text: OJ L 94, 30.3.2012, p. 22. 2 OJ L 189, 3.7.1998, p. 42.

text: See e.g.

text: Case 106/77

text: Italian Minister of Finance v. Simmenthal S.p.A. [1978] ECR 629, paragraph 17. 4 See Italian Constitutional Court

text: Case 183/1973

text: Frontini v Amministrazione delle Finanze, p. 7.

title: Opinion of the European Central Bank of 30 January 2013 on credit transfer and direct debit transactions (CON/2013/7)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 30 January 2013 on credit transfer and direct debit transactions (

text: ) Introduction and legal basis

text: On 17 January 2013, the European Central Bank (ECB) received a request from the Banca d’Italia for an opinion on a draft act of the Banca d’Italia on the application of

text: Regulation (EU) No 260/2012

text: of the European Parliament and of the Council of 14 March 2012 establishing technical and business requirements for credit transfers and direct debits in euro (hereinafter the ‘draft act’). 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 fifth indent of

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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft act relates to payment 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 act

text: Regulation (EU) No 260/2012

text: laid down the end-dates for the migration of legacy credit transfers and direct debits to pan-European schemes. The Banca d’Italia was designated as the competent authority for Italy under Article 10(1) of the Regulation. It has prepared the draft act in order to further clarify the application of the Regulation in Italy, to exercise its right to grant waivers under

text: Article 16(3)

text: to (7) and to include in a single act all the relevant compliance requirements under the Regulation. The draft act includes provisions regarding: (i) definitions; (ii) scope, including the specification of the national payment services that fall within and outside the scope of the Regulation; (iii) a special regime for the ‘internal payments’; (iv) waivers; (v) interoperability; (vi) information obligations of payment service providers (PSPs) to their customers; (vii) the storage of direct debit mandates; (viii) the use of BIC codes, for which no waiver is envisaged, and the establishment of databases for such codes; (ix) optional additional services; and (x) the obligation for PSPs to prepare ‘migration plans’.

text: 2. Relationship between the draft act and

text: Regulation (EU) No 260/2012

text: The draft act contains several provisions and definitions which to varying degrees duplicate or reword provisions in the Regulation. This type of application results in unnecessary duplication and could even create inconsistencies between national and Union law, which would be avoided by instead using references to the Regulation, wherever relevant. In this respect, according to consistent case-law of the European Court of Justice, ‘in accordance with the principle of the precedence of Community law, … directly applicable measures of the [Union] institutions … preclude the valid adoption of new national legislative measures to the extent to which they would be incompatible [with such Union measures]’ . Moreover, the Italian Constitutional Court has also stated that regulations should not be reproduced, integrated or executed by national legislation which may differ from, or affect the entry into force of, Union measures, or partly derogate from, or repeal, the latter . Therefore, the ECB recommends replacing in the draft act any definition of a term which has already been defined by the Regulation with a reference to the Regulation.

text: 3. Scope of the draft act

text: 3.1 Article 2(1) of the draft act explicitly lists payment services which fall within the scope of the Regulation while

text: Article 2(5)

text: states that services other than those referred to in the preceding paragraphs are not bound to migrate. This does not appear to be in line with the Regulation, pursuant to which all credit transfers and direct debits should migrate, unless explicitly excluded by the Regulation or by a waiver. Even though the list of payment services in

text: Article 2(1)

text: and (2) is not exclusive, it could still create confusion, and the ECB would therefore suggest deleting

text: Article 2(1)

text: and (2) and amending

text: Article 2(5)

text: . The Italian payment services that must comply with the Regulation could be specified in an annex. 3.2 With reference to the negative scope, the draft act should specify sufficiently detailed and reasoned grounds for not applying the Regulation to certain transactions in Italy. Moreover, according to Article 1(3) of the Regulation, the Regulation nonetheless applies only to the underlying credit transfers or direct debts, where payment schemes are based on payment transactions by credit transfers or direct debits but have additional optional features or services. Furthermore, a review of services that fall outside the scope could also be considered after some years.

text: 4. Internal payments

text: ‘Internal payments’, as defined by

text: Article 1

text: (o) of the draft act, are specifically regulated by

text: Article 3

text: . The ECB understands that this Article is meant to clarify in which circumstances PSPs are not under an obligation to comply with the requirement specified by

text: Article 5(1)

text: (b) of the Regulation. However, such a clarification is not necessary, as under

text: Article 5(1)

text: (b) of the Regulation, where transactions are not

text: transmitted via a retail payments system or to another PSP, such requirement does not apply. Moreover, the definition of ‘internal payments’ in

text: Article 1

text: (o) of the draft Act includes, in addition to transactions which are not transmitted to another PSP, also transactions which are transmitted to a PSP which belongs to the same banking group. This widens the range of cases in which the requirement under

text: Article 5(1)

text: (b) of the Regulation does not have to be complied with and, hence, inappropriately restricts the scope of the Regulation. In the light of the above and for the sake of legal certainty, the ECB recommends deleting

text: Article 1

text: (o) and

text: Article 3

text: , relating to internal payments, from the draft act.

text: 5. Waivers

text: 5.1 Article 4(1) of the draft act waives for ‘RID finanziari’ and ‘RID a importo fisso’ all the requirements under Article 6(2) of the Regulation until 1February 2016. Under Article 16(3) of the Regulation, such waiver is only possible for credit transfer or direct debit transactions with a cumulative market share, based on the official payment statistics published annually by the ECB, of less than 10% of the total number of credit transfers or direct debit transactions. Both ‘RID finanziari’ and ‘RID a importo fisso’ are defined as ‘operational variants of the RID interbank procedure’, under

text: Article 1

text: (v) and (w) of the draft act. As a waiver under Article 16(3) of the Regulation may only be provided to credit transfer or direct debit transactions, the definitions of ‘RID finanziari’ and ‘RID a importo fisso’ should be amended. 5.2 Under Article 4(2) of the draft act a waiver is granted to payment service users that initiate or receive individual credit transfers or direct debits that are bundled together for transmission. In this respect, the ECB notes that under Article 16(5) of the Regulation ‘Member States may allow their competent authorities, … to waive the specific requirement to use the message formats specified in point (1)(b) of the Annex set out in

text: Article 5(1)

text: (d) for PSUs which initiate or receive individual credit transfers or direct debits that are bundled together for transmission’. However, under

text: Article 5(1)

text: (d) of the Regulation, the compliance with the above-mentioned requirement is to be ensured by PSPs. Against this background, and for the sake of clarity, the ECB recommends that the waiver should not be addressed to payment service users.

text: 6. Additional optional services

text: The ECB notes that

text: Article 1

text: (x) of the draft Act defines additional optional services as non-compulsory, whereas

text: Article 9

text: seems to imply an obligation to provide such services. The ECB suggests clarifying in

text: Article 9

text: that the provision of additional optional services is not compulsory for PSPs. The ECB notes that, according to recital 1 of the Regulation, ‘the creation of an integrated market for electronic payments in euro, with no distinction between national and cross-border payments is necessary for the proper functioning of the internal market’.

text: This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 30 January 2013. [signed]

text: The President of the ECB

text: Mario DRAGHI


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

text: In 2011 and 2012, the funding in foreign currencies represented up to 45% of Dexia issues. See Sénat preparatory work, report 203 by Mr François Marc.

text: Article 4 of Finance Amendment Law for 2011 (Law No 2011-1416 of 2 November 2011). 4 The law was published on 29 December 2012 in the Journal Officiel. Finance (Amendment) Law for 2012 (Law No 2012-1510 of 29 December 2012).

text: , paragraph 3,

text: , paragraph 2.2 and

text: , paragraph 3. 6 OJ L 218, 15.8.2012, p. 20. 7 COM(2012) 280/3.

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 1 February 2013 on a State guarantee covering certain commitments of subsidiaries of Dexia SA (CON/2013/8)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 1 February 2013 on a State guarantee covering certain commitments of subsidiaries of Dexia SA (

text: ) Introduction and legal basis

type: rubrik

text: On 14 December 2012, the European Central Bank (ECB) received a request from the French Ministry of Economy and Finance for an opinion on a draft finance law for 2012 granting a State guarantee covering certain loans granted to Dexia SA and Dexia Crédit Local SA (hereinafter the ‘draft law’). The ECB was requested to deliver an opinion under extremely urgent circumstances. The ECB’s competence to deliver an opinion is based on Article 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 of 29 June 1998

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , since 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. Purpose of the draft law

text: 1.1 The draft law amends Article 4 of the Finance (Amendment) Law for 2011 (Law No 2011-1416 of 2 November 2011) on which the ECB has been consulted (

text: ) and which authorised the Minister for the Economy and Finance to grant in return for payment a State guarantee, jointly with the Belgian and Luxembourg States, for financing raised or issued by Dexia SA and Dexia Crédit Local SA before 31 December 2021. The current maximum ceiling of liabilities guaranteed by the three States is EUR 90 billion of which 36.5% is borne by France; that is a share of EUR 32.85 billion. As the main features of the guarantee scheme set up at that time remain unchanged, Opinion

text: still applies and is therefore reiterated by the ECB for the purpose of the current opinion.

text: 1.2 In the context of the gradual break-up of the Dexia Group and further to the agreement reached by the Belgian, French and Luxembourg Governments on 8 November 2012 leading to the recapitalisation of Dexia SA, the draft law would now modify the guarantee scheme set up by the Finance (Amendment) Law for 2011 (Law No 2011-1416 of 2 November 2011) to specify the financing guarantee and to modify France’s share in the guarantee and the amount of its ceiling. Article 4 of the draft law clarifies the financing guarantee in four aspects: (a) it introduces the concept of ‘qualified investor’ which includes direct and indirect subsidiaries of Dexia SA or of Dexia Crédit Local SA; (b) it clarifies that ‘guarantee’ includes the principal, interest, costs and accessories of the guaranteed financing, bonds and securities; (c) it specifies the regime for foreign currency issues ; (d) it increases the amount of the maximum ceiling on liabilities guaranteed by France which may not exceed 45.59 % of the total amount guaranteed by the three States. The scope of the guarantee would first be extended to commitments taken by the subsidiaries of the Dexia Group. The Dexia Group intends to issue, via its US subsidiaries, guaranteed bonds denominated in euro and US dollars which would be placed with US investors, given the limited interest of European investors for these instruments amid the European sovereign bond crisis. The draft law clarifies that the commitments covered by the guarantee can take the form of loans, bonds and debt securities. It also specifies that the amount of the principal of the liabilities guaranteed may not exceed the ceiling of EUR 38.76 billion, taking into account the euro exchange value at the time the State guarantee is granted, of the financing, bonds or securities in US dollars, Canadian dollars, pounds sterling, yen and Swiss francs. The allocation of the total amount of the guarantee, which would now amount to EUR 85 billion instead of EUR 90 billion, among Belgium, France and Luxembourg, would be adapted. France would now guarantee 45.59% of such amount, namely EUR 38.76 billion instead of the previous EUR 32.85 billion, which corresponded to 36.5% of EUR 90 billion. The guarantee – which would still be payable under the Finance (Amendment) Law for 2011 (Law No 2011-1416 of 2 November 2011) – will apply unless provided otherwise by agreements entered into by the Minister for the Economy and Finance. This change creates more flexibility in enforcing the guarantee, which may be called preventively to avoid a default at maturity or without mentioning the precise amounts due and payable on a specific date, such modalities being difficult to meet when the guaranteed securities are held within a securities settlement system. 1.3 The provisions of the Finance (Amendment) Law for 2011 on the duration of the guarantee that covers all commitments taken on by 31 December 2021 , the requirement of remuneration to be

text: paid by the Dexia Group and the powers of the Minister for the Economy and Finance to take the implementation measures remain unchanged.

text: 2. Breach of the consultation obligation

text: The ECB received the request from the French Ministry of the Economy and Finance for an urgent consultation on the draft law on 14 December 2012. The legislative process had started in Parliament on 14 November 2012. The consultation request specified that the French authorities would like to receive the ECB’s opinion ‘as quickly as possible and in any case before 17 December 2012’. The French Parliament adopted the draft law at its 19 December 2012 session . According to

text: Article 4 of Decision 98/415/EC

text: , the ECB must be consulted ‘at an appropriate stage’ in the legislative process. This implies that the consultation should take place at a point in the legislative process that affords the ECB sufficient time to examine the draft legislative provisions and adopt its opinion. Pursuant to

text: Article 3(4) of Decision 98/415/EC

text: , Member States are obliged to suspend the process for adoption of the draft legislative provision pending submission of the ECB’s opinion to allow the relevant national authorities to meaningfully deliberate the ECB’s opinion prior to adoption of the provisions. In this respect, the ECB stresses that even cases of particular urgency do not relieve national authorities from their duty to consult the ECB and to allow sufficient time to take into account its views in accordance with Decision

text: . The French authorities should have consulted the ECB earlier or postponed the final vote on the draft law until such time that would have allowed for a proper consultation with the ECB, as well as due consideration of the ECB’s opinion. The ECB would appreciate the Ministry honouring its obligation to consult the ECB in due time in the future.

text: 3. Specific observations

text: 3.1 The ECB welcomes the coordinated efforts by Belgium, France and Luxembourg in the context of the reorganisation of the Dexia Group. It notes with satisfaction that the draft law mainly purports to achieve greater consistency in the concepts used under Belgian, French and Luxembourg law to describe the scope, nature and modalities of the guarantee extended to the Dexia Group. This would contribute to improving the legal certainty and a level playing field in the three Member States as regards the implementation of the guarantee. 3.2 The ECB understands that the extension of the guarantee scheme to bonds and debt securities would benefit issues of such instruments by the subsidiaries of Dexia SA and Dexia Crédit Local SA. As a consequence, and provided that these measures are necessary to limit the scale or effects of a sudden crisis in the financial markets or a serious threat of systemic risk, a State guarantee may

text: therefore be issued under French law for the benefit of such subsidiaries, even though they are located in foreign countries. When determining which subsidiary would effectively benefit from the guarantee and agreeing with the Dexia Group its specific terms and conditions, including the remuneration, the Minister for the Economy and Finance would nevertheless need to abide by Union competition and State aid rules. The Minister would also need to follow the principles identified in previous ECB opinions , namely that government guarantees should (i) address the funding problems of liquidity-constrained solvent banks, by improving the functioning of the market for bank debt of longer-term maturity, (ii) preserve the level playing field among financial institutions and avoid market distortions, and (iii) ensure consistency in the management of Eurosystem liquidity. 3.3 The ECB notes, however, that one of the objectives of the extension of the guarantee is to enable the issuance of bonds denominated in euro, US dollars, Canadian dollars, pounds sterling, Japanese yen or Swiss francs for placement with foreign institutional investors. Should the underlying instruments not be issued and held within the euro area, these instruments would therefore not be eligible for monetary policy purposes in view of Article 1(2) of Guideline ECB/2012/18 of 2 August 2012 on additional temporary measures relating to Eurosystem refinancing operations and eligibility of collateral . 3.4 For instruments issued and held within the euro area, the quantitative restriction provided by Article 5 of Guideline ECB/2012/18 would apply. In both cases, the ECB welcomes that the issuance of these guaranteed bonds would not affect the conduct and implementation of monetary policy in the euro area. 3.5 For the sake of transparency, the ECB recommends specifying in the draft law the subsidiaries which will be covered by and benefit from such guarantees. A general reference to any direct or indirect subsidiaries of Dexia SA or Dexia Crédit Local SA might be misleading at a time when, in the course of the restructuring of the group, some of the subsidiaries are sold while others are in the process of resolution or liquidation. 3.6 The ECB understands that the guarantees provided to the Dexia Group could develop their effect until 31 December 2031. The draft law could clarify whether the need for such guarantees may change in view of transposition in 2015 of the proposal for a directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directives

text: and

text: , Directives

text: and

text: and

text: Regulation (EU) No 1093/2010

text: . This Directive could provide additional tools also for the resolution of the Dexia Group.

text: This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 1 February 2013. [signed]

text: The President of the ECB

text: Mario DRAGHI

type: vagledning

utgivare: ecb


text: OJ L 189, 3.7.1998, p. 42. 2 § 12 of the draft law which amends § 1(2) and § 2 of the Law on measures to prevent money laundering and financing of terrorism. 3 § 2 of the Law on measures to prevent money laundering and financing of terrorism. 4 § 1(2) of the Law on measures to prevent money laundering and financing of terrorism. The scope is extended to all economic operators not covered by the investigation and information obligations in the law. 5 § 12 of the draft law. 6 Point 12.2.2 of the Explanatory Memorandum of the draft law. 7 § 8(2) of the Law on Danmarks Nationalbank.

text: See most recently Opinion

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

title: Opinion of the European Central Bank of 1 February 2013 on limitations on cash payments (CON/2013/9)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 1 February 2013 on limitations on cash payments (

text: ) Introduction and legal basis

text: On 10 January 2013, the European Central Bank (ECB) received a request from the Danish Ministry of Justice for an opinion on a draft law amending the Criminal Code, the Law on the administration of justice, the Law on measures to prevent money laundering and financing of terrorism and various other laws (strengthened measures against economic crime) (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 second indent of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates, inter alia, to means of payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1 The draft law aims at providing the best possible conditions for the prevention, investigation and prosecution of economic crime in the wake of the financial crisis. One of the measures will limit to DKK 50 000 cash payments to economic operators to prevent money laundering and financing of 2 3 terrorism . Currently retailers and auctioneers may receive cash payments of up to DKK 100 000 . The scope is extended to cover all economic operators and the amount of cash they may accept is thus reduced to DKK 50 000 . This new limit takes into consideration the need for citizens to retain access to cash payments and the risk of money laundering associated with large cash payments . 1.2 Finally, cash payments of DKK 50 000 or more to economic operators in breach of the prohibition will still be considered legal tender .

text: 2. Compatibility with Union law

text: 2.1 Although Union law only regulates restrictions on cash payments in euro, the ECB considers it appropriate to assess the draft law’s provisions against the relevant Eurosystem practices. 2.2 The ECB notes that the draft law is in compliance with Union law, and in particular with

text: recital 19

text: of

text: Council Regulation (EC) No 974/98 of 3 May 1998

text: on the introduction of the euro , which states that ‘limitations on payments in notes and coins, established by Member States for public reasons, are not incompatible with the status of legal tender of euro banknotes and coins, provided that other lawful means for the settlement of monetary debts are available’ . The ECB acknowledges that: (i) such other lawful means for the settlement of monetary debts, other than cash, are available in Denmark; and (ii) the draft law’s objective of preventing money laundering and financing of terrorism qualifies as a public reason outweighing the impact of the limitations on cash payments. 2.3 However, limitations on cash payments should be proportionate to the general objective of preventing money laundering and financing of terrorism and should not go beyond what is necessary to achieve this objective. Any impact of the proposed provisions should be carefully weighed against the public benefits expected to be derived from them. Also in view of the fact that the measures affect relatively low value payments, the competent authorities should ensure that the effects of these measures do not go beyond what is necessary for achieving the objective of combating money laundering and financing of terrorism.

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

text: Done at Frankfurt am Main, 1 February 2013.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


title: Opinion of the European Central Bank of 1 February 2013 on a resolution framework for credit and other institutions (CON/2013/10)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 1 February 2013 on a resolution framework for credit and other institutions (

text: ) Introduction and legal basis

text: On 11 January 2013, the European Central Bank (ECB) received a request from the Cypriot Ministry of Finance for an opinion on a series of draft laws establishing a draft resolution framework for credit and other institutions operating in Cyprus (hereinafter the ‘draft laws’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and on the third and sixth indent of

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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft laws relate to the Central Bank of Cyprus (CBC) 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 and main features of the draft laws

text: 1.1 The draft laws are intended to establish a comprehensive framework for the recovery, restructuring and resolution of credit and other institutions, with a view to safeguarding the smooth operation of the financial system and serving the public interest. The resolution framework is to consist of proposed amendments to (i) the Banking Laws of 1997 to 2009 , (ii) the Co-operative Societies 3 4 Laws of 1985 to 2012 , (iii) the Financial Crises Management Laws of 2011 to 2012 , and (iv) the Special Tax on Credit Institutions Laws of 2011 to 2012 , as well as of (v) a draft law and accompanying Regulations on the Establishment and Operation of a Deposit Protection and Resolution of Credit and Other Institutions Scheme (hereinafter the ‘Scheme’), and finally (vi) a draft law on the resolution of credit and other institutions (hereinafter the ‘draft law on resolution’).

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

text: 2 Law 66(I)/1997, Episimi Efimerida tis Dimokratias No 3168, 18.7.1997.

text: 3 Law 22/1985, Episimi Efimerida tis Dimokratias No 2043, 29.3.1985.

text: 4 Law 200(I)/2011, Episimi Efimerida tis Dimokratias No 4313, 30.12.2011.

text: 5 Law 84(I)/2011, Episimi Efimerida tis Dimokratias No 4282, 29.4.2011. 1.2 In particular, the amendments to the Banking Laws reinforce the powers of the CBC to (i) collect information from banks, including its powers of entry and inspection, (ii) intervene early, in terms of new powers to mandate (a) an increase of the share capital of the bank, without strict compliance with company law rules, (b) the submission of recovery plans and information for the Central Bank of Cyprus to draw up resolution plans in its capacity as resolution authority, and (c) the imposition of limits on dividend payments and the remuneration of the officials, executive officers and directors of a bank. Finally, the amendments to the Banking Laws introduce a new special liquidation procedure, which includes the appointment of a special liquidator, where (a) the bank’s licence has been withdrawn, (b) the bank holds deposits covered by the Deposit Protection Fund, and (c) the special liquidation of the bank is in the public interest. 1.3 The amendments to the Co-operative Societies Laws are intended to bring its text in line with the draft law on resolution. In particular, the amendments to the Co-operative Societies Laws empower the Co-operative Societies Commissioner to demand (i) an increase of the share capital of a cooperative credit institution (CCI), (ii) the submission of recovery plans and information to the resolution authority for the development of resolution plans, and (iii) limits on the payment of dividends and the remuneration of the officials and directors of CCIs. The proposed amendments also insert into the Co-operative Societies Laws provisions relevant to the special liquidation of CCIs, and the appointment of a special liquidator in cases where (a) the licence of a CCI has been withdrawn, (b) the CCI holds deposits covered by the Deposit Protection Fund, and (c) the special liquidation of the Co-Operative is in the public interest. 1.4 The draft law and accompanying Regulations on the Establishment and Operation of a Deposit Protection and Resolution of Credit and Other Institutions Scheme abolish (i) the Deposit Protection Fund established under Section 34 of the Banking Laws, and (ii) the Financial Stability Fund, established under Section 3(1) of the Financial Stability Fund Law , and replace them with a separate legal entity, comprised of two separate funds, namely (a) a deposit protection fund, and (b) a resolution fund (hereinafter collectively referred to as the ‘Funds’). The Funds are to be kept separate through two distinct accounts, one for each of the Funds . The Scheme applies to banks and branches of banks established in Cyprus, banks operating on a cross-border basis and the Housing Finance Corporation (hereinafter collectively referred to as the ‘covered credit institutions’). The Scheme will: (i) compensate depositors from the Deposit Protection Fund, in the event a covered credit institution is unable to repay depositors, or a receivership or liquidation order has been issued in relation to a covered credit institution, and (ii) fund the resolution measures provided for in the draft law on resolution. All covered credit institutions, unless

text: 6 Law 201(I)/2011, Episimi Efimerida tis Dimokratias No 4313, 30.12.2011.

text: 7 The Deposit Protection Fund is to be funded by the resources of the existing fund, the future contributions of covered credit institutions, the transfer and liquidation of assets, the proceeds of sanctions imposed by the Scheme’s Committee, and loans which the Scheme may secure, backed by guarantees of the covered credit institutions. The Resolution Fund is to be funded by the resources of the existing fund in the form of levies collected on banks by virtue of the Special Tax on Credit Institutions Laws, future contributions, the transfer and liquidation of assets, the proceeds of sanctions imposed by the Scheme’s Committee, and loans. exempted by the Committee of the Scheme, are to pay contributions to the Deposit Protection Fund, as per the accompanying Regulations. Branches of banks established in another Member State may be exempted if covered by deposit protection schemes in their home Member States. The affairs of the Scheme are to be managed by an independent committee, chaired by the Governor of the CBC. 1.5 The amendments to the Financial Crises Management Laws aim to inter alia (a) broaden the scope of that law through a delegation to the Council of Ministers of powers for the adoption of support measures, on a recommendation of the CBC, subject to certain conditions, (b) make the granting of government support to any of the Funds conditional on their management committees having exhausted every possibility to obtain additional resources either from the covered institutions or through borrowing, (c) require an evaluation of the long-term viability of the applicant financial institution prior to a recommendation by the Council of Ministers to adopt support measures, (d) remove references to the existence of a ‘financial crisis’ as a precondition for the adoption of support measures, and (e) introduce provisions on the management, by the Council of Ministers, on a recommendation of the CBC, of hybrid capital and subordinated liabilities of financial institutions that have received or have applied for support. 1.6 Finally, the draft law on resolution establishes a framework for intervention in, and the implementation of, resolution measures in relation to credit institutions where (a) the affected institution is not, or is likely to no longer be, viable, or (b) in the absence of such measures, the institution will be unable to observe its capital adequacy and/or liquidity requirements, or (c) resolution measures are necessary to safeguard the public benefit or serve the public interest. The main objectives of the draft resolution law are to (i) ensure continuity of banking and financial services, (ii) avert adverse effects on the financial system, (iii) safeguard the stability and smooth operation of the financial system, and (iv) protect public funds and depositors. Intervention is based, inter alia, on the following principles: (a) shareholders and stakeholders are to be the first to bear losses, (b) creditors are to absorb losses after shareholders and creditors of the same rank are to be treated equally, (c) no creditor is to be worse off than if the affected institution had been liquidated as part of an insolvency procedure, (d) the senior management of an affected institution is to be replaced and be liable for any breaches of their duties, (e) any interference with property rights is to comply with the Constitution of the Republic of Cyprus and the European Convention on Human Rights, and not be in conflict with the acquis communautaire. The CBC will act as resolution authority, with the power to issue, on consultation with the Minister for Finance, relevant orders for the implementation of the following resolution measures: (i) an increase of the share capital of an affected institution, (ii) the sale of the business of an affected institution, including the transfer of some or all of its assets and liabilities, (iii) the transfer of assets or liabilities to a bridge bank or to an asset management company and (iv) bail-in. The CBC will also

text: 8 See paragraph 4 of this Opinion. have, as resolution authority, the power to appoint special administrators to take over the management of the CI under resolution. 1.7 The ECB understands that the proposed adoption of a comprehensive framework for the recovery, restructuring and resolution of credit and other institutions is motivated by a possible financial support programme for Cyprus in response to the impact of the sovereign debt crisis on the Cypriot banking sector and economy.

text: 2. General observations

text: 2.1 Subject to its remarks in the remainder of this opinion, the ECB welcomes the draft laws as a means of enhancing financial stability in Cyprus. The ECB has previously been consulted on previous legislation on these subjects . 2.2 The ECB reminds the consulting authority that according to

text: Article 4 of Decision 98/415/EC

text: , the ECB must be consulted ‘at an appropriate stage’ in the legislative process. This implies that the consultation should take place at a point in the legislative process that affords the ECB sufficient time to examine the draft legislative provisions and adopt its opinion.

text: 3. The draft law on resolution

text: 3.1 The ECB notes that, in keeping with other national resolution frameworks recently subject to ECB consultation, Section 4 of the draft law on resolution provides for the priority of claims in the event of the liquidation of an institution under resolution. In particular, Section 4(3) will rank the claims of uninsured depositors in liquidation ahead of those of other general unsecured creditors. This appears to be motivated by financial stability and practical considerations specific to Cyprus and its banking sector. However, the ECB points out that the pari passu status of uninsured creditors has been adopted in recent resolution laws in other euro area countries, including Spain and Ireland. Views on the impact of granting preferential ranking to depositors are highly divergent, as such preferential ranking may have an impact on the funding costs of banks given the greater efforts likely to be made by other creditors to secure their claims. This impact could be somewhat mitigated if priority claims were only extended to guaranteed deposits. Granting priority status to insured deposits is warranted, as this reduces potential losses to insured depositors of a liquidated institution and, as a result, the risk of bank runs as well as any excessive depletion of the deposit guarantee scheme . 3.2 Furthermore, Section 5(6) of the draft law on resolution will require the CBC, in exercising its powers as resolution authority, to take all measures necessary to ensure the effective separation

text: 9 See Opinions

text: and

text: 10 See Opinion

text: , paragraph 4 and Opinion

text: , paragraph 8.2. between its supervisory tasks pursuant to the Central Bank of Cyprus Laws of 2002 to 2007 , and its resolution tasks, as provided for in the draft law on resolution. The ECB expects the same degree of separation to apply to the CBC’s monetary policy tasks, in line with the Treaty and the Statute of the European System of Central Banks and of the European Central Bank. 3.3 Further, the ECB refers to the principle of financial independence which requires Member States not to put their NCBs in a position where they have insufficient financial resources to carry out all their tasks . The ECB expects that the new tasks assigned to the CBC under the draft law on resolution will not affect the resources it currently allocates to supervision and to the performance of its monetary policy tasks. 3.4 Moreover, Section 6(1) of the draft law on resolution, entitled ‘Conditions for the adoption of resolution measures’, provides that the resolution authority may only take resolution measures in relation to institutions which, based on the assessment of the CBC, as resolution authority, are no longer viable or are likely to no longer be viable, thereby giving rise to a credible risk that the institution may no longer meet its obligations and/or continue to operate as a going concern. The ECB welcomes the application, under the draft law on resolution, of resolution measures to nonviable entities only, both for conceptual reasons, and for reasons of consistency with the Commission proposal of 6 June 2012 for a Union framework for bank recovery and resolution . 3.5 The ECB notes that Section 12 of the draft law does not exclude guaranteed deposits from the scope of bail-in measures. At the same time, the general principles of the draft law point to the conclusion that, in the event of a bail-in, guaranteed deposits would not be affected. For reasons of clarity, the ECB would invite the consulting authority to consider an explicit reference in Section 12 of the draft law to the exclusion of guaranteed deposits from the scope of an eventual bail-in. 3.6 Finally, the ECB notes that the draft law on resolution authorises the CBC, as resolution authority, to issue directives or to adopt decrees, so as to give effect to its decisions. The draft law on resolution may require further provisions for the enforcement of the directives or decrees issued by the CBC, as resolution authority, as well as other measures envisaged to enforce the draft resolution law. In this respect, the consulting authority may also wish to insert a provision in the draft law on resolution, requiring third parties, including governmental authorities, to recognise, enforce and observe the terms of such directives or decrees.

text: 11 Law 138(I)/2002, Episimi Efimerida tis Dimokratias No 3624, 19 July 2002.

text: 12 See ECB Convergence Report 2012, p. 25.

text: 13 Proposal for a directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and amending Council Directives

text: and

text: , Directives

text: and

text: and

text: Regulation (EU) No 1093/2010

text: (COM(2012) 280 final).

text: 14 Section 3(1)(e) on the protection of depositors and Section 4(3) on the priority of guaranteed deposit claims, in conjunction with the ‘no creditor worse off than in insolvency’ principle set out in Section 3(2)(d).

text: 4. Amendments to the Financial Crises Management Law

text: According to Section 4 of the draft law amending the Financial Crises Management Law (hereinafter, ‘the draft crises law’), the Cypriot Council of Ministers is to activate the Financial Crises Management Law on an application from a financial institution ‘in order to safeguard its long-term viability’. This will be subject to a recommendation from the CBC, if the latter considers it probable that resolving the applicant may have more serious repercussions on the stability of the financial system and/or may result in higher public spending than the application of support measures under the draft crises law. Section 4 might be understood as being compatible with the provision of financial support to viable and non-viable financial institutions alike . As pointed out earlier in this opinion, non-viable financial institutions fall within the remit of the draft law on resolution. While the ECB agrees that the competent national authorities should have a margin of discretion when deciding to which institutions to grant State support, the interaction of State support schemes with national resolution frameworks requires careful consideration to avoid legal ambiguities and practical implementation uncertainties at times of crisis. The ECB is of the view that the restructuring of a non-viable entity as a going concern (‘open bank scenario’) instead of its resolution as a gone concern (‘closed bank scenario’) should only be considered under exceptional circumstances, where the orderly resolution of a credit institution would have seriously damaging effects on the stability of the financial system, with heightened risks of cross border contagion .

text: 5. Amendments to the Cooperative Societies Laws

text: Section 4 of the draft law amending the Cooperative Societies Laws inserts a new Section 49BA on the special liquidation of CCIs. The ECB notes that CCIs currently benefit from a cross-guarantee extended to them from the Cooperative Central Bank . Although not explicitly stated in the draft law, the ECB understands that the liquidation of individual CCIs would only be possible on the assumption that the cross-guarantee could be lifted, albeit only temporarily and on an individual basis.

text: 6. The establishment and operation of a deposit protection and resolution of credit and other institutions scheme

text: As explained earlier in this opinion, the proposed Deposit Protection Fund will compensate depositors, while the proposed Resolution Fund will fund resolution measures. The ECB notes with satisfaction that

text: 16 Section 4 provides that support measures are conditional on (a) a financial institution applying for support to safeguard its long-term viability, and (b) an assessment by the CBC that the resolution of the financial institution in question, under the law on resolution, may have more serious repercussions on the stability of the financial system or result in higher public spending than the application of support measures under the Financial Crises Management Law.

text: 17 See Opinion

text: , paragraph 6 and Opinion

text: , paragraphs 1 and 6.2.

text: 18 The liabilities of the Cooperative Central Bank are, in turn, guaranteed by CCIs, as shareholders of the Cooperative Central Bank. whilst the Deposit Protection Fund may borrow from the Resolution Fund, the Resolution Fund may not borrow from the Deposit Protection Fund if the funds available to it prove insufficient for its tasks . The clear separation between the two Funds in terms of their lending capabilities is also in line with the draft law on resolution, according to which the financing of the implementation of resolution measures falls within the remit of the Resolution Fund, with the Deposit Protection Fund only paying an amount equal to the value of the covered deposits .

text: 7. Amendments to the Special Tax on Credit Institutions Law

text: The draft law amending the Law on the special tax on credit institutions reflects the replacement of the Financial Stability Fund by a Resolution Fund and will transfer the 25/60 of the total revenues levied through the imposition of the special tax, to finance the Resolution Fund, from 1 January 2017 to a dedicated account held at the CBC. In this regard, the ECB draws the attention of the consulting authority to Opinion

text: [signed]

text: The President of the ECB

text: Mario DRAGHI

text: 21 See, in particular, paragraph 2.


text: Työsopimuslaki 26.1.2001/55. 2 Kirjanpitolaki 30.12.1997/1336. 3 OJ L 189, 3.7.1998, p. 42. 4 Tehostettu harmaan talouden ja talousrikollisuuden torjunnan toimintaohjelma vuosille 2012–2015, valtioneuvoston periaatepäätös 19.1.2012. 5 See paragraph 2.3.2 of Opinion

text: and paragraph 2.1 of opinion

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 6 OJ L 139, 11.5.1998, p. 1.

text: See a special section in the explanatory memorandum dedicated to the expected economic effects of the limitation of payments of wages in cash.

title: Opinion of the European Central Bank of 8 February 2013 on limitations on cash payments in the context of payment of wages (CON/2013/11)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 8 February 2013 on limitations on cash payments in the context of payment of wages (

text: ) Introduction and legal basis

text: On 11 January 2013, the European Central Bank (ECB) received a request from the Finnish Ministry of Employment and the Economy for an opinion on a draft law amending Chapter 2 Section 16 of the Law 1 2 on employment contracts and Chapter 2 and Chapter 8 Section 4 of the Law on accounting (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 second indent of

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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to means of payment. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: The draft law is part of a Government action programme for 2012-2015 , which aims, inter alia, to combat tax evasion. The draft law provides that wages should, as a general rule, be paid into a bank account designated by the employee. The aim is to reduce the use of cash, and thereby to make it more difficult for employers to make undocumented payment of wages.

text: 2. General observations

text: 2.1 The ECB notes that the draft law is in compliance with Union law , and in particular with

text: recital 19

text: of

text: Council Regulation (EC) No 974/98 of 3 May 1998

text: on the introduction of the euro , which states that ‘limitations on payments in notes and coins, established by Member States for public

text: reasons, are not incompatible with the status of legal tender of euro banknotes and coins, provided that other lawful means for the settlement of monetary debts are available’. The ECB acknowledges that: (i) such other lawful means for the settlement of monetary debts, other than cash, are available in Finland; and (ii) the draft law’s objective of combating tax evasion qualifies as a public reason outweighing the impact of the limitations on cash payments. 2.2 However, limitations on payments in cash should be proportionate to the objectives pursued and should not go beyond what is necessary to achieve such objectives, especially in view of the fact that the restrictive measures of the draft law may also affect relatively low value payments. Any negative impact of the proposed limitations should be carefully weighed against the public benefits expected to be derived from them.

text: 3. Specific observations

text: 3.1 The ECB understands that the proposed limitations on payments in cash would only affect the payment of wages, while payments in cash in relation to other transactions (such as between businesses, and between businesses and customers) would not be affected. 3.2 The ECB notes that payment of wages in cash would still be allowed under the draft law for ‘compelling reasons’. While the draft law does not define the meaning of ‘compelling reasons’, the explanatory memorandum refers to situations where, for reasons beyond the control of the employer, an employee would not otherwise have access to their wages within the time period agreed or stipulated by law (e.g. where the employment contract is terminated with immediate effect) and to situations where an employee does not have a bank account. 3.3 In addition, the ECB notes that the draft law does not require employees who do not already have a bank account to open one for the payment of their wages; such employees would still be entitled to have their wages paid in cash. In this context, the ECB also notes that while the failure to include in the accounting documents a receipt (or other form of documentation of cash payment of wages) signed by the employee would constitute an accounting violation punishable by a fine under the draft law, the payment of wages in cash would not of itself constitute a punishable violation or crime. 3.4 The ECB further notes that, according to the explanatory memorandum, cash payments and the holding of large amounts of cash are not typical business practices in Finland. 3.5 In addition, the ECB acknowledges that the Finnish Ministry of Employment and the Economy has conducted a thorough analysis of the expected economic effects of the restrictive measures on cash payments of wages laid down in the draft law . According to this analysis, the draft law would result in a very small increase of costs for a minority of employers, whereas there would be no increase in costs for the majority of employers, as payment of wages into a bank account is already standard practice in Finland.

text: 3.6 Against this background, the ECB is of the view that the proposed restrictions on cash payments as described above appear to be proportionate to the objectives pursued by the draft law. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 8 February 2013. [signed]

text: The President of the ECB

text: Mario DRAGHI


text: OJ L 189, 3.7.1998, p. 42. 2 Law CXII of 1996.

text: Law CXXXVI of 2007. 4 Law XLIII of 1996. 5 Law CXCIX of 2011. 6 Law XXXIII of 1992. 7 Law I of 2012.

text: OJ L 341, 27.12.2007, p. 1.

title: Opinion of the European Central Bank of 12 February 2013 on deposit taking and securities account management by the Treasury (CON/2013/12)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 12 February 2013 on deposit taking and securities account management by the Treasury (

text: ) Introduction and legal basis

text: On 21 January 2013, the European Central Bank (ECB) received a request from the Hungarian Ministry for the National Economy for an opinion on the draft law amending several laws implementing Government Resolution 1101/2012 (IV. 5.) on measures necessary to increase the stock of government debt held by households (hereinafter ‘the Government Resolution’). 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: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law concerns rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: The draft law amends several laws as follows. (i) The Law on credit institutions and financial enterprises to enable the Hungarian Treasury to accept deposits. These amendments will, inter alia, provide for: (a) the conditions for the Hungarian Financial Supervisory Authority (HFSA) to grant and revoke a licence for the Treasury to accept deposits and manage securities accounts; (b) the Treasury to join the Hungarian Deposit Insurance Fund; (c) the Treasury providing information on its activities, similarly to credit institutions, to the relevant authorities; (d) the Treasury to be subject to the supervision of the HFSA, which will have the power to impose sanctions on the Treasury should it not meet the statutory requirements for accepting deposits and managing securities accounts.

text: (ii) The Law on preventing and combating money laundering and terrorist financing to ensure that the Treasury is subject to the same requirements in combating money laundering as any other financial institution. (iii) Several laws governing specific employment relationships (laws on the officers of the armed 4 5 6 7 forces , the civil servants , the public servants and the Labour Code ) to enable public service employees to give a standing order to their employers to transfer a specific amount of their salaries monthly to a securities account held at the Treasury for the purposes of purchasing government securities. In the understanding of the ECB, the standing order would be voluntary, revocable and subject to automatic revocation on termination of the employment relationship. The draft law prohibits public sector employers from charging employees for making the transfers to the Treasury. The draft law will enter into force on 1 April 2013. The Treasury would be subject to a licensing procedure and significant restructuring of its activities and institutional set-up for its new tasks. In this respect, the draft law does not specify when the Treasury would start providing these new services to the public and to public service employees.

text: 2. General observations

text: 2.1 Scope of the consultation

text: The ECB assesses only the broader implications of the draft law for financial stability and for the financial soundness of the proposed new Treasury activities. Given that the draft law is part of a wider legislative framework mentioned in paragraph 5, on which the ECB has no further information, a comprehensive assessment of the detailed rules for entrusting the Treasury with deposit taking and securities account management is beyond the scope of this opinion. However, the ECB has to be consulted on all additional elements of this wider legislative framework which fall within its competence under

text: Article 2 of Decision 98/415/EC

text: , also with a view to Article 127(5) of the Treaty, which provides that the European System of Central Banks contributes to the smooth conduct of policies pursued by the competent authorities relating to the prudential supervision of credit institutions and the stability of the financial system.

text: 2.2 Appropriate time to consult the ECB

text: The ECB received the request from the Ministry for the National Economy for an urgent consultation on the draft law on 21 January 2013, requesting the ECB’s opinion to be adopted by 11 February 2013.

text: According to

text: Article 4 of Decision 98/415/EC

text: , the ECB must be consulted ‘at an appropriate stage’ in the legislative process. This implies that the consultation should take place at a point in the legislative process that affords the ECB sufficient time to examine the draft legislative provisions and adopt its opinion. Following from the wording of

text: Article 3(4) of Decision 98/415/EC

text: , Member States are obliged to suspend the process for adoption of the draft legislative provision pending submission of the ECB’s opinion to allow the relevant national authorities to meaningfully consider the ECB’s opinion prior to adoption of the provisions. In this respect, the ECB once again stresses that even cases of particular urgency do not relieve national authorities from their duty to consult the ECB at an appropriate stage in legislative process that allows sufficient time for (i) the ECB to examine the draft legislative provisions and adopt its opinion, and (ii) the national authorities to take into account the ECB’s views in accordance with Decision

text: . Therefore, the ECB would appreciate the Ministry honouring its obligation to consult the ECB in due time in the future.

text: 3. Prohibition on monetary financing

text: Article 123(1) of the Treaty prohibits overdraft facilities or any other type of credit facility with the ECB or the national central banks of the Member States in favour of Union institutions, bodies, offices or agencies, central governments, regional, local or other public authorities, other bodies governed by public law, or public undertakings of Member States, and the purchase of debt instruments directly from them by the ECB or national central banks. This prohibition prevents 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. The ECB understands that the Treasury will not become a credit institution. Therefore, provided the ECB’s understanding is correct and the Treasury will remain part of the public sector within the meaning of Article 123 of the Treaty, and will not be an eligible counterparty for central bank refinancing operations, the ECB has no monetary financing concerns at this stage of the legislation.

text: 4. Impact of the draft law on financial institutions

text: Though intended to facilitate households’ access to the government bond market, the draft law gives the Treasury broader powers to act as a deposit-taking institution. The draft law does not explicitly preclude the Treasury from offering ATM withdrawals and bank transfers, or using the float on household accounts held with it, i.e. any portion of the transferred funds that is not immediately invested in government securities, to temporarily finance the deficit. Deposit-taking would place the Treasury, a public institution, in direct competition with banks, which are operated as for-profit commercial entities. Unless the unit of the Treasury entrusted with deposit services to households is completely ring-fenced from the rest of the Treasury functions, and is subjected to the same regulatory, supervisory and tax burden as commercial banks, the Treasury will have an advantage

text: over commercial banks in attracting deposits. This could distort competition in the banking sector and potentially lead funds currently available to banks to be diverted to direct financing of the Government. The resultant reduced lending capacity of banks would further limit corporations’ and households’ access to credit, potentially undercutting economic growth. In addition, any associated loss of net interest and fee income by banks will lower their profitability. Therefore, the ECB recommends that a comprehensive impact study of the draft law on the financial sector, with input from affected parties such as banks and investment firms, is carried out prior to submitting the draft law to Parliament. Based on the findings, steps should be taken to minimise the potential adverse impacts of such measures on financial stability and the economy.

text: 5. Suitability of the Treasury to carry out the new tasks

text: In general, it is possible for the State as a shareholder to own credit institutions carrying out semi-public functions while operating under general market conditions, with the shareholder bearing all the consequences of the credit institution carrying out its functions at a profit or at a loss. However, the draft law does not follow this approach. An entity entrusted with the new tasks set out in the draft law should also be provided with the expertise, structural set-up and financial resources necessary to carry out these functions. The draft law entails no such provisions. The ECB is aware of that the draft law is part of a planned broader legislative framework to implement the Government Resolution. As managing deposit and securities accounts for the public are not core tasks for a budgetary institution, the Government Resolution foresees the amendment of several legal acts, and also provides for several agreements to enable the Treasury to, inter alia, develop its information technology infrastructure and obtain new offices for the public to access. Furthermore, it provides for the Government Debt Management Agency to change its practice relating to the maturity of government bonds intended for households, the possibility to involve the Hungarian Postal Services and its offices for the public to open accounts with the Treasury, and, similarly, the possibility to involve government public service offices for this purpose. However, the ECB has no further information on any of the additional draft laws and arrangements necessary to implement the Government Resolution. The envisioned new tasks must not interfere with the proper functioning of the core Treasury tasks or with sound practices of public debt management. More specifically, a possible shortening of government debt maturities would tend to increase short-term fiscal vulnerabilities due to higher rollover risks. As regards the provisions of the Government Resolution creating a wider framework for the draft law, the ECB notes that any changes in the Government Debt Management Agency’s practice relating to the maturity of government bonds should minimise fiscal risks. Also with respect to the observations below, the ECB is of the view that an entity operating as a credit institution rather than a budgetary institution should provide for a more transparent and prudent operational framework for the fulfilment of these tasks.

text: 6. Effectiveness of the safeguards assigned to the new activities of the Treasury

text: The draft law introduces safeguards for the lawfulness of the Treasury’s new deposit-taking activities. Deposit-taking by the Treasury would in effect result in the Treasury operating as a bank, so such activities would be subject to regular banking supervision. As both the Treasury and the HFSA are public institutions run by the State, it must be ensured that the Treasury is properly supervised and that the HFSA’s micro-prudential supervision treats the Treasury equally to other credit institutions.

text: 7. Provision of information on deposit taking liabilities to the national central bank

text: The ECB supports the provision of information by the Treasury on deposit taking liabilities to the national central bank, as they may be regarded as central government deposit liabilities with a monetary character. The ECB directs the national authorities to

text: Article 6

text: and Part 3 of Annex III to Guideline ECB/2007/9 of 1 August 2007 on monetary, financial institutions and market statistics .

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

text: Done at Frankfurt am Main, 12 February 2013.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


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

text: The preparatory works (p. 2) refer to the Vickers proposal which is based on the concept of ring-fencing, i.e. isolating from the rest of the banking sector credit institutions that collect deposits from individuals and small and medium-sized enterprises. Such works also refer to the Volcker rule in the United States, which aims to reduce excessive risk-taking by banks, by prohibiting banks from proprietary trading and from owning or sponsoring private equity and hedge funds. These works refer, finally, to the group of experts appointed in October 2012 by the European Commission and chaired by the Governor of the central bank of Finland, Erkki Liikanen, which aims to make deposit banks stronger and to limit the risk of involving taxpayers in supporting banking groups excessively engaged in trading activities.

text: Decision No 115/2011 of 23 June 2011 of the Belgian Constitution Court required changes to the calculation of the annual contribution to the Belgian deposit guarantee scheme.

text: The ECB notes that this amendment would also follow

text: Article 94(2)

text: (c) and (7) of the proposal for a directive of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investments firms and amending Council Directives

text: and

text: , Directive

text: and

text: and

text: Regulation (EU) No 1093/2010

text: (COM(2012) 280 final). 7 Directive

text: of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit of the business of credit institutions (recast) (OJ L 177, 30.6.2006, p. 1), and Directive

text: of the European Parliament and of the Council of 14 June 2006 on the capital adequacy of investment firms and credit institutions (OJ L 177, 30.6.2006, p. 201).

title: Opinion of the European Central Bank of 18 February 2013 on the amended calculation of the annual financial stability contribution (CON/2013/13)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 18 February 2013 on the amended calculation of the annual financial stability contribution (

text: ) Introduction and legal basis

text: On 5 February 2013, 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 law amending the Law of 28 December 2011 establishing a financial stability contribution (hereinafter the ‘draft law’). The ECB was requested to deliver an opinion under extremely urgent circumstances. The ECB’s competence to deliver an opinion is based on Article 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the fifth and sixth indents of

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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , since the draft law relates to settlement systems and the 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 In order to improve the method for calculating the annual financial stability contribution set out in the Law of 28 December 2011, on which the ECB was previously consulted , the draft law aims to adjust the financial stability contribution according to the level of risks of the assets held by Belgian credit institutions. 1.2 The method for calculating the financial stability contribution – which currently amounts to 0.035% of all credit institutions’ total liability after deduction of (i) deposits eligible for reimbursement by the Belgian deposit guarantee scheme, and (ii) their regulatory capital, regardless of their activities – would differ, depending on whether (a) the credit institution is systemically important within the meaning of

text: Article 36

text: /3, § 2 of the Law of 22 February 1998 establishing the Organic Statute of the Nationale Bank van België/Banque Nationale de Belgique (hereinafter the

text: ‘NBB Statute’) and whether (b) such credit institution acts as depository within the meaning of the Royal Decree No 62 of 10 November 1967 on the deposit of fungible financial instruments and the settlement of transactions in respect of such instruments. 1.3 Under the draft law, the financial stability contribution for the systemically important credit institutions would be adjusted from 1 January 2014, as they potentially incur a greater market risk and are hence more likely to trigger intervention by the stability fund. Such increase is calculated on a consolidated basis and on the basis of a risk indicator defined as the ratio of (i) the total financial assets held for trading, after deduction of 80% of the total of derivatives held for trading to (ii) the balance sheet total. The preparatory works for the draft law consider such approach in line with the structural reform measures currently under discussion in the European Union and the United States in order to protect deposit-taking banks against risk-taking activities . 1.4 The systemic risk posed by credit institutions acting as a central securities depository and/or a securities settlement system differs from risk posed by other credit institutions, in view of their inherently different activities, volatility of the balance sheet’s size, liabilities’ structure and regulatory regime. Hence, the draft law sets out a regime prevailing over the regime applicable to systemically important credit institutions. First, the rate of the financial stability contribution is increased from 3.5 to 9.5 basis points. Second, to limit the negative effects of excessive balance sheet volatility, such rate is applied to an annual average of month-end figures rather than such amount calculated at 31 December of the year preceding collection of the financial stability contribution. Third, such rate applies to the total of (i) the amounts due to credit institutions defined as any term accounts and any debts resulting from assignments and advances, (ii) amounts due to customers defined as any term deposits or deposits with notice, any special deposits and any debts to other creditors, (iii) all liabilities represented by securities, and (iv) subordinated liabilities. Such adaptations would be applicable to the financial stability contribution for 2013.

text: 2. Specific observations

text: 2.1 The ECB welcomes the draft law, which adjusts the calculation of the financial stability contribution in proportion to the risk profile of the credit institutions, as defined with reference to the importance of its trading activities, off-balance sheet exposure and systemic importance for the market in question. In this manner, such adjustment would align the calculation of the financial stability contribution to that of the annual contribution to the Belgian deposit guarantee scheme .

text: In addition, such amendments would contribute to the overall clarity and transparency of the financing mechanism of the Resolution Fund . In that context, the ECB emphasises that Member States should act in a coordinated manner in order to avoid significant differences in national implementation having a counterproductive effect. Against this background, any national measure should ensure a sufficiently level playing field within the euro area, which is of key importance to maintaining the integrity of the euro area banking system. 2.2 The ECB notes, nevertheless, that any alignment of the contribution by type of assets might encourage credit institutions to favour derivative activities at the expense of other trading activities which are not exempted under the draft law. Furthermore, this would complicate the cross-border harmonisation of derivative activities throughout the European Union. 2.3 The credit activity of central securities depositaries is mostly limited to intraday credit, which is not covered by the micro-prudential rules under Directives

text: and

text: due to the difficulty in addressing very short term exposures. Therefore, a different method of calculation of the ratio is justified in order to take into account, on the one hand, the short duration of the exposure towards their participants and, on the other hand, their systemic role as utilities on the market they serve. The ECB nevertheless encourages the Belgian legislator to follow the ongoing work initiated by CPSS-IOSCO and the European Commission with respect to their internal organisation and the recovery and resolution plans for securities settlement systems, which might have an impact on the calculation of the financial stability contribution.

text: Done at Frankfurt am Main, 18 February 2013.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: OJ L 189, 3.7.1998, p. 42. 2 Published in Dziennik Ustaw (Dz. U.) of 4 September 2006 No 157, item 1119. 3 Dz. U. of 2011 No 126, item 715.

text: Consolidated text published in Dz. U. of 2012, item 1376 (hereinafter the ‘Law on banking’). 5 See, for instance, the European Commission’s Green Paper on shadow banking (COM(2012) 102 final) and the Eurosystem’s reply to the European Commission’s Green Paper on shadow banking. Available on the ECB’s website at www.ecb.europa.eu. 6

text: 8 COM(2011) 142 final. 9 On the draft law’s approach to the protection of banking secrecy, see also the explanatory memorandum to the draft law, p. 16.

title: Opinion of the European Central Bank of 20 February 2013 on the financial market supervision framework (CON/2013/14)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 20 February 2013 on the financial market supervision framework (

text: ) Introduction and legal basis

text: On 14 January 2013, the European Central Bank (ECB) received a request from the Polish Parliament (Sejm) for an opinion on a draft law amending the Law on financial market supervision and 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 sixth indent of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to the 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 main aim of the draft law is to enhance consumer protection in the financial market supervision framework to address the rising importance of, and risks associated with, non-bank entities granting consumer credit that are not subject to financial supervision by the Financial Supervision Authority (Komisja Nadzoru Finansowego, KNF). To this end, the draft law amends the Law of 21 July 2006 on financial market supervision and the Law of 12 May 2011 on consumer credit as follows: (a) the definition of financial market supervision objectives is extended, focusing on the provision of reliable information on the functioning of the financial market, to enhance consumer protection in financial supervision;

text: (b) the KNF’s task of informing and educating the public is further defined as encompassing information on the functioning of the financial market and the relevant risks, and on entities operating on the financial market, with a view to protecting legitimate interests of the financial market participants; (c) the enhanced KNF informational and educational tasks will be carried out by means of broadcasting warnings and announcements on the public radio and television or, if necessary, other mass media; (d) entities granting consumer credit will be obliged to inform the consumer whether or not they are subject to KNF’s financial supervision; (e) creditworthiness assessment-related provisions and respective definitions included in the Law on consumer credit are amended to ensure that the criteria for creditworthiness assessment applied by banks and non-bank lenders are aligned, and that such assessment is based on reliable information. 1.2 Additionally, the Law of 29 August 1997 on banking is amended to enable access by non-bank entities granting consumer credit to creditworthiness-related information held in the relevant databases created by banks, subject to the consent of the data subject.

text: 2. Consumer protection

text: 2.1 The draft law emphasises educating, informing and warning consumers of financial services about the risks associated with the operation of the financial market and its participants. The ECB understands that these measures are designed to address, in particular, the risks associated with loans granted by non-bank entities that are not subject to KNF’s supervision. The ECB welcomes the measures introduced by the draft law as they aim to strengthen consumer protection and thereby contribute to safeguarding the stability of the financial system and preserving confidence in the marketplace. In this context, and from a broader perspective, the ECB also draws the Polish legislator’s attention to the recent discussion on the need to properly monitor and supervise the shadow banking sector in Europe . 2.2 Furthermore, the ECB would like to draw the consulting authority’s attention to the need to bring national legislation into line also with anticipated Union legislation of relevance from an investor and consumer protection perspective, once such legislation is adopted. This includes: (i) the proposal for a directive of the European Parliament and of the Council on markets in financial instruments repealing Directive

text: of the European Parliament and of the Council ,

text: (ii) the proposal for a regulation of the European Parliament and of the Council on key information documents for investment products , and (iii) the proposal for a directive of the European Parliament and of the Council on credit agreements relating to residential property .

text: 3. Access and reporting to relevant databases

text: Under the draft law, non-bank entities granting consumer credit are granted access to information stored in databases created by banks and covered by banking secrecy. In this respect, the ECB makes the following observations. First, it is noted that if both banks, and non-bank entities granting consumer credit, alike were required to report their lending data as regards consumers to databases such as those referred to above, this would ensure symmetry in terms of the reporting of and access to information on such databases, and would assist banks to better assess the creditworthiness of their customers, as well as to monitor and manage credit risk efficiently, thereby strengthening the stability of the financial system. Second, the ECB notes that the following additional safeguards apply to the provision by means of the databases of information to non-bank entities granting consumer credit: (i) information is provided subject to the consent of the data subject; and (ii) information is provided only to the extent necessary for the purposes of assessing the creditworthiness of the consumer. While it is acknowledged that such safeguards will help to protect information covered by banking secrecy , it should be ensured that adequate confidentiality requirements apply to non-bank entities granting consumer credit where information covered by banking secrecy is received and used by them under the proposed

text: Article 105(4)

text: (4) of the Law on banking.

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

text: Done at Frankfurt am Main, 20 February 2013.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: OJ L 189, 3.7.1998, p. 42. 2 Article 71 of the Statute of the Bank of Greece was last amended by

text: Article 165(7)

text: (i) of Law 4099/2012 (FEK th 250/20.12.2012) ratifying the decision of the 79 Annual General Meeting of Shareholders of the Bank of Greece of 24 April 2012. A new paragraph 3 was added to

text: Article 71

text: , expressly enabling the Bank of Greece to transfer to the Greek State for the financial years 2012-2020 its income from bonds it held in its investment portfolio on 31 December 2011. The ECB issued Opinion

text: on the relevant draft provisions. All ECB Opinions are published on the ECB’s website at www.ecb.europa.eu.

text: Available on the Council’s website at www.consilium.europa.eu.

text: See also paragraph 3.1.1 of Opinion

text: See also paragraph 3.1.2 of Opinion

text: See also page 27 of ECB’s Convergence Report 2012.

text: See codified Law 2190/1920 on sociétés anonymes in particular

text: Articles 44

text: a et seq. According to Article 72 of the Statute of the Bank of Greece, the provisions of the laws on sociétés anonymes and banks apply to the Bank of Greece, unless they conflict with its Statute.

title: Opinion of the European Central Bank of 20 February 2013 on the profit distribution of the Bank of Greece (CON/2013/15)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 20 February 2013 on the profit distribution of the Bank of Greece (

text: ) Introduction and legal basis

text: On 31 January 2013, the European Central Bank (ECB) received a request from the Bank of Greece for an opinion on draft legislative provisions amending the Statute of the Bank of Greece (hereinafter the ‘draft provisions’). 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 indent of

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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft provisions relate to the Bank of Greece. 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 provisions

text: The draft provisions amend Article 71(3) of the Statute of the Bank of Greece on the appropriation of its profits . In particular, the proposed amendment expressly enables the Bank of Greece to transfer to the Greek State its income accruing from its Securities Market Programme (SMP) portfolio.

text: 2. General observations

text: The ECB notes that the proposed amendment to the Statute of the Bank of Greece has to be seen in the context of the Eurogroup statement on Greece of 27 November 2012 . According to this statement, the euro area Member States would be prepared to consider initiatives, including a ‘commitment by Member

text: States to pass on to Greece’s segregated account, an amount equivalent to the income on the SMP portfolio accruing to their national central bank as from budget year 2013’.

text: 3. Transfer of Bank of Greece’s SMP income to the Greek State

text: 3.1 Article 71(3) of the Statute of the Bank of Greece currently provides that exceptionally for the fiscal years 2012 to 2020, and following a decision of its General Council implementing an international agreement, the Bank of Greece’s income resulting from Greek government bonds held in its investment portfolio on 31 December 2011 may be transferred to the Greek State. It further specifies that the transfer of such income will take place after the payment of the 12% dividend on the capital, provided that the regular reserve fund has been funded up to the amount of the capital of the Bank of Greece and that the income transferred does not exceed the remaining amount of net profits. While the draft provisions are intended to supplement

text: Article 71(3)

text: , the ECB notes that their interaction with the other provisions of

text: Article 71

text: on the appropriation of the Bank of Greece’s profits must ensure a robust framework for the profit distribution by the Bank of Greece, as outlined below. 3.2 The transfer of the Bank of Greece’s investment portfolio income currently provided for in

text: Article 71(3)

text: , as well as of the SMP income under the draft provisions, must comply with the monetary financing prohibition laid down in Article 123 of the Treaty, which prohibits overdraft facilities or any other type of credit facility with a national central bank (NCB) in favour of the public sector. Article 123 of the Treaty prohibits, in particular, the distribution of central bank profits that have not been fully realised, accounted for and audited and the distribution of income outside the statutory profit distribution rules. In order to comply with the monetary financing prohibition, the Bank of Greece’s income from Greek government bonds as well as from the SMP portfolio may only be transferred to the State as part of the normal profit distribution and subject to the condition that the net profit of the year exceeds that income . The draft provisions may create the impression that it is not the ‘profits’ but ‘income’ stemming from these bonds that is the subject of the transfer. An amendment to the draft provisions would thus be warranted, to reflect the above profit distribution principle. This would ensure clarity and be consistent with the scope of application of

text: Article 71

text: , which is the sole Article of Section XIII entitled ‘Appropriation of profits’. 3.3 In addition, the distribution of profits must comply with the principle of financial independence . 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 . The ECB understands that the financial provisions specified in the first sentence of

text: Article 71(1)

text: will always be constituted prior to the distribution of

text: any profits, including where the exceptional distribution rules of

text: Article 71(3)

text: apply. In relation to accumulated losses from previous years, the ECB notes that currently

text: Article 71(1)

text: does not explicitly provide that such losses may be covered prior to the profit distribution. The ECB understands that the relevant principles on profit distribution enshrined in Greek company law apply in this respect and that, according to such principles, accumulated losses from previous years are covered before profit distribution . However, in line with the requirements for financial independence, as described above, and considering that other deductible items are explicitly referred to in

text: Article 71(1)

text: , the consulting authority could consider amending the profit distribution rules specified in the Statute of the Bank of Greece in order to explicitly provide that profits may be distributed to the State budget not only after the above financial provisions have been created but also after any such accumulated losses from previous years have been covered.

text: [signed]

text: The Vice-President of the ECB

text: Vítor CONSTÂNCIO


text: Further information is available in the IMF’s press release No 12/368 of 28 September 2012, available on the IMF’s website at www.imf.org.

text: 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.

text: See, most recently, Opinions

text: , CON 2012/45 and

text: See also Opinions

text: and

text: . 7 See also Opinions

text: and

title: Opinion of the European Central Bank of 4 March 2013 on the Oesterreichische Nationalbank’s contributions to the International Monetary Fund’s Poverty Reduction and Growth Trust and a bilateral loan agreement between the International Monetary Fund and the Oesterreichische Nationalbank (CON/2013/16)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 4 March 2013 on the Oesterreichische Nationalbank’s contributions to the International Monetary Fund’s Poverty Reduction and Growth Trust and a bilateral loan agreement between the International Monetary Fund and the Oesterreichische Nationalbank (

text: ) Introduction and legal basis

text: On 31 January 2013, the European Central Bank (ECB) received requests from the Austrian Ministry of Finance for an opinion on two draft laws concerning (a) contributions by the Oesterreichische Nationalbank (OeNB) to the General Subsidy Account of the International Monetary Fund’s (IMF) Poverty Reduction and Growth Trust (PRGT) (hereinafter the ‘draft law on contributions to the PRGT’) and (b) a bilateral loan agreement between the IMF and the OeNB (hereinafter the ‘draft law on the bilateral loan agreement’). 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: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to the OeNB. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft laws

text: 1.1 The draft law on contributions to the PRGT

text: 1.1.1 The IMF’s Executive Board agreed in two resolutions passed on 24 February and 28 September 2012 to distribute 700 million Special Drawing Rights (SDR) and SDR 1.750 million from IMF’s windfall gold sales profits to IMF member countries in proportion to their quota shares. The distributions are subject to IMF members’ satisfactory assurances that an amount equivalent to at least 90% of the distributions will be made available to the PRGT . In this way, the IMF envisages raising further subsidy resources for the PRGT .

text: 1.1.2 The draft law authorises the OeNB to transfer 21.76 million SDR to the General Subsidy Account of the PRGT on behalf of Austria. The amount will be transferred in two tranches, of SDR 6.22 million and SDR 15.54 million. The amount of the first tranche has already been distributed by the IMF to the OeNB as Austria’s share of the IMF’s windfall gold sales profits and can therefore be transferred by the OeNB to the General Subsidy Account of the PRGT. However, payment of the second tranche is subject to the transfer of the equivalent amount to the OeNB by the IMF and, furthermore, to satisfactory assurances by IMF member countries that an amount equivalent to at least 90% of the second distribution of windfall gold sales profits will be allocated to the PRGT. 1.1.3 A separate statutory authorisation is required to enable the OeNB to transfer the abovementioned amounts of SDR 6.22 million and SDR 15.54 million to the PRGT, because Article 41(2) of the Law on the OeNB prohibits Austria from using OeNB funds, even indirectly, for any purpose without providing the equivalent value in gold or foreign exchange.

text: 1.2 The draft law on the bilateral loan agreement

text: 1.2.1 The G20 Cannes Summit of 4 November 2011 adopted a recommendation to temporarily replenish IMF funds in response to persistently weak economic growth. Based on Austria’s share of the IMF quota for the Member States whose currency is the euro, the Austrian contribution to this bilateral IMF funding is EUR 6.13 billion. 1.2.2 The draft law implements resolutions of the Euro Area Heads of State or Government of 9 December 2011 and the Union Finance Ministers dated 19 December 2011, respectively, whereby Member States whose currency is the euro consented to provide EUR 150 billion to the IMF on the basis of bilateral agreements. It authorises the OeNB to grant the IMF a loan to the maximum amount of EUR 6.13 billion under a bilateral agreement on behalf of Austria.

text: 2. Monetary financing prohibition

text: 2.1 Several ECB opinions have noted that 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 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 . Pursuant to

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

text: , the financing by national central banks of obligations falling upon the public sector vis-à-vis the IMF is not regarded as a credit facility within the meaning of Article 123 of the Treaty. The fourteenth recital of

text: Regulation (EC) No 3603/93

text: sets out the rationale of the exemption and confirms that it is appropriate to authorise the financing by the national central banks of obligations falling upon the public sector vis-à-vis the IMF, as this financing results in claims which have all the characteristics of reserve assets. 2.2 The draft law on contributions to the PRGT is similar to the draft laws addressed in Opinion

text: and

text: , where the ECB considered that the OeNB’s financing of

text: Austrian contributions to the Heavily Indebted Poor Countries and the PRGT initiatives fell within the

text: Article 7

text: exemption of

text: Regulation (EC) No 3603/93

text: . Similarly, the OeNB’s PRGT financing under the draft law should also be considered as falling under the

text: Article 7

text: exemption and therefore should not be regarded as a form of monetary financing prohibited by the Treaty. 2.3 The draft law on the bilateral loan agreement is similar to that addressed in Opinion

text: , where the ECB considered that the OeNB’s authorisation to grant a loan to the IMF on behalf of Austria under the IMF’s New Arrangement to Borrow scheme was not a credit facility within the meaning of

text: Article 104

text: , but fell within the

text: Article 7

text: exception of

text: Regulation (EC) No 3603/93

text: . The OeNB’s authority, under the draft law, to grant a bilateral loan to the IMF should also be considered as falling under the

text: Article 7

text: exception of

text: Regulation (EC) No 3603/93

text: and should therefore not be regarded as a form of monetary financing prohibited by the Treaty .

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

text: Done at Frankfurt am Main, 4 March 2013.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI