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

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

text: See the ECB’s Convergence Report 2014, p. 31, and in particular paragraph 3.1.3 of Opinion

text: . All ECB Opinions are available on the ECB’s website at www.ecb.europa.eu. 3 See paragraphs 2.2 to 2.8 of Opinion

text: See Chapters II and V of the Law on the BNB.

text: See paragraph 1.3 above.

text: See paragraph 3.2.2 of ECB Opinion

text: and

text: Directive

text: of the European Parliament and of the Council of 16 April 2014 on deposit guarantee schemes

text: See

text: Article 10(8) of Directive 2014/49/EU

text: . This principle is also applied in related areas of Union law (see

text: Article 104(3) of Directive 2014/59/EU

text: of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EEC

text: , and Directives

text: and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and of the Council

text: See paragraph 3.2.2 of ECB Opinion

text: See Essential Criterion no. 3 of Principle 11 of the Basel Committee on Banking Supervision/International Association of Deposit Insurers, ‘Core Principles for Effective Deposit Insurance Systems’, December 2010.

text: See paragraph 5 of the draft law amending and supplementing the Law on the state budget of the Republic of Bulgaria 2014, available on the Bulgarian National Assembly’s website at www.parliament.bg.

title: Opinion of the European Central Bank of 9 December 2014 on amendments to the Law on the bank deposit guarantee (CON/2014/86)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 9 December 2014 on amendments to the Law on the bank deposit guarantee (

text: ) Introduction and legal basis

text: On 14 November 2014, the European Central Bank (ECB) received a request from Българска народна банка (the Bulgarian National Bank) (BNB) for an opinion on a draft law amending the Law on the bank deposit guarantee (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third and sixth indents of

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

text: 1. Purpose of the draft law

text: 1.1 The draft law amends the Law on the bank deposit guarantee by introducing new measures to address the financing of a shortfall in the financial resources of the Bulgarian Deposit Guarantee Fund (hereinafter ‘the Fund’). 1.2 Pursuant to the Law on the bank deposit guarantee, each bank is obliged to pay an annual premium to the Fund equal to 0.5 % of its total deposit base for the preceding year, as determined on an average daily basis. If there is a shortfall in the Fund’s financial resources, its board of management may decide to establish a higher annual premium of up to 1.5 % of a bank’s total deposit base. 1.3 The draft law provides that in the event that the Fund’s financial resources are insufficient to cover its liabilities under the Law on the bank deposit guarantee, its board of management must, within three days of identifying the shortfall, take a decision to cover the shortfall by increasing the annual premium up to a limit of 2 % of each bank’s total deposit base, for a period of up to 3 years. The Fund’s board of management will require the banks to make such annual premium payments in advance, within a set period of time and at an increased rate. The amount payable in advance by each bank is to be deducted from the annual premium due for the following years. The amount that

text: has been overcharged will be refunded within the time limit set out in the Law on the bank deposit guarantee. 1.4 The draft law further stipulates that, in the event of an additional shortfall after the measure described in paragraph 1.3 above has been applied, the BNB must cover the additional shortfall within 10 days. The BNB is obliged to provide a loan to the Fund in the amount required to cover this additional shortfall, at the basic interest rate applicable at that time. The loan will be provided out of the financial resources of the BNB’s Banking Department and from the BNB’s ‘reserve’. 1.5 Pursuant to the draft law, the Fund is also authorised to obtain loans from Bulgarian and foreign banks in accordance with the terms and conditions set out by its board of management. Loans obtained by the Fund may be secured on its assets, including future claims on banks for annual premiums.

text: 2. Prohibition on monetary financing

text: 2.1 The ECB underlines the importance of safeguarding compliance with the prohibition on monetary financing laid down in Article 123(1) of the Treaty. This prohibits central banks from providing overdraft facilities or any other type of credit facility to the public sector, including any financing of the public sector’s obligations vis-à-vis third parties. 2.2 The ECB has consistently emphasised that the only compatible forms of central bank financing of a national deposit guarantee scheme for credit institutions are: (a) intraday credit in line with the general rules on provision of such credit by the central bank; and (b) short-term emergency liquidity financing under strict conditions established in the ECB’s convergence reports, i.e. if such funding is short term, addresses urgent situations, systemic stability aspects are at stake and decisions are 2 3 at the central bank’s discretion . Provisions to this effect need to be inserted into the draft law . The draft law does not contain such conditions and makes no reference to the maximum duration of a loan provided by the BNB to the Fund. Therefore, the BNB’s obligation to provide a loan to the Fund in an amount required to cover the additional shortfall in the Fund’s financial resources is incompatible with the prohibition on monetary financing.

text: 3. Central bank independence

text: 3.1 The draft law provides that the loan that the BNB is obliged to provide to the Fund should be granted from the financial resources of the BNB’s Banking Department and from the ‘reserve’. The draft law does not provide any indication as to what this ‘reserve’ contains. Furthermore, the draft law does not provide for an upper limit on the value of the loan and does not provide the BNB with the discretion to decide whether or not to grant the loan.

text: 3.2 The draft law impairs the institutional and financial independence of the BNB and may also impair its functional independence. In this respect, the following elements are relevant. First, it interferes with the investment, management and reporting of reserves, which is a task of the BNB under the Law on the BNB in order to guarantee the soundness of the national currency and the fixed exchange rate in Bulgaria . Second, depending on the amount of the loan and the period of time for which it is granted, which remain unspecified in the draft law, granting such a loan may considerably limit the financial resources available to the BNB and its reserves, posing a threat to the performance of its tasks relating to the European System of Central Banks, as well as to the stability of the currency board in Bulgaria and thus to the BNB’s price stability mandate. Third, the provision specifying the exact source within the BNB’s financial resources to be used by the BNB to grant a loan to the Fund interferes with the BNB’s powers to administer its own financial resources.

text: 4. Financing by credit institutions of a shortfall in the financial resources of the Fund

text: 4.1 The draft law provides for ex-post contributions by member banks to be paid in advance in the event that the Fund’s resources are insufficient to cover its liabilities . In this respect, an adequately funded deposit guarantee scheme provides protection for smaller depositors, while enhancing financial stability. Sound funding arrangements ensure an effective deposit guarantee and foster the maintenance of public confidence. 4.2 The ECB supports the requirement that banks pay increased annual premiums and make such payments in advance where the Fund’s available financial resources are insufficient to repay depositors. Indeed, as stated in earlier ECB opinions , an ex-ante funding scheme should also include the possibility to call on the private sector for additional financial support, as pre-collected funds from the industry may be insufficient in a crisis situation. The ECB notes that the principle of ex-post financing from the private sector should promote additional market discipline and address the risk of moral hazard. 4.3 Nevertheless, the ECB recommends that the measures described in paragraph 1.3 above should be carefully assessed as they have the potential to influence the stability of credit institutions and the banking sector. In particular, too high ex-post funding requirements might become procyclical, if required during an economic downturn. In this vein, Directive

text: of the European Parliament and of the Council , scheduled for transposition into national law by mid-2015, envisages extraordinary contributions by credit institutions of up to 0.5 % of covered deposits per calendar year, unless higher contributions are warranted due to exceptional circumstances with the consent of the competent authority . Furthermore, it contains a provision according to which the competent authority may defer, in whole or in part, a credit institution’s payment of extraordinary

text: ex-post contributions if such contributions would jeopardise its liquidity or solvency . In accordance with these observations, the ECB recommends that the powers under the draft law be exercised in a manner ensuring a well-funded deposit guarantee scheme, while preserving credit institutions’ ability to maintain sufficient liquidity and regulatory capital. 4.4 The ECB notes that additional temporary financing going beyond the ex-post contributions by the member credit institutions may be needed in a severe crisis requiring, for example, activation of deposit guarantees for a major credit institution . While the primary responsibility for adequately funding the deposit guarantee scheme should lie with the banks , opportunities for backup funding for liquidity purposes may be available, e.g. market borrowing by the Fund (possibly supported by a government guarantee) or a line of credit from the Government. The ECB understands that the authorities are currently taking steps to make available to the Fund a significant line of credit from the central budget that is secured on assets of the Fund, including future claims against banks for annual premiums .

text: Done at Frankfurt am Main, 9 December 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: See amending proposal T/2055/3. This proposal, inter alia, changes some basic elements of the draft law, such as the rules applicable to the interest rate premium and the loan contracts of customers participating in the exchange rate cap scheme.

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

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

text: Law XXXVIII of 2014 on measures to address the Supreme Court’s decision on consumer loan contracts published in Magyar Közlöny 98/2014 on 18 July 2014, see Opinion

text: ; Law XL of 2014 on the rules of settlement related to such contracts published in Magyar Közlöny 137/2014 on 6 October 2014, see Opinion

text: ; and Law LXXVIII of 2014 concerning the general terms and conditions of consumer loan contracts published in Magyar Közlöny 168/2014 on 5. December 2014, see Opinion

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

text: Uniform Decision 2/2014 of the Supreme Court of 16 June 2014. See also Decision 6/2013 of the Supreme Court of 16 December 2013.

text: Changed to 1 percentage point by amending proposal T/2055/3.

text: Changed to 4.5 percentage points by amending proposal T/2055/3.

text: Changed to 6.5 percentage points by amending proposal T/2055/3.

text: See www.mnb.hu.

text: See Law LXXVII of 2014, published in Magyar Közlöny 168/2014 on 5 December 2014.

text: For more details on these measures see Opinions

text: and

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 16 December 2014 on the conversion of foreign exchange loans (CON/2014/87)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 16 December 2014 on the conversion of foreign exchange loans (

text: ) Introduction and legal basis

type: rubrik

text: On 17 November 2014, the European Central Bank (ECB) received a request from the Hungarian Ministry of the National Economy (hereinafter ‘the consulting authority’) for an opinion on a draft law laying down the rules applicable to the conversion of foreign exchange loan contracts (hereinafter the ‘draft law’). The draft law was amended subsequent to the receipt by the ECB of the request for an opinion , but the ECB was not notified of these later amendments. The scope of the ECB’s opinion is limited to the draft law as it was submitted by the consulting authority, without the later amendments. Furthermore, the draft law was adopted by the Hungarian Parliament on 25 November 2014. The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the sixth indent of

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

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

type: stycke

text: 1 Background and purpose of the draft law

text: 1.1 This draft law is one of a series of legislative measures introduced by the Hungarian government in order to deal with foreign currency consumer loans. Unlike previous legislative measures of this nature, the draft law should not be considered as having been introduced in consequence of a particular ruling of the Hungarian Supreme Court .

text: 1.2 Under the draft law, foreign exchange and foreign exchange-based loan contracts (hereinafter ‘FX loans’) will be converted into forint, effective as of 1 February 2015, at a specific exchange rate set by the Magyar Nemzeti Bank (MNB). The conversion applies to all consumer loan contracts, including financial lease contracts denominated or based in foreign currencies, which were concluded between 1 May 2004 and 19 July 2014. 1.3 The interest rate applicable to the converted loans will be linked to the three-month Budapest Interbank Offered Rate (BUBOR). The interest rate premium must be the same as the interest rate premium applied to the original FX loan, provided that this is not lower than 2 percentage points . The draft law also introduces caps on the interest rate premium as follows: (a) the interest rate premium may not exceed 5.5 percentage points in the case of residential mortgage loans; and (b) the interest rate premium may not exceed 7 percentage points for home equity loans. The interest rate premium caps are binding and, if a bank charges an administration fee, the interest rate premium is to be reduced accordingly. Furthermore, the final amount payable in interest may not exceed the interest payable on the original FX loan. 1.4 The draft law sets the length of the interest rate period in the case of loans with fixed interest rates, and the interest rate premium period in the case of loans with interest tied to a reference rate, as follows: (a) five years if the loan maturity is greater than 16 years; (b) four years if the loan maturity is between nine years and 16 years; and (c) three years if the loan maturity is between three years and nine years. Changes to the interest rate may be made only in line with the interest rate premium alteration indicators approved by the MNB. Financial institutions may raise the applicable fees once a year only, and by no more than the previous year’s annual rate of inflation as measured by the consumer price index and published by the Hungarian Central Statistical Office. The earliest date from which this increase can take place is 1 April 2016. 1.5 Financial institutions are obliged to notify their customers about the conversion at the same time as they are notified of the settlement. The draft law also sets out the conditions under which consumers may, within 30 days of receiving notification that conversion of their FX loans is to take place, opt out of such conversion. The financial institutions concerned will need to examine whether the relevant conditions are met within 30 days of receiving an opt-out request. For such a request to be met, one of the following conditions must be fulfilled: (a) the customer’s monthly income must be in the same foreign currency and must exceed the amount repayable; (b) monthly repayments must be no higher than 10% of the monthly income of the customer; (c) the mortgage loan must be due to expire on 31 December 2015 at the latest; or (d) despite the fixed interest rate premium, the interest rate calculated in accordance with the draft law is higher than the interest rate applicable to the original FX loan or the rate applicable prior to 19 July 2014.

text: 1.6 The draft law also provides that consumers who do not favour these conditions may repay their loans and terminate their contracts in order to take out more favourable loans for refinancing purposes. 1.7 On 10 November 2014, the MNB offered euro liquidity totalling EUR 7.83 billion to commercial banks through tenders. This was done on the basis that this conversion would occur and in anticipation of that the envisaged repayment of foreign currency liabilities would result in an increased demand for foreign exchange liquidity by financial institutions which, if settled on the foreign exchange market, could trigger disturbances. According to the MNB, this measure will counteract pressures on the exchange rate for forint by providing financial institutions with euro liquidity from its own foreign exchange reserves, thereby facilitating the rapid and efficient conversion of FX loans. According to an MNB statement issued on 10 November 2014, the total hedging need of commercial banks in relation to the FX loans conversion would be around EUR 8 billion . Subsequently, the tenders referred to above covered almost the entire estimated demand for foreign exchange liquidity.

text: 2 General observations

text: The appropriate time to consult the ECB

text: The draft law was adopted by the Hungarian Parliament on 25 November 2014 , shortly after the ECB was consulted and before the ECB could adopt its opinion. As a consequence, the Parliament could not take the ECB’s views into account before adopting the draft law. The consulting authority did not indicate to the ECB that the opinion was urgent or that the draft law was to be adopted by the Hungarian Parliament under an urgency procedure. Moreover, due to amendments made to the draft law between the date of the consultation request and the date of adoption, which were not communicated to the ECB, the law as adopted differs substantially from the draft law submitted to the ECB. The Hungarian authorities have again failed to comply properly with their duty to consult the ECB. The adoption of the draft law, as amended, does not relieve the authorities of their duty to give due consideration to this opinion, in particular with regard to the application and interpretation of the draft law as adopted, as well as any future amendments thereto. The ECB would like to emphasise that, even in cases of particular urgency, or where the legislative process has reached an advanced stage, the national authorities are not relieved of their duty to consult the ECB. This should occur at an appropriate stage in the legislative process that allows sufficient time for: (a) the ECB to examine the draft legislative provisions and adopt its opinion in all required language versions; and (b) the national authorities to take into account the ECB’s views in accordance with

text: Decision

text: . The ECB would therefore appreciate it if, in future, the consulting authority would honour its obligation to consult the ECB in accordance with Decision

text: 3. Specific observations

text: 3.1 From a financial stability perspective, the conversion of FX loans should greatly reduce or even eliminate currency mismatches in households’ balance sheets, which is expected to contribute to reducing the credit risk of banks in the longer term. The ECB appreciates that the method for calculating the exchange rate to be used for the conversion of the loans in question was set with the intention of avoiding an additional significant burden on the banking sector. The ECB, moreover, takes note of the measures taken by the MNB, in agreement with the banks, in order to ensure an orderly conversion of FX loans. 3.2 On the other hand, the interest rate premium cap could have a negative effect on the future profitability of banks, thereby adding to the significant strains already faced by the banking sector. These strains have resulted, inter alia, from the measures relating to the settlement of FX loans . It should also be noted that the conversion will lead to a once-off increase in operational costs for banks in Hungary. 3.3 As regards the longer-term effects on financial stability, the ECB continues to be of the opinion that, when introducing measures in relation to settling and converting FX loans, due consideration should always be given to fair burden sharing between consumers, the financial institutions, the Hungarian Government and all authorities responsible for ensuring the stability of the financial system in Hungary. This consideration should also include foreign banking groups, whose entities manage around half of all banking assets in Hungary. As a result, the measures affecting FX loans may also have significant cross-border spill-over effects on the consolidated profits and capital positions of banking groups. In this regard, the ECB wishes to remind the Hungarian authorities that, during the past few years, losses stemming from previous government measures, including the bank levy, the financial transaction tax and the early repayment scheme for FX loans, were offset by capital injections from foreign parent undertakings to ensure the stable functioning of their subsidiaries. While this behaviour confirmed the parent banks’ longstanding commitment to the financial sector in Hungary, the possibility of longer-term negative effects on the Hungarian economy and financial markets, as a result of the legislative package referred to in paragraph 1.1 on top of the abovementioned measures, cannot be excluded at this stage.

text: This would, in turn, also adversely impact the overall macroeconomic and financial stability in Hungary. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 16 December 2014. [signed]

text: The President of the ECB

text: Mario DRAGHI

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). 2 Riigi Teataja I 1993, 28, 498. 3 Recommendation

text: of the European Systemic Risk Board of 22 December 2011 on the macro-prudential mandate of national authorities. Available on the website of the ESRB at www.esrb.europa.eu. 4 See Opinion

text: . Available on the website of the ECB at www.ecb.europa.eu.

text: Regulation (EU) No 575/2013

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

text: Regulation (EU) No 648/2012

text: (OJ L 176, 27.6.2013, p. 1). 6 Directive

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

text: and repealing Directives

text: and

text: (OJ L 176, 27.6.2013, p. 338). 7

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).

title: Opinion of the European Central Bank of 17 December 2014 on credit requirements (CON/2014/88)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 17 December 2014 on credit requirements (

text: ) Introduction and legal basis

text: On 13 November 2014 the European Central Bank (ECB) received a request from the Estonian Ministry of Finance for an opinion on the Law on credit providers and credit intermediaries (hereinafter ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

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

text: 1. Purpose of the draft law

text: The draft law relates to Eesti Pank’s powers to specify loan requirements. The primary aim of the draft law is to harmonise the requirements applicable to undertakings operating in the financial market and to regulate credit provision and credit intermediation to consumers. The draft law applies to financial institutions, other than credit institutions, whose principal economic activity is credit provision. Non-bank credit providers and credit intermediaries include also lessors and deferred payment providers.

text: 2. Macro-prudential objective

text: The draft law introduces an amendment to the Law on credit institutions in order to enhance legal certainty and states expressly that the purpose of Eesti Pank’s power to specify certain loan requirements is macro-prudential supervision. 2 3 The Law on Eesti Pank implementing Recommendation

text: designates Eesti Pank as the macro-prudential authority in Estonia . This law authorises Eesti Pank to conduct macro-prudential policy at a national level. Eesti Pank has numerous instruments it can use to achieve this objective including the faculty to establish loan requirements set forth in the draft law.

text: 3. General observations

text: The ECB observes that the powers to take macro-prudential measures provided for in Regulation (EU) 5 6 No 575/2013 and Directive

text: are subject to

text: Article 5 of Regulation (EU) No 1024/2013

text: (hereinafter the ‘SSM Regulation’), which requires national competent or designated authorities to notify the ECB of their intention to take certain measures. According to Article 5(2) of the SSM Regulation, the ECB may apply more stringent measures aimed at addressing macro-prudential risks. The ECB further notes that, pursuant to Article 9(1) of the SSM Regulation, the ECB may require national competent or designated authorities, by way of instructions, to make use of their macroprudential powers where the SSM Regulation does not confer such powers on the ECB.

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

text: Done at Frankfurt am Main, 17 December 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


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

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

text: According to section 33AK(1), this includes, inter alia, the Governor and every former Governor, other current and former officials, and ‘every other officer or employee and every other former officer or employee of the [CBI]’.

text: Section 33AK(10) defines ‘supervisory EU legal acts’ as including, amongst a number of Union legal acts, Directive

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

text: and repealing Directives

text: and

text: (OJ L 176, 27.6.2013, p. 338) (hereinafter the ‘CRD IV’).

text: Directive

text: of the European Parliament and of the Council of 24 October 1995 on the protection of individuals with regard to the processing of personal data and on the free movement of such data (OJ L 281, 23.11.1995, p. 31).

text: Directive

text: of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EEC

text: , and Directives

text: and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and of the Council (OJ L 173, 12.6.2014, p. 190). 6 See the amendment proposed by section 1(b) of the draft law and section 33AK(6) of the Act of 1942. 7 Decision ECB/2004/2 of 19 February 2004 adopting the Rules of Procedure of the European Central Bank (OJ L 80, 18.3.2004, p. 33).

title: Opinion of the European Central Bank of 19 December 2014 on the disclosure of confidential information to a national parliamentary inquiry (CON/2014/89)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 19 December 2014 on the disclosure of confidential information to a national parliamentary inquiry (

text: ) Introduction and legal basis

text: On 8 December 2014, the European Central Bank (ECB) received a request from the Minister for Finance for an opinion on the Central Bank (Amendment) Bill 2014 (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third and sixth indents of

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

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

text: 1. Purpose of the draft law

text: 1.1 Section 33AK of the Central Bank Act 1942 prohibits current and former CBI officials or other employees from disclosing confidential information if such disclosure is prohibited by the Treaty, the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’) or the ‘supervisory EU legal acts’ . This confidential information is specified as: (a) the business of any person or body whether corporate or incorporate that has come to the person’s knowledge through the person’s office or employment with the CBI, or (b) any matter arising in connection with the performance of the functions of the CBI or the exercise of its powers.

text: 1.2 Subject to this provision, section 33AK also provides that the CBI may disclose confidential information in a number of different situations (hereinafter the ‘disclosure gateways’). The draft law proposes to make an addition to this list of disclosure gateways when the disclosure is to a Joint Committee of the Houses of Parliament that is conducting a specific type of inquiry for which terms of reference resolution were passed by the Lower and Upper Houses of Parliament on 25 and 26 November 2014. In effect, this gateway solely relates to disclosures to the Joint Committee of Inquiry into the Banking Crisis. 1.3 The draft law provides that disclosure to the Joint Committee may only occur after the making of certain rules and standing orders (i.e. parliamentary rules) which impose a sanction on a member of either House of Parliament to whom confidential information is provided for failure to comply with the provisions on professional secrecy referred to in section 33AK(6) in respect of that information. This appears to refer to the provisions on professional secrecy in the supervisory EU legal acts. 1.4 According to the consulting authority, motions were passed in both Houses of Parliament to formally empower the Joint Committee to conduct an inquiry into the banking crisis on 26 November 2014. The Inquiry intends to begin calling witnesses before the Christmas recess.

text: 2. Disclosure of confidential information to the Inquiry

text: 2.1 The ECB understands that once the draft law is enacted, section 33AK will effectively provide that the CBI may disclose confidential information to the Inquiry in certain circumstances, subject to the obligation on current and former CBI officials and other employees not to disclose confidential information concerning the matters referred to in paragraph 1.1 above, if such is prohibited by the Treaty, the Statute of the ESCB or the supervisory EU legal acts. This proviso on disclosure does not clarify that, in accordance with Article 59(2) of the CRD IV, specific conditions, rather than prohibitions, also apply when disclosing confidential information relating to the prudential supervision of institutions to parliamentary enquiry committees in the relevant Member State: (a) the parliamentary enquiry committee must have a ‘precise mandate’ under national law; (b) the information must be ‘strictly necessary’ for fulfilling that mandate; (c) persons with access to the information are subject to professional secrecy requirements under national law at least equivalent to those referred to in Article 53(1) of the CRD IV; (d) where the information originates in another Member State, that it is not disclosed without the express agreement of the competent authorities which have disclosed it and, solely for the purposes for which those authorities gave their agreement; and (e) to the extent that the disclosure of information relating to prudential supervision involves processing of personal data, any processing by the parliamentary enquiry committee must comply with national law transposing Directive

text: of the European Parliament and of the Council . These conditions have to be

text: respected and implemented when disclosing confidential information to parliamentary enquiry committees. Furthermore, under Directive

text: of the European Parliament and of the Council (the Bank Recovery and Resolution Directive, hereinafter the ‘BRRD’) the sharing of confidential information on resolution (actions, tools, plans etc.) with parliamentary enquiry committees is not wholly unrestricted. Article 84(5) of the BRRD provides that Member States may authorise the exchange of information with parliamentary enquiry committees in their Member State ‘under appropriate conditions’. Member States should take into account the general purpose behind business secrecy in this context as expressed, for example, in recital 86 of the BRRD which states that ‘… therefore [it is] necessary to ensure that there are appropriate mechanisms for maintaining the confidentiality of such information, such as the content and details of recovery and resolution plans and the result of any assessment carried out in that context’. This is relevant in view of the fact that the bulk of the BRRD’s provisions are to be implemented by Member States by 1 January 2015. 2.3 The ECB acknowledges that the disclosure gateway proposed by the draft law is subject to the condition that disclosure to the Inquiry may only occur after the making of parliamentary rules which subject a member of the Parliament to sanction in the event that the member is provided with confidential information and fails to comply with the provisions on professional secrecy in the supervisory EU legal acts . Nevertheless, the particular elements of such professional secrecy requirements within the supervisory EU legal acts are not further elaborated and it is unclear as to how the parliamentary rules will clarify these obligations of professional secrecy for the members of Parliament. 2.4 Furthermore, section 33AK(6) only refers to the provisions on professional secrecy in the supervisory EU legal acts and does not refer to the obligations under Union law in general, including the Treaty, the Statute of the ESCB and the Rules of Procedure of the European Central Bank . In this regard, the scope of section 33AK(6) should be broadened to comply with Article 37.2 of the Statute of the ESCB, according to which persons having access to data covered by Union legislation imposing an obligation of secrecy shall be subject to such legislation. To the extent that such Union legislation requires breaches of Union law, in particular breaches of professional secrecy obligations, to be subject to sanction in the Member States, any such sanctions should apply to members of Parliament having access to the confidential information.

text: 3. Source of the amendment

text: Subsection (6A) of section 33AK, as proposed to be inserted into the Central Bank Act 1942, is a provision addressed to members of Parliament rather than the CBI. It must be ensured that members of Parliament are bound by the parliamentary rules to be created under this provision, in accordance with the Irish legal system, and that members are aware of the content of such rules.

text: 4. Parliamentary privilege

text: The ECB understands that, according to Article 15.13 of the Constitution of Ireland, the members of both Houses of Parliament are not, in respect of any utterance in either House, amenable to any court or any authority other than the House itself. Sufficient safeguards must be in place to ensure that the sanctions and protections proposed by the draft law are valid and enforceable in light of this constitutional requirement.

text: Done at Frankfurt am Main, 19 December 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


title: Opinion of the European Central Bank of 22 December 2014 on disclosure of information if a bank is subject to resolution or licence revocation (CON/2014/90)

text: OPINION OF THE EUROPEAN CENTRAL BANK Of 22 December 2014 on disclosure of information if a bank is subject to resolution or licence revocation (

text: ) Introduction and legal basis

text: On 20 November 2014, the European Central Bank (ECB) received a request from Българска народна банка (Bulgarian National Bank) (BNB) for an opinion on a draft law amending and supplementing the Law on credit 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 the third and sixth indents of

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

text: 1. Purpose of the draft law

text: 1.1 The draft law is aimed at increasing transparency and public awareness in the event that a bank is subject to resolution measures or has had its banking licence revoked. 1.2 Under the draft law, BNB may instruct the conservators of a bank placed under special supervision to enter into an agreement with a company that has experience in tracking monetary transfers and receivables, as well as transactions with financial instruments . In addition, the assignee in bankruptcy is required to enter into such an agreement . 1.3 The draft law introduces a special regime requiring public disclosure of the identity of certain individuals holding deposits and loans in banks subject to resolution measures and those having their licence revoked. This requirement applies to individuals under an obligation to disclose their property, income and expenses in the country and abroad in accordance with the Law on the disclosure of property belonging to individuals occupying high-ranking state and other offices .

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

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

text: 4 See

text: Article 2

text: . 1.4 Under the draft law, prior to any deposits being paid out to a company registered in a jurisdiction with a preferential tax regime , the company must disclose the identity of its beneficial owners to the bank in question. In addition, if a company registered in a jurisdiction with a preferential tax regime has a loan that has not been serviced or is overdue, and this loan is from a bank subject to resolution measures or a bank having its licence revoked, the company is required to disclose the identity of its beneficial owners to the bank in question. The bank must publish the names of the beneficial owners of the companies in two central daily newspapers. 1.5 Furthermore, the individuals that manage and represent a bank subject to resolution measures or a bank having its license revoked must publish the names of all natural and legal persons whose bank loans have not been serviced or are overdue in two central daily newspapers .

text: 2. General observations

text: 2.1 The ECB welcomes the introduction of measures that assist in the retrieval of assets and enhance collection efforts in bank resolution. 2.2 On the proposed public disclosure of confidential information to promote transparency in bank resolution, the ECB notes that public disclosure by banks of confidential information is subject to specific disclosure obligations, exceptions and prohibitions established in Union law as well as national law . In this vein, the envisaged publication of the names of bank customers, i.e. all natural and legal persons whose loans have not been serviced or are overdue from banks in resolution (or where the bank’s licence has been revoked) needs to be balanced with privacy issues and adhere to due process. Safeguards regarding the publication of customer information should be introduced, including, for example, an assessment of whether the disclosure is proportionate and of systemic importance .

text: 3. Specific observations

text: 3.1 Tracking monetary transfers and receivables as well as transactions with financial instruments 3.1.1 Providing for a competence of BNB to enter into a service contract with specialised third parties having experience in tracking money transfers adds a specific power to the existing toolkit under the Law on credit institutions. The ECB understands that BNB is already authorised under the Law on credit institutions to issue binding instructions to the conservators in relation to their activity,

text: 5 The jurisdictions with a preferential tax regime are specified in paragraph 1, point 64 of the Additional Provisions of the Law on Corporate Income Tax.

text: 6 See paragraph 3 of the draft law introducing

text: Article 121

text: (c)(3) final line of the Law on credit institutions.

text: 7 See, for example, recital 68 and Article 442 of the

text: Regulation (EU) No 575/2013

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

text: Regulation (EU) No 648/2012

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

text: 8 See paragraph 3 of the draft law introducing

text: Article 121

text: (c) (3) final line of the Law on credit institutions.

text: 9 See Opinion

text: , paragraph 3.3.

text: 10 See paragraph 2 of the draft law amending Article 103 of the Law on credit institutions. including the delegation of some of the conservator’s powers to third parties . Whether BNB decides to exercise this right or not depends on its discretion. 3.1.2 On the proposed mandatory requirement for the assignee in bankruptcy to enter into an agreement with a company that has experience in tracking money transfers and receivables as well as transactions with financial instruments, the ECB recommends that the assignee be granted discretion to decide in each individual case whether such an agreement is necessary. 3.2 Public disclosure and information requirements concerning beneficial owners of companies 3.2.1 The ECB welcomes the requirement to ascertain the identity of the beneficial owners of companies registered in a jurisdiction with a preferential tax regime before any payouts of deposits are made. In this regard, the ECB notes that the information on the identity of the beneficial owners of companies should be readily available as part of banks’ compliance with customer due diligence requirements . The importance of enhancing transparency on beneficial ownership and adequate customer due diligence has been further emphasised in recent legislative proposals at Union level . 3.2.2 The publication of the names of the beneficial owners of companies registered in a jurisdiction with a preferential tax regime with loans that have not been serviced or are overdue at banks in resolution (or where the bank’s licence has been revoked) should be subject to appropriate safeguards as set out in paragraph 2.2 above. With respect to loans that have not been serviced or are overdue, the key concern should be to enhance collection efforts. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 22 December 2014. [signed] The President of the ECB Mario DRAGHI

text: 12 Directive

text: of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (OJ L 309, 25.11.2005, p. 15).

text: 13 See, for example,

text: Articles 11(1)

text: (b) and 12(4) of the proposal for a Directive of the European Parliament and of the Council on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing (COM(2013) 45 final).


text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 2 See Opinion

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

text: Law on the limitation of special pension arrangements, BGBl I No 46/2014; see Opinion

text: See Convergence Report 2014, p. 26.

text: See Opinion

title: Opinion of the European Central Bank of 22 December 2014 on the publication of documents and the use of the pension reserve (CON/2014/91)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 22 December 2014 on the publication of documents and the use of the pension reserve (

text: ) Introduction and legal basis

text: On 12 November 2014, the European Central Bank (ECB) received a request from the Austrian Ministry of Finance for an opinion on the draft law on the determination of weighted average yields for federal loans (UDRBG) and amending the Law on the Oesterreichische National Bank, the Law of 2010 on Sanctions and the Law of 2004 on Currency (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 on the third, fourth and fifth indent of

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

text: , as the draft law relates to the Oesterreichische National Bank (OeNB), the collection, compilation and distribution of monetary, financial, banking, payment systems and balance of payments statistics as well as 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 draft law follows on from a recent draft law opined on by the ECB . Whereas the issues consulted on before remain almost unchanged, the draft law amends further provisions of the Law on the Oesterreichische National Bank, the Law of 2010 on Sanctions and the Law of 2004 on Currency. 1.2 The draft law amends the procedure regarding the publication of OeNB official documents. Under the draft law, ordinances issued by the OeNB will be published in the Federal Law Gazette (Bundesgesetzblatt). The same shall apply to ordinances issued by the OeNB under the Law of 2004 on Currency and the Law of 2010 on Sanctions. Furthermore, the draft law entitles the OeNB to publish terms and conditions relating to its area of responsibility on its website.

text: 1.3 The draft law entitles the central bank to use data it receives in connection with one task for all other tasks assigned to it by federal law, international treaty or directly applicable Union law. However, this right of cross-functional data usage is subject to directly applicable Union law or national law and to the rules concerning Austrian banking secrecy (Section 38 of the Austrian Banking Act). Furthermore, the draft law entitles the OeNB to provide disclosing parties with a data template suitable for providing required information in a standardised, electronic form. The OeNB will publish such data templates and its technical specifications on its website. In the context of its banking supervisory tasks, the OeNB is already entitled to compile data directly from credit institutions if the Financial Market Authority does not have the requested data available. In this context, the draft law introduces an administrative penalty of up to EUR 2000 if a credit institution does not meet an OeNB request for information or knowingly provides false information. 1.4. The draft law also provides for new notification obligations for payment system operators who will have to inform the OeNB within two weeks in the event of starting or suspending operations in connection with a payment system. Furthermore, such operators have to notify the OeNB of the parties that use their payment systems as well as any changes in this regard. The draft law determines that breaches of these new notification requirements will be sanctioned with administrative penalties of up to EUR 2000. 1.5 In addition, the draft law follows up on a Law on the limitation of special pension arrangements , which enters into force on 1 January 2015. This law implements certain changes to the pension rights for OeNB employees and retirees, such as a gradual increase of the retirement age and the obligation to pay pension safeguard contributions. It is expected that the OeNB’s payment obligations in relation to its pensioners will decline due to these measures. The draft law requires the OeNB to allocate up to 10% of the OeNB’s annual profit balance to its pension reserve until it holds sufficient capital in order to ensure respective pension payments to former OeNB employees. However, should the pension reserve exceed the necessary capital on a sustained basis, the draft law suggests to partly release the excess and post the difference to the bank’s profit and loss account. The explanatory memorandum to the government bill considers an excess of funds to be sustainable if a surplus is also probable for the following year, thereby taking into account market trends and the OeNB’s expected payment obligations.

text: 2. General observations

text: The draft law further amends a draft law that the ECB has already opined on. The ECB understands that the original draft version has not yet been adopted, but has been amended further during the national legislative process. As the draft law contains provisions regarding the OeNB that have not yet been consulted on, the Austrian authorities have requested a new ECB opinion. As regards the replacement of

text: Austria’s current indicator for federal loans with the new indicator, ‘circulation weighted average yields of federal bonds’ (hereinafter ‘UDRB’), the only change in the new draft law in this respect concerns the entry into force. Instead of 1 January 2015, the UDRB will replace the current indicator for federal loans from 1 April 2015. In connection with the update of the OeNB’s appointment procedure for external auditors, the ECB notes that the draft law remains unchanged. Accordingly, the ECB comments made in its Opinion

text: remain relevant.

text: 3. Specific observations

text: Publication of documents and data collection

text: 3.1 The ECB welcomes the changes regarding the modernisation of the OeNB’s publication procedures for ordinances and terms and conditions relating to its area of responsibility. The ECB expects that this will, inter alia, facilitate the implementation of changes to the monetary policy instruments and procedures of the Eurosystem by the OeNB. 3.2 The ECB also welcomes the enabling clause for the multi-use of the data collected by the OeNB. This is in line with Union requirements to minimise the reporting burden for respondents and facilitates the coherence of information for analysis and decision making. In addition, the draft law makes provisions to ensure the protection of confidential data in line with Union and national requirements. 3.3 The ECB welcomes the OeNB’s right to provide data templates to reporting agents. However, in order to ensure consistent application of the data templates, the draft law should clearly state that the OeNB may require reporting agents to use the data templates.

text: Pension reserve

text: 3.4 In line with the principle of central bank independence, an NCB’s decision-making bodies should be able to decide on the calculation of the profits independently and professionally . With regard to profit allocation, an NCB’s statute may prescribe how its profits are to be allocated. Profits may be distributed to the State budget only after any accumulated losses from previous years have been covered and financial provisions deemed necessary to safeguard the real value of the NCB’s capital and assets have been created. Any amendment to an NCB’s profit distribution rules should only be initiated and decided in cooperation with the NCB, which is best placed to assess its required level of reserve capital. As regards financial provisions or buffers, NCBs must be free to independently create financial provisions to safeguard the real value of their capital and assets.

text: 3.5 Member States may also not prevent NCBs from building up their reserve capital to a level which is necessary for a member of the European System of Central Banks to fulfil its tasks. Additionally, to protect autonomy in staff matters, which is one aspect of the principle of financial independence, the ECB has consistently recommended in its previous opinions and in its convergence reports that any amendment to legislation on remuneration for members of an NCB’s decision-making bodies and its employees should be decided in close and effective cooperation with the NCB. This should be achieved by taking due account of the NCB’s views, to ensure the ongoing ability of it to independently carry out its tasks. Autonomy in staff matters extends to issues relating to staff pensions. 3.6 Against this background, the ECB notes that the draft law proposes a change to the calculation and profit distribution rules in relation to pension reserves. The ECB understands that a (partial) dissolution of the pension reserve may occur if sufficient funds are held in the pension reserve in compliance with these new calculation and profit distribution rules. 3.7 In line with the principle of central bank independence, the amendment proposed in the draft law should only be initiated and decided in close and effective cooperation with the OeNB, which is best placed to assess the necessary required capital in order to preserve the OeNB’s autonomy in issues related to staff pensions. Any (partial) dissolution of the pension reserve should be made with great care because, once the balance of the reserve is reduced, it may only be replenished again with future annual profits of the OeNB. Therefore, while the replenishment of the reserve is restricted to 10% of the annual profits, the release of the reserve appears to be automatic, despite the inherent volatility of the related calculations. This may mean that the speed of replenishment may be slower than needed and therefore a longer-term perspective in evaluating the sufficiency of the reserve than is currently envisaged by the explanatory memorandum to the draft law should be considered. Accordingly, it is recommended that a definition of the term sustainable (‘nachhaltig’) be inserted directly in the draft law rather than in the explanatory memorandum. Furthermore, the explanation provided in the memorandum, whereby overfunding would be sustainable if an excess of the assets over the required capital in the current and following year is probable, does not sufficiently take into account the long-term nature of pension obligations. Thus, the sufficiency of the pension reserve should be assessed over a three to five years perspective as a minimum.

text: Finally, this assessment should be carried out by an independent qualified actuary, based on actuarial assumptions that have been drawn up in consultation with the OeNB. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 22 December 2014. [signed]

text: The President of the ECB

text: Mario DRAGHI


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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 2 See IMF Press Release No 12/368, 28 September 2012. 3 See Opinion

text: for more information regarding the establishment and funding of the PRGT; all ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 4 Law 312/2004 on the Statute of Banca Naţională a României, Monitorul Oficial al României, Part I No 582, 30 June 2004.

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

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

text: and

text: b(1) of the Treaty (OJ L 332, 31.12.1993, p. 1). 6 For examples, see Opinions

text: , and

text: . 7 In particular, see paragraph 2.2 of Opinion

text: . See also paragraph 2.2 of Opinion

title: Opinion of the European Central Bank of 29 December 2014 on Romania’s contribution to the International Monetary Fund’s Poverty Reduction and Growth Trust (CON/2014/92)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 29 December 2014 on Romania’s contribution to the International Monetary Fund’s Poverty Reduction and Growth Trust (

text: ) Introduction and legal basis

text: On 27 November 2014, the European Central Bank (ECB) received a request from Banca Naţională a României (BNR) for an opinion on a draft law concerning Romania’s contribution to the General Subsidy Account of the International Monetary Fund’s Poverty Reduction and Growth Trust (PRGT) (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

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

text: 1. Purpose of the draft law

text: In February and September 2012, the Executive Board of the International Monetary Fund (IMF) approved the distribution of 700 million special drawing rights (SDRs) and 1.75 billion SDRs, respectively. This approval was the result of windfall profits from IMF gold sales and profits were distributed to IMF member countries in proportion to their quota shares . Distributions were subject to satisfactory assurances by IMF members that an amount equivalent to at least 90% of the distributions would be made available to the PRGT. The IMF thereby envisaged that further subsidy resources would be raised for the PRGT . Accordingly, the Romanian authorities decided to contribute Romania’s share of the September 2012 distribution to support the PRGT. Pursuant to the Statute of BNR , BNR has the power to exercise the rights and fulfil the obligations of Romania as a member of the IMF. Consequently, the draft law authorises BNR to transfer 7,571,246 SDRs from the IMF Interim Administered Account to the General Subsidy Account of the PRGT on behalf of Romania.

text: 2. Monetary financing prohibition

text: 2.1 The tasks performed by a national central bank must comply with the monetary financing prohibition under Article 123 of the Treaty and

text: Council Regulation (EC) No 3603/93

text: , which provisions are subject to certain exemptions detailed therein. In particular,

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

text: provides that the financing by national central banks of obligations falling upon the public sector vis-à-vis the IMF shall not be regarded as a credit facility within the meaning of Article 123 of the Treaty . 2.2 The transfer by BNR of Romania’s contribution to the PRGT, as set out in the draft law, falls under the

text: Article 7

text: exemption in

text: Regulation (EC) No 3603/93

text: and therefore should not be regarded as a form of monetary financing prohibited by Article 123(1) of the Treaty. In this regard, the draft law is similar to the Austrian legislation on the Oesterreichische Nationalbank’s contribution of windfall profits from IMF gold sales to the PRGT .

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

text: Done at Frankfurt am Main, 29 December 2014.

text: The President of the ECB

text: Mario DRAGHI


text: Bundesgesetz über die Sanierung und Abwicklung von Banken, BGBl I Nr 98/2014.

text: Directive

text: of the European Parliament and the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EC

text: , and Directives

text: and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and the Council (OJ L 173, 12.6.2014, p. 190).

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

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

text: Bundesgesetz über das Bankwesen (Bankwesengesetz), BGBl 532/1993, as amended.

text: Bundesgesetz über die Errichtung und Organisation der Finanzmarktaufsichtsbehörde (Finanzmarktaufsichtsbehördengesetz), BGBl I Nr 97/2001, as amended.

text: Bundesgesetz über das Insolvenzverfahren (Insolvenzordnung), RGBl Nr 337/1914, as amended.

text: Bundesgesetz betreffend Übernahmeangebote (Übernahmegesetz), BGBl I Nr 127/1998, as amended.

text: Bundesgesetz über die Beaufsichtigung von Wertpapierdienstleistungen (Wertpapieraufsichtsgesetz 2007), BGBl I Nr 60/2007, as amended.

text: Bankeninterventions- und -restrukturierungsgesetz, BGBl I Nr 160/2013, as amended. See Opinion

text: on crisis planning and early intervention for credit institutions. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

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

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

text: Gesetz über Gesellschaften mit beschränkter Haftung (GmbH-Gesetz), RGBl Nr 58/1906, as amended.

text: Bundesgesetz über Aktiengesellschaften (Aktiengesetz), BGBl Nr 98/1965, as amended.

title: Opinion of the European Central Bank of 9 January 2015 on applications to operate as a run-off company (CON/2015/1)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 9 January 2015 on applications to operate as a run-off company (

text: ) Introduction and legal basis

text: On 21 November 2014 the European Central Bank (ECB) received a request from the Austrian Ministry of Finance for an opinion on a draft federal law on the reorganisation and winding up of credit institutions (hereinafter the ‘draft law’) , which transposes Directive

text: of the European Parliament and the Council (hereinafter the ‘BRRD’) into Austrian 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 on the sixth indent of

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

text: , as the draft law relates to rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. 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 overall objective of the draft law is to create a framework for recovery and resolution planning of credit institutions and investment firms (hereinafter jointly referred to as ‘institutions’), and to provide an effective mechanism for their resolution, minimising risks to financial stability and the cost to the public budget. To this end, the draft law implements the BRRD and provides for 4 5 amendments to the Law on Banking , the Financial Market Supervisory Authority Act , the 6 7 8 Insolvency Ordinance , the Takeover Act and the Securities Supervision Act 2007 . The draft law

text: will replace the Banking Intervention and Restructuring Act . 1.2 The consultation request from the Austrian authorities focuses on one specific issue going beyond the implementation of the BRRD. Section 162 of the draft law permits institutions to apply to operate as a run-off company under certain conditions. The Austrian Financial Market Authority (FMA) may approve such an application if the institution (a) is no longer active on the market or no longer conducts transactions with third parties, (b) does not take in any deposits or other repayable funds from the public, (c) has put in place processes to ensure that contractual counterparties from its remaining business are kept up to date with information regarding the run-off process and receive appropriate support, and (d) has been carrying out its business prior to 31 December 2014 in accordance with a winding-up or restructuring plan approved by the European Commission under the State aid rules of the TFEU. These prerequisites must be confirmed by the institution’s auditor. The task of a run-off company is to manage its remaining assets and liabilities in order to ensure an orderly and optimal realisation of proceeds, in other words, portfolio liquidation. 1.3 When the FMA’s approval decision enters into force, the institution’s license to carry out banking transactions expires and it thereafter operates as a run-off company. A run-off company must liquidate its portfolio pursuant to a run-off plan. The management must submit annual reports on the progress of the company’s asset realisation to its supervisory board and to the resolution authority. Furthermore, a run-off company may not receive funds from the public, provide securities services or conduct investment activities. However, transactions conducted on the run-off company’s own account using financial instruments with the aim of hedging interest rate, foreign exchange, credit or liquidity risks in connection with its run-off are permitted, unless associated with market making activities or granting third parties access to trading systems (section 84(4) of the draft law). 1.4 As section 162 of the draft law only applies to institutions that have been operating under a liquidation or restructuring plan approved by the European Commission under the State aid rules prior to 31 December 2014, i.e. prior to the main deadline for implementation of the BRRD, it should be regarded as a transitional rule. It establishes a run-off scenario similar to a specific measure made available under Article 42 of the BRRD, namely the operation of an asset management vehicle under the asset separation tool. According to the explanatory memorandum accompanying the draft law, run-off companies will not be subject to the other, more general, provisions of the draft law. The difference between the regime put in place by the draft law and that of the BRRD is that under the draft law the institution itself applies to operate as a run-off company, while under the BRRD it is the authorities that must determine whether a bank is failing or likely to fail and take appropriate steps.

text: 2. General observations

text: beyond the mere transposition of the BRRD into Austrian law.

text: 3. Specific observations

text: 3.1 The ECB welcomes the clarification contained in section 3(10) of the draft law, which provides that the FMA may only carry out the tasks, powers and duties assigned to it under the draft law to the extent that the competence to do so is not granted to the ECB under

text: Council Regulation (EU) No 1024/2013

text: . 3.2 The ECB notes that section 162 of the draft law should be interpreted in a way that avoids conflict with the ECB’s exclusive competence to withdraw the authorisation of credit institutions pursuant to

text: Article 4(1)

text: (a) of

text: Regulation (EU) No 1024/2013

text: , as upon the entry into force of an FMA approval under that section the institution’s original authorisation is terminated. Therefore, given the ECB’s exclusive competence to withdraw an authorisation and the limitation on the FMA’s powers contained in section 3(10) of the draft law, the ECB must be involved in any decision of the FMA to approve an application under section 162 of the draft law. 3.3 Section 84(9) of the draft law requires a run-off company to pass a resolution for winding-up once it has fully liquidated its portfolio. In order to avoid any misunderstanding, the ECB recommends making it clear that the provision concerns a resolution for winding-up under the relevant provision of Austrian company law, such as section 84 of the Law on limited liability companies or section 203 of the Stock Corporation Act .

text: Done at Frankfurt am Main, 9 January 2015.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


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

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

text: Directive

text: of the European Parliament and the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EC

text: , and Directives

text: and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and the Council (OJ L 173, 12.6.2014, p. 190).

text: Law of 25 April 2014 regarding the statute and the control of credit institutions; Law of 25 April 2014 amending the Organic Law of the NBB.

text: The ECB commented on the draft of the Law of 25 April 2014 in Opinion

text: Law of 21 February 1998 establishing the Organic Law of the NBB.

text: See for example paragraph 3.2.2 of Opinion

text: See for instance paragraph 3 of Opinion

text: , paragraph 3.3 of Opinion

text: , paragraph 9 of Opinion

text: and paragraph 3.1.2 of

text: See Opinion

text: , paragraph 3.4.

text: See the ECB’s June 2014 Convergence Report, p. 27.

text: See the ECB’s June 2014 Convergence Report, p. 29, as well as paragraph 2.1 of Opinion

text: and paragraph 3 of Opinion

text: See for instance Opinion

text: . 14

text: Council Regulation (EC) No 2533/98 of 23 November 1998

text: concerning the collection of statistical information by the European Central Bank (OJ L 318, 27.11.1998, p. 8).

title: Opinion of the European Central Bank of 21 January 2015 on the Resolution College (CON/2015/2)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 21 January 2015 on the Resolution College (

text: ) Introduction and legal basis

text: On 3 December 2014, 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 establishing the modalities of the organisation and functioning of the Resolution College of the NBB, on the exchange of information between the Resolution College and third parties and measures to prevent conflicts of interests (hereinafter the ‘draft royal decree’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

text: , as the draft royal decree relates to the NBB. 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: The draft royal decree partly complements the transposition of Directive

text: of the European Parliament and the Council (hereinafter the ‘BRRD’). The BRRD was largely transposed into Belgian law 3 4 by the Law of 25 April 2014 which anticipated the BRRD.

text: Article 12

text: ter (1) of the Organic Law of the NBB , as amended by the Law of 25 April 2014, establishes the NBB as the resolution authority empowered to apply resolution tools and exercise resolution powers in accordance with the BRRD.

text: Article 21

text: ter (1) of the Organic Law of the NBB established the Resolution College as a new body of the NBB in charge of all relevant tasks related to the resolution function. The draft royal decree is proposed in application of

text: Article 21

text: ter (4) of the Organic Law which mandates the King to adopt the rules governing the organisation and functioning of the Resolution College, as well as the conditions of exchange of information with third parties and the measures to prevent conflicts of interests.

text: 2. General lines of policy and annual action plan

text: The ECB welcomes the draft royal decree as it strengthens and clarifies the organisation and the functioning of the NBB’s Resolution College, in line with the common framework of intervention powers and rules laid down in the BRRD. The ECB also welcomes the fact that, in determining general lines of policy and priorities that apply in regard to resolution, and in drawing up an annual action plan on the subject of resolution, the NBB’s Resolution College will take account of international developments, specifically of the implementation of the single resolution mechanism, as stated in the explanatory memorandum to the draft royal decree.

text: 3. Consequences for the NBB - independence and compliance with the prohibition on monetary financing

text: 3.1 The ECB acknowledges that the NBB has been empowered to carry out resolution tasks. In this respect, any performance by the NBB of tasks as resolution authority should not affect: (a) the NBB’s functional, institutional and financial independence; and (b) the NBB’s performance of its Eurosystem-related tasks . In particular as regards financial independence, previous ECB opinions have pointed out that the allocation to the NCBs of specific non-ESCB related tasks needs to be accompanied by the allocation of adequate human and financial resources allowing such tasks to be carried out in a manner which will not affect the NCBs’ ability to carry out their ESCB-related or Eurosystem-related tasks from an operational and financial point of view. Against this background, the ECB would like to make the observations set out in the following. 3.2 The ECB notes that the draft royal decree stipulates that the NBB has to provide the Resolution College with the material and human resources it requires in order to carry out its tasks . The ECB understands that, according to

text: Article 12

text: ter (2) of the Organic Law of the NBB, the costs of the Resolution College’s functioning will be ultimately covered by credit institutions. From this perspective, the ECB welcomes the introduction of

text: Article 12

text: ter (2) in the Organic Law of the NBB, which was recommended in its Opinion of 14 February 2014 . However, the draft royal decree does not contain any provisions detailing the expense recovery mechanism that is required by

text: Article 12

text: ter (2) of the Organic Law which the King is mandated to adopt. As it is expected that the NBB’s Resolution College will be carrying on its tasks from the date on which the draft royal decree enters into force, and in the absence of an expense recovery mechanism, the NBB will thus be required to commit additional resources, both human and financial, to these tasks. All actual costs involved in fulfilling the NBB’s resolution-related tasks should be covered. For this reason, the NBB should be involved in setting up the expense recovery mechanism.

text: 3.3 In addition, given that the NBB’s Resolution College is placed within the NBB, it is important to ensure that decisions adopted by the Resolution College do not endanger the NBB’s finances as a whole. Therefore, the NBB decision-making body that is responsible for Eurosystem-related tasks should be given ultimate control over any decision of the Resolution College that could affect the NBB’s independence and in particular its financial independence . Furthermore, the ECB underlines the importance of safeguarding compliance with the prohibition on monetary financing laid down in Article 123(1) of the Treaty. Irrespective of the fact that an NCB may act as a resolution authority under the BRRD, resolution in the financial market is neither a Eurosystemrelated task, nor a traditional central banking task. Rather, it is a Government task and, as such, it is performed in the interest of the Belgian State. Therefore, if the NBB is to be entrusted with such a task, it needs to be adequately remunerated in advance, to ensure compliance with the monetary financing prohibition . 3.4 The ECB recommends that the Belgian authorities adopt as soon as possible the details of the expense recovery mechanism in application of

text: Article 21

text: ter (2) of the Organic Law, and that the expenses incurred by the NBB during the period between the establishment of the Resolution College and the adoption of the expense recovery mechanism should be covered retroactively by the same mechanism.

text: 4. Exchange of information and the separation between the supervision and resolution functions

text: 4.1 In view of the NBB carrying out both resolution and supervisory functions, the ECB welcomes the mechanisms provided for in the draft royal decree to exchange information between the NBB’s Resolution College and the NBB’s supervisory services. The ECB understands that the Resolution College may request a credit institution to provide it with information by virtue of

text: Articles 226

text: , section 2, or

text: Article 276

text: , section 1 of the Law on banking. For the sake of legal certainty and alignment with the BRRD, this provision should be refined to specify that the Resolution College has to first request such information from the competent authority supervising the credit institution. 4.2 The ECB understands that the Resolution College will receive and use, inter alia, confidential statistical information collected under

text: Council Regulation (EC) No 2533/98

text: . Such exchange and use would be covered by

text: Article 8(1)

text: (d) of

text: Regulation (EC) No 2533/98

text: , according to which NCBs may use statistical information for the exercise of functions other than those specified in the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the “Statute of the ESCB”), in accordance with Article 14.4 of the Statute of the ESCB. The ECB notes that

text: Article 8(3) of Regulation (EC) No 2533/98

text: provides that the NCB, i.e. in the present situation

text: the Resolution College, has to take all necessary measures to ensure the physical and logical protection of the confidential statistical information. 4.3 The BRRD ‘exceptionally’ allows one authority to carry out both resolution and supervisory functions on condition that adequate structural arrangements are put in place to ensure operational independence and to avoid conflicts of interest between that authority’s resolution function and its other functions. In this respect, the BRRD stipulates that staff carrying out the functions of the resolution authority must be structurally separated and that their reporting lines must also be separated from staff carrying out tasks pursuant to the CRR and CRD IV or the other functions of the relevant authority . Since it is important to ensure the operational independence of the resolution function and to avoid conflicts of interests between the resolution function and other functions , the ECB would appreciate it if future regulations of the NBB’s Resolution College, which should provide for the tasks and operations of the Resolution College’s services , clearly reflect the requirements for adequate structural separation as laid down in the BRRD. That separation should not, however, prevent the resolution function from having access to any necessary information which is available to the supervisory function.

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

text: Done at Frankfurt am Main, 21 January 2015.

text: The President of the ECB

text: Mario DRAGHI


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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 2 Directive

text: of the European Parliament and of the Council of 15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and amending

text: Council Directive 82/891/EEC

text: , and Directives

text: and

text: , and Regulations

text: (EU) No 1093/2010

text: and

text: (EU) No 648/2012

text: , of the European Parliament and of the Council (OJ L 173, 12.6.2014, p. 190). 3 Article I Section 5(7) of the draft law.

text: Section 5(2) of Law No 747/2004. 5 Explanatory memorandum to the draft law, Specific part, explanations to the Part two of Article I Sections 3 to 5. 6 Article I Section 4(4). 7 See the ECB’s Convergence Report, June 2014, p. 25. 8 See the ECB’s Convergence Report, June 2014, p. 25. 9 See for example paragraph 3 of Opinion

text: , paragraph 3.3 of Opinion

text: and paragraph 9 of Opinion

text: . 10 Article I Section 5(4) of the draft law, in connection with Section 43(1) of Law No 747/2004. 11 The ECB understands that this observation was reflected in Section 99(2) of the adopted version of the draft law.

text: See the ECB’s June 2014 Convergence Report, p. 29, as well as paragraph 2.1 of Opinion

text: and paragraph 3 of Opinion

text: . 13 See paragraph 3.4 of Opinion

text: . 14 See the ECB’s June 2014 Convergence Report, p. 28. See also paragraph 4 of Opinion

text: , paragraph 4.3 of Opinion

text: , paragraph 3.6 of Opinion

text: and paragraph 3.2 of Opinion

text: . 15 Opinions

text: and

text: Regulation (EU) No 575/2013

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

text: Regulation (EU) No 648/2012

text: (OJ L 176, 27.6.2013, p. 1). 17 Directive

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

text: and repealing Directives

text: and

text: (OJ L 176, 27.6.2013, p. 338). 18 Article I Section 4(1),(2) and (5), Section 5(3) and (4), Section 6(3). 19 Article I Section 3(2). 20 The staff of the new unit will carry out supervision on behalf of the Council (Article I Section 5(4)). The Council will be competent to remove the obligation from the staff of the new unit to maintain confidentiality (Article I Section 8(2)). 21 See paragraph 3.3 of the Opinion

title: Opinion of the European Central Bank of 21 January 2015 on the role of Národná banka Slovenska in the resolution in the financial market (CON/2015/3)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 21 January 2015 on the role of Národná banka Slovenska in the resolution in the financial market (

text: ) Introduction and legal basis

text: On 29 October 2014, the European Central Bank (ECB) received a request from the Slovak Ministry of Finance for an opinion on a draft law on resolution in the financial market and on amendments to certain other laws (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third and sixth indents of

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

text: , as the draft law relates to a national central bank (NCB) and the rules applicable to financial institutions which materially influence the stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: The draft law is intended to transpose Directive

text: of the European Parliament and the Council (hereinafter the ‘BRRD’) into Slovak law. In this context, new responsibilities are to be assigned to Národná banka Slovenska (NBS). The draft law establishes a resolution authority called the Resolution Council (hereinafter the ‘Council’). In the matters which fall into its competence, the Council will be empowered to carry out supervision under Law No 747/2004 on supervision in the financial market and will be responsible for its conduct . The Council will have legal capacity and will be composed of nine members. Four members will be appointed by the Governor of NBS, who will include a member of the NBS Board, the head of the new unit and two other NBS staff members holding managerial positions. The Minister for Finance will appoint four other members from among staff members of the Ministry of Finance (hereinafter the ‘Ministry’) holding managerial positions, one of whom will be the State Secretary of the Ministry. The Director of the Debt

text: and Liquidity Management Agency will be the ninth member. A person directly deciding on the supervisory procedure may not be a member of the Council . A new organisational unit will be established within NBS (hereinafter the ‘new unit’) to provide expertise to, and organise the functioning of, the Council. The new unit will ensure that the tasks of the Council are carried out independently from other tasks of NBS. NBS staff from the new unit may not take part in the supervision of entities subject to the draft law unless the Council is competent in the matter. All costs associated with the functioning of the Council will be borne by NBS . Members of the Council will not be entitled to remuneration or reimbursement of expenses related to their function . The ECB presumes that the expenses of the members appointed by the Governor will be borne by NBS. The entities subject to the draft law will be obliged to pay annual ex ante contributions to the national resolution fund (hereinafter the ‘resolution fund’) administered by the Deposit Protection Fund (DPF). Monies belonging to the resolution fund will be held in an account with NBS, separate from other funds and assets of the DPF.

text: 2. Role of NBS

text: 2.1 Under the principle of financial independence, an NCB must have sufficient means not only to perform its tasks related to the European System of Central Banks (ESCB), but also its national tasks, e.g. financing its administration and own operations . Financial independence also implies that an NCB should always be sufficiently capitalised . Previous ECB opinions have pointed out that the allocation to the NCBs of specific non-ESCB related tasks needs to be accompanied by the allocation of adequate human and financial resources allowing such tasks to be carried out in a manner which will not affect the NCBs’ operational capacity to carry out their ESCB-related tasks . Additionally, in including NCB representatives in collegiate decision-making supervisory bodies or other authorities, due consideration would need to be given to safeguards for the personal independence of the members of the NCB’s decision-making bodies. These comments are valid also in relation to the role of NBS under the draft law. 2.2 In addition, given that the separate organisational unit supporting the performance of the tasks of the Council is part of NBS, it is important to ensure that decisions adopted by the Council will not jeopardise the finances of the NBS as a whole. In this respect, the ECB notes that the Council will have legal personality and understands that the responsibility for carrying out its tasks will be borne 10 11 by the Council . It is advisable that this is clarified and stated explicitly in the draft law.

text: 2.3 Furthermore, the ECB underlines the importance of safeguarding compliance with the prohibition on monetary financing laid down in Article 123(1) of the Treaty. The new task entrusted to NBS under the draft law is neither an ESCB-related task, nor a traditional central banking task. Rather, the new task is linked to a task for government, i.e. resolution in the financial market. Therefore, if NBS is to be entrusted with such a task, it needs to be adequately remunerated in advance, to ensure compliance with the monetary financing prohibition .

text: 3. Funding of the resolution fund

text: Pursuant to Article I Section 93(8) of the draft law, the Council may ask, inter alia, NBS to provide credit to the resolution fund. However, as resolution in the financial market is neither an ESCB-related task, nor a traditional central banking task, NBS would be assuming a Government task by financing the resolution fund. The BRRD provides that resolution costs should in principle be borne by shareholders and creditors and, where these funds are not sufficient, by financing arrangements. In line with the monetary financing prohibition, NCBs may not fund these financing arrangements and replenish the resolution fund by providing credit to it. Therefore, this provision of the draft law interferes with the monetary financing prohibition and should be deleted.

text: 4. Relationship between the contributions to the resolution fund and the proceeds of the bank levy

text: 4.1 The ECB has in the past opined on draft legislation introducing a bank levy in Slovakia, the proceeds of which are held in a separate extra-budgetary account and intended to cover costs related to the resolution of financial crises in the banking sector and to the protection of the stability of the banking sector in Slovakia . The ECB understands that the obligation of the banks, as well as branches of foreign banks, to pay contributions to the resolution fund (hereinafter the ‘contributions’) will not affect their duty to continue paying the bank levy. The ECB supports the idea that the cost of resolution should be borne by the banking sector rather than the taxpayer. However, it is not clear what the relationship will be between the proceeds of the bank levy and the resolution fund for bank resolution purposes. The ECB recommends making clear in which part of the resolution financing process the income from the bank levy is to be employed and how it will interact with the resolution fund in order to avoid duplication of instruments.

text: 5. Operational separation of NBS’s resolution function from its supervisory and other tasks

text: Article 3(3)

text: second subparagraph of Directive

text: requires the staff involved in carrying out the functions of the resolution authority pursuant to this Directive to be structurally separated, and

text: subject to separate reporting lines, from the staff involved in carrying out the tasks pursuant to

text: Regulation (EU) No 575/2013

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

text: of the European Parliament and of the Council or with regard to the other functions of the relevant authority. 5.2 The draft law aims at ensuring independence of the Council members from the institutions which they represent . It also contains several provisions to ensure operational independence of the new unit . Since the unit supporting the Council will be part of the structure of a different entity, namely NBS, the draft law should expressly state the reporting line of the new unit and should at the same time respect NBS’ autonomy in staff matters, which is an aspect of the principle of financial independence of an NCB. In addition to the limited provisions on the competence of the Council vis-à-vis the staff of the new unit contained in the draft law, it is advisable to distinguish clearly between the competences of the Council and NBS Board in respect of the staff of the new unit. 5.3 Finally, the ECB reiterates that the separation of the tasks of the new unit from the supervisory function of NBS should not prevent the staff of the new unit from having access to any necessary information which is available to the supervisory function .

text: 6. Membership of an NBS Board member in the Council

text: Pursuant to the draft law, one of the NBS representatives in the Council will be a member of the NBS Board . At the same time, the draft law provides that the member of the Council who is the NBS Board member in charge of supervision in the financial market will not have voting rights . The consulting authority should make it clear whether the NBS Board member appointed as a member of the Council is the one charged with supervision in the financial market, since this would have an impact on the voting rights of the member in question.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI