly, while ensuring privacy . In addition, the ability to pay in cash remains particularly important for certain groups in society that, for various legitimate reasons, prefer to use cash rather than other payment instruments, or do not have access to the banking system and electronic means of payments. These groups include not only elderly people, but also some disabled citizens, immigrants, socially vulnerable citizens, minors and others with limited or no access to digital payment services . Against this backdrop, the ECB closely monitors any national law developments that aim to limit cash payment possibilities for natural or legal persons and thereby interfere with citizens' right to pay in cash. 2.3 Under the Treaty, the European System of Central Banks has the basic task of promoting the smooth operation of payment systems , and the ECB has the exclusive right to authorise the issue of euro banknotes within the Union . The euro banknotes issued by the ECB and the national central banks of the euro area are the only banknotes with legal tender status within the euro area . 2.4 The concept of ‘legal tender’ of a means of payment denominated in a currency unit has been considered by the Court of Justice of the European Union. In particular, the Court has clarified that the concept of ‘legal tender’ signifies that this specific means of payment cannot generally be refused in settlement of a debt, denominated in the same currency unit at its full-face value, with the effect of discharging the debt. In clarifying the concept of ‘legal tender’ under Union law, the Court has taken into consideration Commission Recommendation 2010/191 of 22 March 2010 on

text: 5 See Article 9(1) of the Law on court fees in conjunction with item 17 of the Annex thereto. The fee for the first registration of joint stock companies is EUR 550.

text: 6 See paragraph 2.4 of Opinion

text: ; paragraph 2.1 of Opinion

text: ; paragraph 9.2.1 of Opinion

text: ; paragraph 2.3 of Opinion

text: ; paragraph 7.2.1 of Opinion

text: ; paragraph 2.1 of

text: ; and paragraph 2.1 of

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

text: 7 See paragraph 1.5 of Opinion

text: and paragraph 2.1 of

text: 8 Article 127(2) of the Treaty and Article 3.1 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’). the scope and effects of legal tender of euro banknotes and coins , which provides useful guidance for the interpretation of the relevant provisions of Union law. Point 1 of Recommendation 2010/191 states that, where a payment obligation exists, the legal tender of euro banknotes and coins should imply: (a) mandatory acceptance of those banknotes and coins; (b) their acceptance at full face value; and (c) their power to discharge from payment obligations. According to the Court, this shows that the concept of ‘legal tender’ encompasses, inter alia, an obligation in principle to accept banknotes and coins denominated in euro for payment purposes . 2.5 Insofar as it allows the Union legislature to lay down the measures necessary for the use of the euro as the single currency, the Court clarified that Article 133 of the Treaty empowers the Union legislature alone to specify the legal rules governing the status of legal tender accorded to banknotes and coins denominated in euro, insofar as that is necessary for the use of the euro as the single currency. Such exclusive competence precludes any competence on the part of the Member States in the matter, unless they have been empowered by the Union to do so or for the implementation of Union acts . 2.6 However, the Court further clarified that the status of legal tender calls only for acceptance in principle of banknotes and coins denominated in euro as a means of payment, not for absolute acceptance. The Union’s exclusive competence in matters of monetary policy is without prejudice to the competence of the Member States whose currency is the euro to regulate the procedures for settling pecuniary obligations, which do not affect the principle that, as a general rule, it must be possible to discharge a payment obligation in cash. Thus, that exclusive competence does not prevent a Member State from adopting a measure falling within one of the Member State’s competences; for instance, a Member State may, based on its competence to regulate administrative procedures, oblige the public administration to accept cash payments from citizens. Neither does it prevent a Member State, in the exercise of its own powers, from introducing, on legitimate public interest grounds, a derogation from that obligation for statutorily imposed payments, subject to compliance with certain conditions. In particular, the obligation to accept euro banknotes and coins may, in principle, be restricted by the Member States for reasons of public interest and subject to the principle of proportionality. This means that any such restrictions must be proportionate to the public interest objective pursued. When limiting the possibility, recognised by Union law, of generally discharging a payment obligation in banknotes and coins denominated in euro, Member States must ensure that any measures comply with the principle of proportionality, which requires in particular that they are appropriate for achieving the legitimate objectives pursued by the legislation at issue and do not go beyond what is necessary in order to achieve those objectives . 2.7 The Court has established that restrictions of the legal tender status of euro banknotes in particular require that the legislation: (a) does not have the object or effect of establishing legal rules

text: 11 OJ L 83, 30.3.2010, p. 70, ELI: http://data.europa.eu/eli/reco/2010/191/oj.

text: 12 See judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk,

text: and

text: , ECLI:EU:C:2021:63, paragraphs 46 to 49.

text: 13 See judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk,

text: and

text: , ECLI:EU:C:2021:63, paragraphs 50 to 52.

text: 14 See judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk,

text: and

text: , ECLI:EU:C:2021:63, paragraphs 55 to 56 and 67 to 70. governing the status of legal tender of euro banknotes; (b) does not lead, in law or in fact, to abolition of those banknotes, in particular by calling into question the possibility, as a general rule, of discharging a payment obligation in cash; (c) has been adopted for reasons of public interest; (d) only entails a limitation on payments in cash that is appropriate for attaining the public interest objective pursued; and (v) only entails a limitation on payments in cash that does not go beyond what is necessary in order to achieve the public interest objective . 2.8 Regarding the proportionality of a restriction of the legal tender status of euro banknotes, the Court requires not only that the measure is appropriate for attaining the public interest objective pursued, but also that it must not go beyond what is necessary in order to achieve that objective. The ECB has undertaken additional reflection in its opinions with respect to whether limitations may be considered proportionate . In particular, the ECB has noted that the broader and more general a limitation is, the stricter should be the interpretation of the requirement for the limitation to be proportionate to the objective pursued. When considering whether a limitation is proportionate, the adverse impact of the limitation in question and whether alternative measures could be adopted that would fulfil the relevant objective with a less adverse impact should always be considered .

text: 3. Specific observations

text: 3.1 Although the draft law retains the general limit on cash payments, the submission report and explanatory memorandum accompanying the draft law do not provide an analysis of the public interest in maintaining such a relatively low limit, nor do they explain why the limit of EUR 300 is proportionate to the public interest pursued. 3.2 The ECB understands from the implicit references in the explanatory memorandum that the public interest could lie in preventing excessive operational costs of administering large sum cash payments. In this regard, while the Court has accepted that it is in the public interest that monetary debts to public authorities may be honoured in a way that does not involve those authorities in unreasonable expense which would prevent them from providing services cost-effectively , the ECB considers that the consulting authority has not sufficiently demonstrated that the courts, court administrations, or prosecution or administrative authorities would incur unreasonable expenses in accepting cash payments above EUR 300. 3.3 In this context, the cash payment limit of EUR 300 must be proportionate in light of the public interest objective pursued. The consulting authority has not provided in the background documentation to the draft law any estimate of the proportion of court and administrative fees that could not be paid in cash where the limit of EUR 300 applies. For example, the court fees schedule in the Annex to the Law on court fees specifies a significant number of court fees that are

text: 15 See judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk,

text: and

text: , ECLI:EU:C:2021:63, paragraph 78.

text: 16 See paragraph 4 of Opinion

text: of the European Central Bank of 16 February 2022 on a proposal for a directive and a regulation on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing (OJ C 210, 25.5.2022, p. 15).

text: 17 See paragraph 2.7 of Opinion

text: 18 See judgment of the Court of Justice of 26 January 2021, Hessischer Rundfunk,

text: and

text: , ECLI:EU:C:2021:63, paragraph 73. determined as a percentage of the value of the subject matter of the dispute , or that are set at above EUR 300. 3.4 The ECB also understands that the draft law allows the courts, court administrations, and prosecution and administrative authorities to refuse to accept payment of court and administrative fees in cash or by a payment card in cases where they do not have technical means (technické podmienky) to accept such payments. The explanatory memorandum explains that ‘technical means’ are to be understood to include: (a) in the case of card payments, a mix of technical means that allow the administrative body to accept payment by card (generally a point-of-sale (POS) terminal); and (b) in the case of cash payments, a cash desk and the operational support (employee liability for cash handling, cash management system) and security support (cash register, safe, security devices). The explanatory memorandum explains this limitation on the acceptance of cash and card payments by referring to the need for effectiveness and consideration of costs. 3.5 While it is true, as noted in paragraph 3.2, that the Court has accepted that it is in the public interest that monetary debts to public authorities may be honoured in a way that does not involve those authorities in unreasonable expense which would prevent them from providing services costeffectively, the ECB considers that allowing public authorities to refuse cash payments altogether by deciding not to establish the technical means for their acceptance, without any further guidance from the public authorities, cannot be considered a proportionate restriction on payments in cash as legal tender. In particular, the provisions set out in the draft law could lead to an overall refusal by courts, court administrations, and prosecution and administrative authorities to accept payments of court and administrative fees in cash on the basis of cost-cutting considerations. 3.6 In the same vein, a decision not to establish the technical means for acceptance of payments by payment card, without any further guidance from the public authorities, should not disproportionately obstruct the intention of the law to enable payments by payment card as one of the available payment options. 3.7 The ECB also notes that when proposing legislation in the field of retail payments, it is advisable that it is drafted using technology-neutral language, to allow for its application to new forms of payment in the future. 3.8 Finally, in the statement accompanying the draft law, the Ministry of Finance states that the limit of EUR 300 on cash payments and the ability to refuse cash payments where technical means are not available, as provided for in the draft law, only apply to payments in cash at the premises of the courts, court administrations, and prosecution and administrative authorities. The Ministry of Finance’s position is that it will be possible for payees to continue to pay court and administrative fees of up to EUR 15 000 in cash either by making use of a postal slip at a branch of Slovak Post, or by making a cash deposit in a bank to the account of Slovak Post or the State Treasury. The ECB considers, however, that since payment by use of a postal slip or by cash deposit are, or may be, subject to additional fees, these payment methods cannot be considered as equivalent to the acceptance of cash payments in euro banknotes and coins as legal tender.

text: 19 See for example Item 1a of the Annex to the Law on court fees which specifies that the court fee is 6 % of the subject matter of the dispute. In such a case, if the value of the subject matter of the dispute is above EUR 5 000, the court fee would be higher than EUR 300 and so could not be paid in cash. 3.9 In conclusion, the ECB considers that the Slovak authorities have not sufficiently assessed the proportionality of the limit on cash payments and the ability to refuse cash payments where technical means are not available, as proposed by the draft law. As the explanatory memorandum considers the public interest objectives only in a vague manner, and as the legislator has not provided any concrete impact assessment, it is difficult for the ECB to assess whether or not: (a) the limit of EUR 300 on the payment in cash of court and administrative fees; and (b) the rule that allows the courts, court administrations, and prosecution and administrative authorities to refuse acceptance of payment of court and administrative fees in cash or by a payment card in cases where they do not have technical means to accept such payments, could be considered proportionate in light of the public interest objectives pursued. The Slovak authorities should thus carefully consider any restrictions on cash payments, taking into account the criteria established by the Court. As noted previously by the ECB in relation to limitations on cash payments to the Social Insurance Agency, in particular, they should ensure that restrictions on cash payments are appropriate and necessary to achieve the public interests pursued and do not call into question the possibility, as a general rule, of discharging a payment obligation in legal tender . This opinion will be published on EUR-Lex. Done at Frankfurt am Main, 11 August 2025. [signed] The President of the ECB Christine LAGARDE

text: 20 See paragraph 3.8 of Opinion