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

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

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

text: Opinion

text: , especially paragraph 2.1. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

text: Article 36

text: /33 § 3 of the Organic Law of the NBB, as amended by Article 9 of the draft law. 5 Directive

text: of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (OJ L 176, 27.6.2013, p. 338). 6

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

text: conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 20.10.2013, p. 63). 7 The ECB notes that these two paragraphs will be amended by the Law on various amendments accompanying the draft Law on status and supervision of credit institutions, which was submitted to the ECB for its opinion on 3 January 2014.

text: The ECB was consulted on 3 January 2014 on the draft Law on the status and supervision of credit institutions and on the draft Law on various amendments. 9 See the Proposal for a regulation of the European Parliament and of the Council on improving securities settlement in the European Union and on central securities depositories (CSDs) and amending Directive

text: , COM (2012), final.

text: Article 11 of the draft law, which introduces a new

text: Article 36

text: /34, § 3 in the Organic Law of the NBB. 11 See in this respect,

text: Recital 24

text: of

text: Regulation (EU) No 1024/2013

text: , which specifically provides that national competent authorities or national designated authorities and the ECB shall act in respect of any coordination procedure provided for in such acts after having followed the procedures provided for in that same regulation. 12

text: Regulation (EU) No 1092/2010

text: of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board (OJ L 331, 15.12.2010, p. 1).

title: Opinion of the European Central Bank of 13 February 2014 on the macro-prudential mandate and instruments of the NBB (CON/2014/16)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 13 February 2014 on the macro-prudential mandate and instruments of the NBB (

text: ) Introduction and legal basis

text: On 10 January 2014, the European Central Bank (ECB) received a request from the Minister for Finance for an opinion on a draft law establishing instruments of macro-prudential policy and specifying the tasks assigned to the Nationale Bank van België/Banque Nationale de Belgique (NBB) in the context of its mission to contribute to the stability of the financial system (hereinafter the ‘draft law’). The ECB was asked to deliver an opinion within one month so that the ECB’s opinion could be taken into consideration before the draft law is submitted to the Belgian Parliament. 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 third, fourth and sixth indents of

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

text: 1. Purpose of the draft law

text: 1.1 The draft law implements Recommendation

text: . 1.2 Under the draft law the NBB’s mandate is to ‘contribute to the stability of the financial system’, which concept is defined as ‘a situation in which the probability of lack of continuity, or disruption, of the functioning of the financial system is low or, if such disruptions were to occur, their effects on the economy would be limited’. To achieve the objective of contributing to financial stability, the NBB will have the following powers: (a) to detect and monitor different factors and developments which may affect the stability of the financial system; (b) to issue recommendations on measures to be implemented by the competent authorities, in order to contribute to the stability of the financial system as a whole, particularly through (i) strengthening the robustness of the

text: financial system, (ii) preventing the occurrence of systemic risks, and (iii) limiting the effect of potential disruptions; and (c) to adopt measures falling within the ambit of its own competences with a view to achieving the objectives described under (b) above. The draft law stipulates that the principle of independence – provided for in Article 130 of the Treaty – will apply to the NBB when acting in the context of contributing to the stability of the financial system. 1.3 The draft law also sets out specific accountability mechanisms under which the NBB is to provide the Chamber of Representatives with an annual report on its activities in the areas of prudential supervision and contributing to the stability of the financial system. The Governor of the NBB may also be invited to hearings before the competent committees of the Chamber of Representatives, be it at the request of such committees or at the Governor’s own initiative. 1.4 In order to strengthen the framework for the collection of information, the draft law authorises the NBB to use any information in its possession or to make use of any entitlements to information it has in the context of its other tasks (including that of prudential supervision). The NBB may also require a private entity that is not subject to its supervision to provide it with any information that entity has which would be useful for discharging the NBB’s macro-prudential mandate. Failure to comply with such requirements may be penalised by the imposition of administrative fines. Communication of such information to the NBB might be ensured by means of the control function exercised by other competent authorities over the private entity in question. Finally, the NBB may enter into arrangements to cooperate with the ECB, the European Systemic Risk Board (ESRB), the European supervisory authorities (ESAs) and foreign authorities with competence in the field of macro-prudential supervision, and it may exchange confidential information with those organisations. 1.5 The draft law provides that, in discharging its macro-prudential mandate, the NBB may, without prejudice to the competences assigned to the ECB, use any of the following tools in respect of financial institutions: (a) the power to impose own funds requirements or additional liquidity requirements in respect of all credit institutions or specific categories of credit institutions; (b) the power to impose specific requirements as regards own funds, which may vary depending on the nature of exposures, the value of collateral received by the credit institution concerned, the areas of activity or the geographic area of operation of the debtors, such measures being in addition to or stricter than those applied in the context of prudential supervision; (c) the power to impose quantitative limits on exposures in respect of an individual counterparty or a group of linked counterparties; (d) the power to impose limits on the total levels of activity of institutions, as a percentage of their own funds, which are in addition to or stricter than those applied in the context of prudential supervision; (e) the power to impose conditions for the valuation of collateral accepted against credits extended for verifying compliance with the requirements regarding solvency as provided for under or in accordance with prudential legislation; (f) booking all or part of the distributable profits to an account which cannot be accessed by the institution concerned; (g) the power to impose asset valuation rules different from those imposed under accounting rules

text: in the context of prudential supervision; (h) the power to require the disclosure of information in addition to that which may be required under prudential supervision rules in respect of all credit institutions or those belonging to a specific category; and (i) the power to issue public statements on the adoption of the abovementioned measures and their corresponding objectives. Prior to imposing any of the abovementioned measures, the NBB shall inform the ESRB, the ECB and, if necessary, the ESAs and the European Commission. Prior to imposing own funds requirements or any measures intended to reduce systemic risks, the NBB must take into account objections raised by the ECB or any other European authority. 1.6 The NBB may issue recommendations to the ECB or any other Union authorities on measures to be adopted and implemented in order to contribute to the stability of the financial system as a whole, be it by means of measures intended to strengthen the robustness of the financial system, to anticipate the occurrence of systemic risks or to limit the potential effects of disruption. National authorities to whom recommendations are addressed are requested to provide the NBB with a formal opinion giving reasons why those recommendations are not followed. If recommendations issued by the NBB addressed to federal national authorities are not followed, the King may decide to adopt the measures necessary to implement the NBB recommendation concerned by means of a royal decree adopted in the Council of Ministers.

text: 2. General observations

text: 2.1 The ECB supports the effective design of macro-prudential policy frameworks within the Member States, in line with the guiding principles expressed in Recommendation

text: . The ECB welcomes the fact that the NBB plays a leading role in this respect, given its expertise and existing responsibilities in the area of financial stability . 2.2 The ECB furthermore welcomes that the NBB, in respect of the discharge of this macro-prudential mandate, enjoys the same degree of independence as established in Article 130 of the Treaty, which shall also be adequately balanced with the strengthened accountability of the NBB before the Chamber of Representatives. In the interests of clarity, it would, however, be appropriate to exclude the power of the Minister of Finance to exercise control over decisions made by the NBB in the discharge of its macro-prudential mandate under Article 22 of the Organic Law of the NBB which, in its current form, excludes such control only in respect of the European System of Central Banks’ tasks and operations and the prudential supervision described in

text: Article 12

text: bis of the Organic Law of the NBB. Without prejudice to the principle of independence and this proposed change, the Organic Law of the NBB could be further amended in order to establish specific mechanisms for cooperating with any authority whose actions have a material impact on financial stability, in accordance with Recommendation B.2 of Recommendation

text: 2.3 The ECB welcomes the strengthening of the methods for collecting information. The ECB also welcomes the fact that the NBB may require a wide range of private entities to provide information and that they may be subject to administrative fines in the event of failure to comply with those requirements. While the ECB also welcomes the fact that domestic authorities must provide the NBB, at its request, with any information useful for the discharge of its macro-economic mandate , it nevertheless recommends that those authorities should be required by law to communicate the information concerned at their own initiative. 2.4 The ECB understands that, once collected in accordance with the mechanisms described under paragraph 2.3 above, information may be shared with the ECB, the ESRB, the ESAs or other domestic supervisory authorities in accordance with cooperation agreements to be entered into between the NBB and the organisations in question. However, such agreements should not be necessary for the exchange of information falling within the ambit of Articles

text: and

text: of Directive 2013/36/EU of the European Parliament and of the Council , and

text: Article 6(2) of Council Regulation (EU) No 1024/2013

text: , between the NBB and authorities competent in the areas of prudential supervision, macro-prudential supervision, banking resolution and recovery, the ECB, the central banks of the European System of Central Banks (ESCB), the ESRB and the ESAs. The ECB recommends that cooperation arrangements as referred to above should be without prejudice to

text: Article 36

text: /14, 1° and 2° of the Organic Law of the NBB, pursuant to which the NBB may provide information to the ECB and ESCB central banks in certain cases. This includes cases when the information concerned is relevant for discharging the mandate of the ECB and of the ESCB central banks with regard to monetary policy, emergency liquidity assistance, oversight of payment and securities settlement systems, and safeguarding the stability of the financial system, especially in cases of emergency, and where the information is relevant to the institutions entrusted with a macro-prudential mandate. In the interests of clarity, it is also advisable to include a cross-reference to

text: Article 36

text: /34 § 4, as amended by

text: Article 36

text: /14 of the draft law, in order to have a comprehensive and consistent list of all cases in which the NBB may share confidential information with other authorities.

text: 3. Specific comments

text: 3.1 The draft law sets out comprehensive mechanisms further substantiating the already existing macro-prudential responsibilities of the NBB. In the period since the financial crisis began, the Belgian legislator in 2011 entrusted the NBB with specific tools described in

text: Article 36

text: /3 of the

text: Organic Law of the NBB in order to: (a) detect potential threats to the stability of the financial system, especially through monitoring and assessing strategic evolutions and profiling systemically important financial institutions; (b) issue opinions to the federal government and parliament on the measures necessary or useful for the stability, good functioning and efficiency of the financial system of the country; (c) coordinate the management of the financial crisis; and (d) contribute to the objectives of international and European institutions involved in the matters described under (a), (b) and (c) above, including in particular the ESRB. Financial institutions designated by the NBB as systemically important, and notified of this designation, must provide their proposed strategic decisions to the NBB, which may oppose such decisions. The NBB may also impose specific measures regarding solvency, liquidity, risk concentration and risk positions on the abovementioned systemically important financial institutions. Previous reforms also gave the NBB the power to take extraordinary measures, including the forced transfer to the State or any other domestic or foreign public-law entity of assets, credits, categories of activity, securities or pools of securities held by such central securities depositories vis-à-vis central securities depositories and assimilated institutions. This aimed at avoiding a situation whereby financial stability might be disrupted domestically or globally by a breach of the law by those entities or by mismanagement, liquidity problems, operational and administrative or accounting problems arising within the entities in question. 3.2 The ECB understands that the new macro-prudential tools introduced by the draft law are without prejudice to the two abovementioned regimes, which shall therefore remain unchanged. As part of the comprehensive reform of the status and supervision of credit institutions ,

text: Article 36

text: /3 of the Organic Law of the NBB will, however, be amended in order to exempt credit institutions designated by the NBB as systemically important, and notified of this designation, from the requirement to provide the NBB with their strategic decisions. Such a requirement will be imposed in the future on all credit institutions as part of micro-prudential supervision. Future legal developments may affect the macro-prudential supervision of financial institutions other than credit institutions, especially the Proposal for a regulation of the European Parliament and of the Council on improving securities settlement in the European Union and on central securities depositories (CSDs) . The ECB recommends, for the sake of clarity of the Organic Law of the NBB, that the Belgian legislator reflects on the appropriateness of maintaining three different sets of provisions on macro-prudential supervision. This is particularly appropriate in view of the similarities between

text: Articles 36

text: /3 and 36/34, both of which apply to financial institutions on which the NBB may impose requirements relating to own funds, liquidity, risk concentration and risk positions with a view to contributing to the stability of the financial system. Should these two provisions nonetheless remain separate, the mechanism for designating systemically important institutions

text: should also be reflected in

text: Article 36

text: /34, in order to comply with Recommendation C.3 of Recommendation

text: . This mechanism is currently provided for in

text: Article 36

text: /3 only, and will apply in the near future to financial institutions other than credit institutions. 3.3 The draft law provides that the NBB, in the application of its macro-prudential powers, is to take into account the recommendations of the ESRB and the views of the Commission and the ECB, in particular when the ECB applies stricter requirements for capital buffers or other measures aimed at addressing systemic risk . In this respect, the ECB recommends that the draft law is further aligned with the procedures set out in relevant Union law and in particular those of

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

text: . 3.4 This opinion is without prejudice to the conclusions of the ESRB’s follow-up assessment, which will be prepared pursuant to

text: Article 17 of Regulation (EU) No 1092/2010

text: of the European Parliament and of the Council .

text: Done at Frankfurt am Main, 13 February 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


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

text: of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms (OJ L 176, 27.6.2013, p. 338). 3

text: Regulation (EU) No 575/2013

text: of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms (OJ L 176, 27.6.2013, p. 1).

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

text: conferring specific tasks on the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63). 5 ‘Réformes bancaires structurelles en Belgique: rapport final’, July 2013, available on the NBB website at www.nbb.be. 6 2 October 2012, available on the European Commission’s website at www.ec.europa.eu. 7 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 (COM(2012) 280 final). 8 Available on the Bank for International Settlements’ website at www.bis.org. 9 ‘Accord de Gouvernement 1 décembre 2011’, available on the Belgian Prime Minister’s website at www.premier.fgov.be, especially Section 2.4.3, p. 115 and following. 10 Law of 22 February 1998 establishing the Organic Law of the NBB. 11

text: Council Directive 2008/114/EC of 8 December 2008

text: on the identification and designation of European critical infrastructures and the assessment of the need to improve their protection (OJ L 345, 23.12.2008, p. 75).

text: COM(2014) 43 final. 13 The ECB commented on an early draft of the Law of 2 July 2010 in Opinion

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 14 The ECB commented on an early draft of the Royal Decree of 3 March 2011 in Opinion

text: . 15 Opinion

text: See the amendments contained in the second draft law to

text: Article 12

text: bis, first paragraph of the Organic Law of the NBB. 17 Royal Decree of 17 July 2012 on covering the operating expenses of the NBB in connection with the supervision on financial institutions. 18 Article 77 of the first draft law.

text: , Section 2.1. 20 See the first draft law,

text: Article 390

text: onwards.

text: Article 119 of the first draft law. 22

text: Article 121(1)

text: to (5) of the first draft law. 23 Article 122 of the first draft law. 24 Article 128 of the first draft law. 25 See the Law of 28 December 2011 on the financial stability contribution. 26 See Opinion

text: . 27 See the NBB Structural Reforms Report, p. 17, Section 4 in fine.

text: Opinions

text: and

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 14 February 2014 on the status and supervision of credit institutions (CON/2014/17)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 14 February 2014 on the status and supervision of credit institutions (

text: ) Introduction and legal basis

type: rubrik

text: On 3 January 2014, the European Central Bank (ECB) received a request from the Belgian Minister for Finance for an opinion on a draft law on the status and supervision of credit institutions (hereinafter the ‘first draft law’) and a draft law on various related provisions (hereinafter the ‘second draft law’). The ECB has been asked to deliver its opinion within one month so that the opinion can be taken into consideration before the draft law is submitted to the Belgian Parliament. 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, fifth and sixth indents of

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

text: , since the first and second draft laws relate to the Nationale Bank van België/Banque Nationale de Belgique (NBB), payment and settlement systems and 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 first draft law replaces the Law of 22 March 1993 on the legal status and supervision of credit institutions with a new law under the same name, and introduces several important changes. Firstly, it implements Directive

text: of the European Parliament and of the Council into Belgian law and effects changes to and clarifications of Belgian law made necessary by

text: Regulation (EU) No 575/2013

text: of the European Parliament and the Council . Secondly, the first draft law adapts the legal framework for the supervision of credit institutions in the light of the participation of the NBB in the Single Supervisory Mechanism (SSM), governed by Council

text: Regulation (EU) No 1024/2013

text: . Thirdly, in accordance with the Structural Reforms Report of the NBB , issued pursuant to the Final Report of the High-level Expert Group on reforming the structure of the EU banking sector , the first draft law contains provisions ensuring the separation of the activities of credit institutions by reference to the level of risk posed to investors’ deposits. Anticipating the adoption of the European Commission’s Proposal for a directive on the recovery and resolution of credit institutions and investment firms (hereinafter the ‘proposed BRRD’), the first draft law also contains comprehensive rules on the resolution and recovery of credit institutions. It also takes into account the outcome of the Financial Sector Assessment Program (FSAP) conducted by the International Monetary Fund in Belgium, which recommended specific changes intended to ensure the overall compliance of the first draft law with the Core Principles for Effective Banking Supervision . In addition to pursuing the abovementioned objectives, the first draft law implements the recommendations issued by the parliamentary committees established by the Belgian Parliament following the financial crisis with a view to restoring investor confidence in the stability of the financial and banking system . 1.2 The main purpose of the second draft law is to amend various items of Belgian legislation that are directly impacted by the first draft law. In particular, the second draft law amends the Organic Law of the NBB by providing for the establishment of a resolution board within the NBB, the disclosure of legal acts and decisions taken by the NBB in implementing Directive

text: and the amendment of the procedures followed by the NBB in imposing administrative fines. The second draft law also assigns to the NBB the task of identifying critical infrastructures in the financial sector, in accordance with

text: Council Directive 2008/114/EC

text: . In this capacity, the NBB already monitors compliance with the Belgian rules implementing Directive

text: , including the Law of 1 July 2011 on the security and protection of critical infrastructures (hereinafter the ‘Belgian law on critical infrastructures’) and may for this purpose use any information in its possession in the context of its responsibilities for banking supervision and oversight.

text: 2. General observations

text: 2.1 The ECB welcomes the first draft law, which consolidates within one clear, concise and wellstructured legal act all the relevant provisions relating to credit institutions. It implements Directive

text: , reflects the participation of the NBB in the SSM and anticipates the adoption of the proposed BRRD. 2.2 The ECB nevertheless recommends that the Belgian authorities closely monitor any further EU legal developments in the areas covered by the draft laws, including the anticipated adoption of the proposed BRRD and the Proposal for a regulation of the European Parliament and of the Council on structural measures improving the resilience of EU credit institutions (hereinafter the ‘proposed Structural Measures Regulation’), and amend the draft laws accordingly.

text: 3. New tasks entrusted to the NBB

text: 3.1 In line with the ‘twin peaks model’ introduced in Belgium by the Law of 2 July 2010 and the Royal Decree of 3 March 2011 , the first draft law makes the NBB, which is already the sole entity responsible for the financial sector’s micro- and macro-prudential stability, the national authority responsible for implementing Directive

text: and the SSM. In addition, the second draft law establishes a resolution board within the NBB. Furthermore, the NBB will also act as the relevant authority for the purposes of the Belgian law on critical infrastructures. In line with its previous opinions , the ECB welcomes the further integration of the financial institutional framework within the NBB, which will enhance the ability of the NBB to ensure financial stability and prevent or mitigate systemic risks. 3.2. In the interest of transparency, the ECB recommends that the NBB be given a more formal mandate in the field of banking recovery and reform, which could be achieved by means of a separate provision in Chapter II of the Organic Law of the NBB (‘missions and operations’). In line with

text: Article 8

text: (a) of the proposed BRRD, such a provision should also limit the liability of the NBB and its staff in the course of carrying out the relevant tasks. 3.3 From an operational and financial point of view, any new task allocated to an NCB should not affect its ability to discharge its ESCB-related tasks. Financial independence, which is an element of the principle of central bank independence referred to in Article 130 of the Treaty, requires that an NCB must have sufficient means to carry out its national tasks as well as its ESCB- or Eurosystem-related tasks. Such financial independence is assessed in terms of whether any third party is able to exercise either direct or indirect influence over an NCB task and whether the NCB

text: is able to fulfil its mandate, both operationally in terms of manpower, and financially in terms of appropriate financial resources. 3.4 The ECB welcomes the fact that the second draft law extends the existing mechanism of expense recovery set out in the Royal Decree of 17 July 2012 to the expenses incurred by the NBB in the context of Directive

text: and the SSM. The ECB also welcomes Article 272 of the first draft law, which authorises the NBB to recover ‘any reasonable expenses properly incurred in connection with the use of the resolution tools or powers’. Such recovery may be made directly from the institution under resolution, or indirectly from other institutions involved in the implementation of such resolution tools, and is protected by a statutory lien on all movable assets of the institution under resolution. Article 245(2) of the first draft law expressly provides that the valuation fees payable to experts must be ‘reasonable expenses properly incurred in connection with the use of the resolution tools or powers’. However, the ECB would welcome the introduction of a more general provision, similar to

text: Article 12

text: bis(4) of the Organic Law of the NBB relating to banking supervision, allowing the NBB to recoup all costs associated with the exercise of this new mandate. 3.5 It is noted that the new mandate of the NBB to monitor due compliance with Belgian law on critical infrastructures will be exercised in respect of financial institutions that are already subject to the supervisory powers of the NBB. In accordance with the first and second paragraphs of Article 12 of the Royal Decree of 17 July 2012, the expenses of the NBB incurred in the exercise of this mandate shall be reimbursed in full by the institutions so supervised, which means that no issue of financial independence will arise.

text: 4. Implementation of Directive

text: The ECB welcomes the fact that the first draft law implements the optional provisions of Directive

text: , in particular the systemic risk buffer, thereby providing the NBB and ECB with the broadest possible range of prudential tools. The first draft law also requires credit institutions to submit any proposed strategic decision to the competent supervisory authority for prior approval , and promotes the use of internal risk assessment methods. By these means, the first draft law contributes to consistency in the implementation of these tools and this process across all participating Member States, thereby helping to ensure a level playing field and lowering the risk of regulatory arbitrage. These aims will be further promoted by precise implementation of the transposition into and application under national law of the micro- and macro-prudential tools

text: contained in Directive

text: and the requirements falling under the remit of

text: Regulation (EU) No 1024/2013

text: 5. Participation of the NBB in the SSM

text: Regulation (EU) No 1024/2013

text: allocates the competences and powers in respect of the macroprudential supervision of credit institutions between the ECB and the national competent authorities. The first draft law seeks to reflect, for the sake of transparency, the set of regulatory tools at the ECB’s disposal to perform its micro- and macro-prudential competences, irrespective of whether such tools are extensively described in

text: Regulation (EU) No 1024/2013

text: , and hence common to all participating Member States; or are those only available to the national authorities, and hence specific to Belgium. For this purpose, given that it is impossible at this stage to determine whether the national authority or the ECB is competent to exercise certain prerogatives or take specific measures, the first draft law refers to ‘the supervisory authority’, defined in

text: Article 3(4)

text: as ‘the NBB or the ECB, depending on the allocation of competences provided for or stipulated in accordance with

text: Regulation (EU) No 1024/2013

text: in the field of supervision of credit institutions’. Transitional provisions also lay down, with effect from 4 November 2014, a more precise allocation of competences between the NBB and the ECB as regards the licensing process, changes in the structure of the capital of credit institutions, the withdrawal of licences and exceptional recovery measures. 5.2 The ECB welcomes this legislative approach, which aims to provide the public with comprehensive information on the set of tools available to the NBB and/or the ECB, depending on the area and timing of supervision, and also welcomes the fact that this approach is appropriately documented in the explanatory memorandum to the first draft law. The ECB notes that in the event of inconsistencies EU legislation prevails over national law.

text: 6. Introduction of parts of the BRRD

text: 6.1 The first draft law implements into Belgian law the provisions of the proposed BRRD relating to recovery plans, resolution plans, resolution instruments (including the sale of business tool, the bridge institution tool and the asset separation tool), as well as safeguards and procedural requirements. 6.2 However, some of the provisions of the proposed BRRD have not been implemented at this stage and some existing provisions in Belgian law may need to be amended once the proposed BRRD is adopted. The ECB trusts that the Belgian authorities will monitor EU legal developments in this regard and amend the first draft law in a timely manner.

text: 6.3 Without prejudice to the above, the ECB notes that in

text: Article 245(1)

text: (7), the application of resolution instruments should be without prejudice to the equal treatment of creditors of the same rank, which is stricter than the corresponding

text: Article 29(1)

text: (e), which refers to the equal treatment of creditors of the same class. In order to ensure a broader application of the former provision, it should be aligned with the relevant provision in the proposed BRRD.

text: 7. Separation of activities

text: 7.1 In line with the recommendation of the NBB in its Structural Reforms Report, the first draft law imposes on credit institutions that collect deposits or issue securities governed by the Belgian deposit protection scheme a mandatory separation of their activities related to trading on their own account . Credit institutions must conduct own-account trading activities via a separate legal entity unless such activities exclusively relate to the provision to clients of investment and auxiliary services, market-making activities, activities for the hedging of risk for credit institutions, sound and prudent management of the liquid assets of credit institutions and the purchase and sale of financial instruments acquired as long-term holdings and are carried out in accordance with 23 24 certain governance, internal control and reporting requirements . 7.2 This measure, the very purpose of which is to protect the deposits, seeks to reduce the overall exposure of credit institutions to trading activities and encourage such institutions to focus on their core activities, thereby also simplifying their resolution in the event of financial difficulties. To this end, the Belgian authorities had already adjusted the financial stability contribution in accordance with the level of risk of the assets held by Belgian credit institutions . Moreover, following a recommendation made in its Structural Reforms Report, the NBB had already imposed additional own funds requirements on credit institutions, which shall be amended in order to ensure its compatibility with Directive

text: . The same report also urged the immediate introduction in Belgium of the abovementioned separation of own-account trading activities in the absence of any structural reform at EU level. However, it also recommended that such measures be reviewed in the event of any such structural reform at EU level . 7.3 The proposed Structural Measures Regulation contains a provision to the effect that proprietary trading in financial instruments and commodities be conducted through a separate legal entity. This provision would apply to credit institutions deemed to be of ‘global systemic importance’ in terms of the significance of their total assets (more than EUR 30 billion for three consecutive years) and their total trading assets and liabilities (more than EUR 70 billion or 10 per cent of their total

text: assets). Proprietary trading is defined narrowly as the taking of positions for making a profit for own account, without any connection to client activity or hedging the entity’s risk, thereby excluding cash management. Article 21(1) of the proposed Structural Measures Regulation provides that the Commission may grant a derogation from this prohibition to a credit institution that is subject to primary legislation adopted by 29 January 2014, provided that the Commission declares such legislation to be compatible with the proposed Structural Measures Regulation. 7.4 In view of the above, the ECB trusts that the Belgian authorities will closely monitor the evolution of the proposed Structural Measures Regulation and consider whether it would be appropriate to immediately impose requirements on the separation of own-account trading activities on all Belgian credit institutions, irrespective of the thresholds described in the proposed Structural Measures Regulation. As highlighted in previous ECB opinions , given that these measures primarily address internationally active credit institutions, the ECB considers coordination and consistency to be important at Union level, in order to avoid regulatory arbitrage and to ensure a level playing field.

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

text: Done at Frankfurt am Main, 14 February 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI

type: vagledning

utgivare: ecb


text: OJ C 41, 14.2.2012, p. 1.

text: Consolidated text published in Dz. U. of 2013 item 908. 4 Dz. U. of 1995 No 4, item 18. 5 Dz. U. of 2006 No 157, item 1119. 6 Dz. U. of 2008 No 209, item 1317. 7 See also Opinion

text: and paragraph 3.5 of Opinion

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

text: See, for example, paragraph 2.1 of Opinion

text: , paragraph 2.1 of Opinion

text: , paragraph 2.1 of Opinion

text: and paragraph 2.1 of Opinion

text: . 10 See Articles 8(2) and 11(4) of the draft law, which additionally seem to be inconsistent with second sentence of Article 6(2) of the draft law. 11 See recommendation B(3). See also

text: recital 24

text: of

text: Regulation (EU) No 1092/2010

text: of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board (OJ L 331, 15.12.2010, p. 1). 12 See paragraph 4 of Opinion

text: and paragraph 3.2 of Opinion

text: COM/2012/0280 final, available on the Commission’s website at www.europa.eu. 14

text: Articles 13

text: to

text: Article 14

text: a of the draft law, Article 10 of the Law on the Financial Stability Committee. 15 Article 9 of the draft law, Article 8 of the Law on the Financial Stability Committee.

title: Opinion of the European Central Bank of 18 February 2014 on the macro-prudential oversight of the financial system (CON/2014/18)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 18 February 2014 on the macro-prudential oversight of the financial system (

text: ) Introduction and legal basis

text: On 13 January 2014, the European Central Bank (ECB) received a request from the Polish Minister for Finance for an opinion on a draft law on the macro-prudential oversight of the national financial system (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third and sixth indents of

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

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

text: 1. Purpose of the draft law

text: 1.1 The draft law implements Recommendation

text: of the European Systemic Risk Board of 22 December 2011 on the macro-prudential mandate of national authorities . 1.2 To this end, a Systemic Risk Board (hereinafter the ‘Board’) is established as the authority responsible for the conduct of macro-prudential oversight. The Board is composed of: (a) the NBP’s President, as Chairman; (b) the Finance Minister, as Deputy Chairman; (c) the Chairman of the Financial Supervision Authority; and (d) the President of the Bank Guarantee Fund. The Board is to pursue the objective of strengthening the national financial system’s resilience to systemic risk, thereby contributing to long-term and sustainable economic growth. 1.3 Specifically, the Board’s tasks include: (a) identifying, assessing, monitoring and mitigating systemic risk; (b) applying macro-prudential instruments by adopting resolutions that may take the form of: (i) opinions; (ii) warnings and recommendations addressed to the authorities from which the

text: Board draws its members; (iii) warnings addressed to a specific part of or the entire financial market; (c) monitoring compliance with its recommendations; (d) identifying systemically important financial institutions and recommending specific supervisory requirements to be applied to them; (e) cooperating with the European Systemic Risk Board and other Union institutions and bodies as well as macro-prudential authorities in other Member States and international organisations. 1.4 Additionally, the draft law amends, inter alia, the following laws: (a) the Law of 29 August 1997 on Narodowy Bank Polski , by enabling NBP to provide the Board with organisational and administrative support and the information necessary for the performance of its macro-prudential mandate and by setting an additional task for NBP defined as taking action aimed at mitigating systemic risk; (b) the Law of 14 December 1994 on the Bank Guarantee Fund , by authorising the Bank Guarantee Fund to provide to the Board information on entities covered by the deposit guarantee scheme operated by the Bank Guarantee Fund; (c) the Law of 21 July 2006 on supervision of the financial market , by allowing the Financial Supervision Authority to provide the Board with the information necessary for the performance of its macro-prudential mandate; (d) the Law of 7 November 2008 on the Financial Stability Committee , aiming to ensure that the Board’s tasks do not overlap with those of the Financial Stability Committee, an existing body with a financial stability mandate . 1.5 The draft law also transposes into Polish legislation that part of Directive

text: of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms , which relates to procedures for the imposition of capital buffers.

text: 2. General observation

text: The ECB supports the establishment of effective macro-prudential policy frameworks within the Member States that are in line with the guiding principles expressed in Recommendation

text: . Moreover,

text: national central banks should play a leading role in macro-prudential oversight, together with the ECB, given their expertise and existing responsibilities in the area of financial stability .

text: 3. Specific observations

text: 3.1 NBP’s role in the performance of the Board’s mandate 3.1.1 The ECB notes that the draft law grants important powers to NBP in the performance of the Board’s macro-prudential mandate, in particular: (a) by designating NBP President as Chairman of the Board with the right of a casting vote; and (b) by assigning the task of supporting the Board’s activities to NBP, by ensuring its secretariat and preparing its meetings and draft resolutions. However, the ECB notes that, in the event of the NBP President’s absence, Board meetings may be chaired by the Finance Minister as Deputy Chairman . The ECB considers that having all Board meetings chaired by an NBP representative would facilitate the effective conduct of the macroprudential policy. Replacement arrangements should ensure that NBP plays a leading role in this respect, in line with Recommendation

text: . 3.1.2 Pursuant to Article 17 of the draft law, the Board may issue recommendations addressed to each of the institutions from which the Board draws its members, including NBP. The ECB understands that, if read in conjunction with the definition in Article 2(3) of the draft law,

text: Article 17

text: limits the subject matter of the Board’s recommendations that are addressed to NBP, as well as NBP’s obligation to provide information on the relevant implementation measures under

text: Article 30

text: a(2)(3) of the draft law, to those NBP activities that may contribute to mitigating systemic risk. It is important that NBP’s involvement in the performance of the Board’s mandate and the abovementioned recommendations do not affect: (a) NBP’s institutional, functional and financial independence; or (b) the performance by the European System of Central Banks of its tasks under the Treaty and the Statute of the European System of Central Banks and of the European Central Bank . Thus, for legal certainty reasons, the abovementioned limitation, which may be inferred from

text: Article 17

text: in conjunction with Article 2(3) of the draft law, could be replaced with an explicit provision stating that the Board’s recommendations addressed to NBP are without prejudice to the principle of central bank independence referred to in Article 130 of the Treaty. 3.2 Relations with the Financial Stability Committee In order to avoid an overlap of the Board’s tasks with those of the Financial Stability Committee, the draft law discontinues the Committee’s regular meetings and terminates its analytical function,

text: thereby transforming it into a body responsible for developing and coordinating crisis management procedures and tasks between members of the Committee. This crucial coordination task will remain necessary, since the ECB understands that the Bank Guarantee Fund, one of the institutions represented on the Committee, may be designated as a resolution authority as defined in 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 . However, overlaps in the institutional status and powers of the Board and of the Committee, as well as identical composition under different chairmanship, could give rise to a lack of clarity with regard to the allocation of responsibilities or to unnecessary duplication of tasks. While recognising that crisis management coordination might necessitate different governance arrangements from those of the macro-prudential oversight function, a number of responsibilities that are assigned to the Committee and the Board in parallel could be more uniformly regulated, in particular such competences as the exchange of information between members or the establishment of working groups . The ECB encourages the Polish authorities to review this aspect.

text: 4. Other issues

text: This opinion is without prejudice to the conclusions of the follow-up assessment of Recommendation

text: , which the ESRB will prepare in accordance with

text: Article 17 of Regulation (EU) No 1092/2010

text: Done at Frankfurt am Main, 18 February 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


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

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

text: In accordance with Article 10(2) of Legislative Decree No 43 of 10 March 1998, referred to in Article 6(5) of the Decree-Law, whereby the amendments to the Statute of the Banca d’Italia, once approved by the assembly of shareholders of the Banca d’Italia are finally adopted by means of a Presidential Decree, adopted on a proposal by the President of the Council of Ministers acting together with the Ministry of the Treasury, t he Budget and Economic Planning.

text: See Article 3 of the Statute of the Banca d’Italia.

text: See Law No 5 of 29 January 2014, published in the Gazzetta Ufficiale della Repubblica Italiana No 23, 29.01.2014. The ECB was not consulted on the amendments to the Decree-Law. 6 See Article 3(4) of the Statute of the Banca d’Italia. It should however be noted that, in line with

text: Article 6(5)

text: (c) of Law No 5 of 29 January 2014, for an interim period lasting no longer than 36 months starting from completion of capital increase, shares exceeding the 3% threshold shall not bestow voting rights but shall attribute related dividends. 7 See

text: Article 6(5)

text: (b) of Law No 5 of 29 January 2014. 8 Article 6(3) of the Statute of the Banca d’Italia. 9 Article 7(2) of the Statute of the Banca d’Italia. 10 Article 9(1) of the Statute of the Banca d’Italia. 11 Article 10(1) of the Statute of the Banca d’Italia. 12 Article 20(2), 28(2) and 31(1) of the Statute of the Banca d’Italia. 13 Articles 22 and 25 of the Statute of the Banca d’Italia.

text: See the ECB’s Convergence Report 2013, p. 26. 15 Article 40(3) of the Statute of the Banca d’Italia. 16 See the ECB’s Convergence Report 2013, p. 25. 17 Article 41(2) of the Statute of the Banca d’Italia.

text: See for example the ECB’s Convergence Report 2013 p. 24.

text: See Principle 2 of the Core Principles for Effective Banking Supervision. See also paragraph 5.3 of Opinion

text: . 20

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

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

title: Opinion of the European Central Bank of 21 February 2014 on changes in the governance of the Banca d’Italia (CON/2014/19)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 21 February 2014 on changes in the governance of the Banca d’Italia (

text: ) Introduction and legal basis

text: On 6 December 2013, a request for an opinion was sent by the Banca d’Italia to the European Central Bank (ECB) regarding amendments to the Statute of the Banca d’Italia (hereinafter the ‘amendments’). The amendments implement the principles laid down in Decree-Law No 133 of 30 November 2013 (hereinafter the ‘Decree-Law’) and address elements of the Banca d’Italia’s capital and governance. The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the amendments relate to the Banca d’Italia. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the amendments

text: 1.1 The Decree-Law provides for an increase of the Banca d’Italia’s capital and lays down principles for the amendments; the ECB issued Opinion

text: on the Decree-Law. Following the adoption of the Decree-Law, an extraordinary meeting of the Banca d’Italia’s shareholders approved the amendments on 23 December 2013, in accordance with the procedure for amending the Statute of the Banca d’Italia . This procedure was completed by the transposition of the amendments by means of the Presidential Decree of 27 December 2013. 1.2 The amendments include provisions on the Banca d’Italia’s capital, in accordance with the Decree- Law. The Banca d’Italia’s share capital, set by the Banking Law of 1936 at EUR 156 000, is raised to EUR 7.5 billion pursuant to the Decree-Law and the amendments. The range of eligible

text: shareholders is not defined by the Statute of the Banca d’Italia which, in this respect, refers to applicable law, i.e. Article 4(4) of the Decree-Law. The Decree-Law has been converted into Law No 5 of 29 January 2014 (hereinafter the ‘Law’). In the process of conversion, the Italian Parliament made changes to the Decree-Law to the effect that only the following institutions are allowed to hold shares: (a) banks, insurance and reinsurance enterprises having their registered and head offices in Italy; (b) banking foundations established under Article 27 of Legislative Decree No 153 of 17 January 1999; and (c) Italian welfare institutions and pension funds established under Article 4(1) of the Legislative Decree No 252 of 5 December 2005. The amendments also make reference to the cap on voting rights exceeding the threshold of the Banca d’Italia’s share capital: shares exceeding such threshold must accordingly be disposed of by the time limit set by the Board of Directors, with related dividends attributed to the statutory reserves . In accordance with the Law, the amendments also enable the Banca d’Italia to buy back its own shares from shareholders and temporarily hold them, in order to foster compliance with the limit imposed on individual shareholdings. 1.3 The amendments also transpose the provisions introduced by the Law on the economic rights attached to the shares of the Banca d’Italia capital in the Statute of the Banca d’Italia. Such economic rights consist of: (a) the value of the shares themselves; and (b) the annual dividend distributions. The maximum amount of dividends that can be distributed to shareholders from the net profit of the Banca d’Italia is capped to six per cent of its capital. Further pay-outs to shareholders from reserves, formerly granted by

text: Article 40

text: , are to be excluded in future. 1.4 The amendments also include changes to the Banca d’Italia’s governance. In particular, the 8 9 minimum percentage shareholding required to call a meeting of shareholders , to set the agenda 10 11 and to exercise voting rights are increased. The quorum for meetings is also increased . In addition, pursuant to Article 5(2) of the Law, amended

text: Article 16

text: lays down specific requirements of independence, integrity and experience for the members of the Board of Directors. These requirements are also applicable to auditors, councillors and regents . Moreover, the Governing Board is entrusted with decision-making powers in tasks related to the European System of Central Banks (ESCB), without prejudice to the powers and duties reserved to the Governor as a member of the ECB’s decision-making bodies .

text: 2. The appropriate time to consult the ECB

text: The request for an opinion on the draft amendments was sent by the Banca d’Italia on 6 December 2013. The request stated that the Board of Directors’ meeting had been convened for 20 December 2013. The amendments were approved by the shareholders’ extraordinary meeting on 23 December 2013 and then transposed by means of a Presidential Decree on 27 December 2013 published in the Gazzetta Ufficiale on 31 December 2013 and taking effect from the same date. In accordance with

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

text: , the process of adoption of the amended Statute of the Banca d’Italia should have been suspended pending submission of the ECB’s opinion. The ECB would like to draw the attention of the national authorities to the proper procedure for consultation.

text: 3. General observations

text: 3.1 The issues of financial independence of the Banca d’Italia and the necessity for the Banca d’Italia’s reserves to be gradually replenished over an appropriate period of time and up to the amount deemed necessary to safeguard the value of the Banca d’Italia’s capital and assets were specifically addressed in Opinion

text: . Such observations, insofar as relevant for the present purposes, also apply to the amendments. 3.2 The ECB understands that buy-back operations may be carried out by the Banca d’Italia in order to enable shareholders to comply with the limit imposed on shareholdings and that contracts to this effect may be entered into by the Banca d’Italia. Situations, limits, procedures and conditions will be specified by the Banca d’Italia’s Board of Directors in agreement with its Board of Auditors. The ECB observes that, in doing so, the Board of Directors will take as a point of reference the safeguard of the Banca d’Italia’s capital and that the purchase price may not exceed the nominal value of the shares. The ECB also notes that the voting rights of the shares subject to the buy-back will be suspended. Such shares will be computed for the purpose of duly constituting the shareholders’ meeting, whereas they will not be taken into account in the calculation of majorities required to approve resolutions. 3.3 In view of the foregoing considerations, the ECB understands that the Banca d’Italia will decide on such buy-back operations prudently and with due regard to its own financial considerations. 3.4 The ECB notes that, pursuant to Article 3(6) of the Statute of the Banca d’Italia, the buying and selling of transactions shall be carried out in accordance with the principle of transparency and equal treatment of potentially interested parties. It is for the Commission to assess whether the amendments that the Italian legislator made to the Decree-Law, imposing a nationality requirement with regard to shareholders, comply with European Union law.

text: 4. Institutional and financial independence

text: 4.1 Financial independence, which is an aspect of the principle of central bank independence referred to in Article 130 of the Treaty, concerns, inter alia, the profit allocation rules of a national central bank (NCB). An NCB’s statute may prescribe how its profits are to be allocated. In the absence of such provisions, decisions on the allocation of profits should be taken by the NCB’s decision-making bodies on professional grounds, and should not be subject to the discretion of third parties unless there is an express safeguard clause stating that this is without prejudice to the financial means necessary for carrying out the NCB’s ESCB-related tasks as well as national tasks . 4.2 In particular, Article 7 of the Statute of the Banca d’Italia provides for the power of the shareholders to approve the allocation of the net profits in accordance with profit allocation rules laid down in the amended

text: Article 40

text: . These rules provide that the allocation of net profits is determined by the Board of Directors acting on a proposal from the Governing Board following consultation with the Board of Auditors, and is to be presented for approval at the shareholders’ meeting. Net profits are distributed to: (a) ordinary reserves up to 20 per cent of net profits; (b) shareholders up to 6 per cent of the capital; (c) extraordinary reserves and provisions up to a maximum of 20 per cent of net profits; and (d) the State for the remaining sum. The ECB understands that, should the ordinary reserves be reduced to offset losses, net profits will be allocated to the ordinary reserves until the ordinary reserves are replenished . As consistently noted by the ECB , 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 takes note of Article 40(3) of the Statute of the Banca d’Italia, which lays down general principles on the replenishment of ordinary reserves, and expects the Banca d’Italia to interpret these principles adequately, in accordance with the principle of financial independence. In addition, the ECB understands that a provision for general risks shall cover the risks deriving from the overall operations of the Banca d’Italia, and that this provision shall be funded taking into account the general risk level . 4.3 The ECB also welcomes the amendment to Article 6 of the Statute of the Banca d’Italia, which requires that the shareholders’ meeting does not interfere in any way with matters pertaining to the exercise of ESCB-related tasks, and understands that this provision reaffirms the Governor’s and the Governing Board’s exclusive competence on matters related to the exercise of ESCBrelated tasks.

text: 5. Personal independence

text: 5.1 As regards conflicts of interest, the ECB notes in its Convergence Reports that, as a matter of principle, membership of a decision-making body involved in the performance of ESCB-related tasks is incompatible with the exercise of other functions that might create a conflict of interest. In particular, members of such decision-making bodies may not hold an office or have an interest that may influence their activities, whether through office in the executive or legislative branches of the state or in regional or local administrations, or through involvement in a business organisation. The ECB welcomes the reference made in Article 43 of the Statute of the Banca d’Italia to the codes of ethics applicable to staff members and the members of the Governing Board, which lays down general principles on independence and impartiality, ceilings on the acceptance of gifts, conflicts of interest, confidentiality and continuance of duties after cessation of employment. 5.2 Article 18 of the Statute of the Banca d’Italia contains an explicit provision concerning the grounds for dismissal of members of the Governing Board, other than the Governor, by reference to Article 14.2 of the Statute of the European System of Central Banks and of the European Central Bank. The members of the Governing Board, other than the Governor, must have the right to submit any decision to dismiss them to an independent court of law, in order to limit the potential for political discretion in evaluating the grounds for their dismissal. The ECB understands that this right is made available under Italian law on the basis of overriding principles of constitutional law and relevant procedural rules. However, for reasons of legal certainty, it would be advisable to refer to such a right of review in the Statute of the Banca d’Italia .

text: 6. Independence of the Banca d’Italia for prudential supervision

text: The ECB also understands that the amendment to Article 6 of the Statute of the Banca d’Italia, by requiring that the shareholders’ meeting does not interfere in any way with the matters relating to the exercise of the public functions entrusted to the Banca d’Italia by Union law, would also encompass the future performance of the Banca d’Italia’s supervisory tasks, including future tasks related to the Single

text: Supervisory Mechanism (SSM), and thus be in accordance with the principle of independence of supervisors , and the requirement for national competent authorities to act independently within the SSM, as enshrined in Article 19 of Council Regulation No. 1024/2013 .

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

text: Done at Frankfurt am Main, 21 February 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: OJ L 94, 30.3.2012, p. 22. 2

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

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

text: Article 3 of the draft ordinance.

title: Opinion of the European Central Bank of 10 March 2014 on the oversight of credit transfers and direct debits in euro (CON/2014/20)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 10 March 2014 on the oversight of credit transfers and direct debits in euro (

text: ) Introduction and legal basis

text: On 29 January 2014, the European Central Bank (ECB) received a request from Banca Naţională a României (BNR) for an opinion on a draft government emergency ordinance setting out the measures to implement

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 ordinance’). 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, third and fifth indents of

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

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

text: 1. Purpose of the draft ordinance

text: 1.1 The purpose of the draft ordinance is to implement

text: Regulation (EU) No 260/2012

text: (hereinafter the ‘Regulation’) in Romania. More particularly, the draft ordinance designates the competent authority for ensuring compliance with the Regulation, defines redress procedures and penalties, as well as procedures for out-of-court resolution of disputes. 1.2 For this purpose, BNR is designated as the competent authority and is entitled to: (i) cooperate with other competent authorities in EU Member States; (ii) request any relevant information and documents; (iii) carry out on-site inspections at the premises of the entities monitored; (iv) further specify redress procedures and/or apply penalties for non-compliance with the provisions of the Regulation, the delegated acts adopted by the European Commission or relevant BNR regulations; and (v) issue regulations for the implementation of the Regulation and the delegated acts adopted by the Commission.

text: 1.3 BNR will also ‘monitor payment service providers and payment system operators established in Romania which provide payment services in euro and the payment scheme operators referred to in Article 4 of the Regulation’ .

text: 2. Specific observations

text: In order to ensure proper application of the Regulation, the draft ordinance, including in particular its provisions on the designation of BNR as the authority responsible for ensuring compliance with the Regulation, needs to be in line with the wording of the Regulation. In particular, Article 3(2) of the draft ordinance refers to ‘payment scheme operators’, while Article 4(4) of the Regulation refers to ‘payment scheme owners’. The draft ordinance should be amended in this regard since the entity owning a payment scheme might not be the one operating it.

text: Done at Frankfurt am Main, 10 March 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: 3 1.1. The draft law transposes Directives

text: and

text: and gives effect to the 4 5 streamlining resulting from

text: Regulation (EU) No 575/2013

text: and Recommendation

text: . It is also based on international agreements at G20 level . 1.2 The main changes introduced by the draft law are as follows. a) At micro level, it specifies the composition of own funds of credit institutions and investment funds and lays down stricter requirements for Tier1 capital. It strengthens the

title: Opinion of the European Central Bank of 18 March 2014 on financial supervision, macro-prudential supervision and payment systems oversight (CON/2014/21)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 18 March 2014 on financial supervision, macro-prudential supervision and payment systems oversight (

text: ) Introduction and legal basis

text: On 20 February 2014, the European Central Bank (ECB) received a request from the Estonian Ministry of Finance for an opinion on a draft law amending the Law on credit institutions and other acts (hereinafter the ‘draft law’). The draft law also amends the Law on Eesti Pank, particularly relating to its role in respect of macro-prudential supervision and payment systems oversight. 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, fifth and sixth indents of

text: , as the draft relates to Eesti Pank, payment systems and 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: 2 Directive

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

text: and repealing Directives

text: and

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

text: 3 Directive

text: of the European Parliament and of the Council of 8 June 2011 on Alternative Investment Fund Managers and amending Directives

text: and

text: and Regulations

text: (EC) No 1060/2009

text: and

text: (EU) No 1095/2010

text: (OJ L 174, 1.7.2011, p 1).

text: Regulation (EU) No 575/2013

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

text: Regulation (EU) No 648/2012

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

text: 5 Recommendation of the European Systemic Risk Board of 22 December 2011 on the macro-prudential mandate of national authorities (

text: ) (OJ C 41, 14.2.2012, p 1).

text: 6 http://www.bis.org/publ/bcbs220.pdf requirements relating to liquidity and the management of liquidity risk, enhances the supervision of risk management, and lays down stricter publication requirements in order to strengthen market discipline. b) At macro level, it provides for the establishment of a macro-prudential supervision authority. It establishes buffers for credit institutions and investment firms, lays down provisioning requirements, and defines measures aimed at mitigating macro-prudential and systemic risks. c) It sets a leverage ratio for credit institutions and investment firms in order to control sharp increases in leverage. d) It lays down requirements regarding the governance and reporting of alternative investment fund managers (AIFM). 1.3 The draft law gives the Estonian Financial Supervision Authority (FSA) greater supervisory powers over credit institutions. These include the supervision of branches in other countries, and of financial holding companies and mixed financial holding companies. The FSA will also have power to impose administrative penalties and make discretionary supervisory decisions within the limits imposed by the draft law. 1.4 Under the draft law, Eesti Pank will be the competent authority in respect of macro-prudential supervision and payment systems oversight. Eesti Pank currently carries out some payment systems oversight tasks and the draft law provides a national legal basis for these tasks.

text: 2. Financial and macro-prudential supervision

text: 2.1 The draft law stipulates that the objective of macro-prudential supervision is to help safeguard the stability of the financial system as a whole, including by strengthening its resilience and decreasing the build-up of systemic risks, thereby ensuring a sustainable contribution to economic growth. This precisely reflects Recommendation A of Recommendation

text: . 2.2 The draft law confers the new tasks of contributing to the stability of the financial system and ensuring macro-prudential stability on Eesti Pank. 2.3 The ECB supports the design of effective macro-prudential policy frameworks within Member States, in line with the guiding principles laid down in Recommendation

text: . The ECB and the national central banks should play a leading role in macro-prudential oversight, given their expertise and existing responsibilities in the area of financial stability . In this respect, in line with ESRB Recommendation 2011/3, it is important that there are appropriate legally enforceable mechanisms in place to facilitate cooperation between Eesti Pank and other national authorities whose actions have a material impact on financial stability . Similar mechanisms should be set up

text: 7 See paragraph 2.1 of Opinion

text: , paragraph 2.1 of Opinion

text: and paragraph 4.2 of Opinion

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

text: 8 The information exchange between the FSA and Eesti Pank takes place under the Cooperation Agreement of 21 December 2007, the objective of which is the stability of the Estonian financial system and the regulation of financial services and financial markets. This Agreement provides for cooperation in areas such as the establishment of a safety net in the financial sector and the exchange of information with Union institutions and other international organisations (the in order to ensure appropriate cross-border cooperation and exchange of information between Eesti Pank and other national or Union authorities, particularly the European Systemic Risk Board (ESRB). It is also important that there is a clear legal basis for Eesti Pank to make public and private statements on systemic risks. 2.4 From an operational and financial point of view, the allocation of new tasks to a national central bank (NCB) should not affect its ability to carry out its existing tasks. Financial independence, which is an element of the principle of central bank independence referred to in Article 130 of the Treaty, requires that an NCB must have sufficient means to carry out its national tasks as well as its European System of Central Banks or Eurosystem-related tasks. Such financial independence is assessed in terms of whether any third party is able to exercise either direct or indirect influence over an NCB task and whether the NCB is able to fulfil its mandate, both operationally in terms of manpower, and financially in terms of appropriate financial resources . 2.5 In respect of financial supervision, the ECB notes the broader competence of the FSA under the draft law. 2.6 This opinion is without prejudice to the conclusions of the ESRB’s follow-up decision, which will be prepared pursuant to

text: Article 17 of Regulation (EU) No 1092/2010

text: of the European Parliament and of the Council .

text: 3. Transposition of Directive

text: as regards buffers

text: 3.1 The draft law provides for all the buffers specified in Directive

text: , including those that are optional. It is important for both the ECB and national competent authorities or designated authorities to have the broadest possible range of macro-prudential tools at their disposal. Therefore, the ECB welcomes the implementation of all risk buffers, which will ensure the consistency of the available macro-prudential tools and lower the risk of regulatory arbitrage. 3.2 The draft law provides for the calculation of countercyclical buffers for credit institutions on the basis of the total risk exposure calculated pursuant to

text: Article 92(3) of Regulation (EU) No 575/2013

text: and the weighted average of countercyclical buffers calculated pursuant to the rules established by Eesti Pank. Under

text: Article 140 of Directive 2013/36/EU

text: , power is delegated to the Commission to adopt the regulatory technical standards referred to in that article in accordance with

text: Articles 10

text: to 14 of

text: Regulation (EU) No 1093/2010

text: . The methodology for the calculation of the weighted average of countercyclical buffers should be taken into account by Eesti Pank when defining the relevant national rules.

text: World Bank, the International Monetary Fund, the Organisation for Economic Cooperation and Development, etc.), as well as the exchange of information on the state of, and risks in, the financial sector (including its financial infrastructure).

text: 9 See paragraph 3.3 of Opinion

text: Regulation (EU) No 1092/2010

text: of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board (OJ L 331, 15.12.2010, p. 1).

text: 11 See paragraph 3.2 of Opinion

text: 4. Oversight of payment systems

text: 4.1 The draft law sets out that the objective of the oversight of payment systems is to contribute to the development of payment systems and to their sound operation. Eesti Pank will carry out the following tasks in respect of such oversight: (a) analyse the development and operation of payment systems; (b) provide guidance to payment system operators; (c) specify requirements for payment system operators and the operation and development of payment systems, when so required by law; (d) approve operational rules and principles of payment systems, when so required by law. 4.2 The oversight of payment and clearing systems is a Eurosystem task to be conducted in line with the Treaty and the Statute of the European System of Central Banks and of the European Central Bank (hereinafter, the ‘Statute of the ESCB’). This excludes interference with the Eurosystem’s oversight role by any Union or national body other than central banks acting within the framework of the Eurosystem . Furthermore, the aims of such oversight are to maintain systemic stability, promote efficiency and safeguard the transmission channel for monetary policy . The ECB understands that the term ‘payment systems’ is considered to be broadly defined in Estonian law to cover also settlement systems. In the light of the above, the ECB welcomes the aim of formalising Eesti Pank’s oversight function and clarifying and enhancing its regulatory powers in this field. The Estonian law should clarify that Eesti Pank shall take all necessary measures to apply the rules laid down by the Eurosystem with a view to ensuring efficient and sound payment and clearing systems in line with Article 127 of the Treaty, and Articles 3 and 22 of the Statute of the ESCB, as well as to ensure efficient and sound settlement systems.

text: Done at Frankfurt am Main, 18 March 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI

text: 12 See paragraph 2.1.2 of Opinion

text: 13 See paragraph 2.1.1 of Opinion


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

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

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

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

title: Opinion of the European Central Bank of 20 March 2014 on the conflict of interest rules for senior officials of the Banco de España (CON/2014/22)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 20 March 2014 on the conflict of interest rules for senior officials of the Banco de España (

text: ) Introduction and legal basis

text: On 14 February 2014, the European Central Bank (ECB) received a request from the Banco de España for an opinion on a draft resolution of the Banco de España’s Governing Council amending the Banco de España’s Internal Rules of 28 March 2000 as regards the conflict of interest rules for senior officials of the Banco de España (hereinafter the ‘draft resolution’). The ECB’s competence to deliver an opinion is based on Article 127(4) and Article 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

text: , as the draft resolution relates to the Banco de España. 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 resolution

text: 1.1 The draft resolution amends the Banco de España’s Internal Rules in order to eliminate the current differences between the treatment of the Secretary-General and Directors-General of the Banco de España on the one hand, and senior public sector officials on the other, as regards restrictions on the exercise of private activities after termination of office. 1.2 The draft resolution provides for the qualified restriction on providing services in private companies. More particularly, the two-year restriction on senior public-sector officials providing their services to private companies after termination of office laid down in general law will be incorporated into the Banco de España’s Internal Rules and also apply to the Banco de España’s Secretary-General and Directors-General. The restriction is not unqualified but applies only to private companies which have had a direct connection to the office held. A direct connection between the company and the office held at the Banco de España is considered to exist where the Secretary-General, Directors-General, the governing bodies upon a proposal from the Directors- General or any officials responsible for bodies which report to the former by way of delegation or substitution have made decisions regarding such company. The restriction does not apply where

text: officials have returned to their former employers to engage in activities unrelated to their office at the Banco de España. During that two-year period, the former Secretary-General or Directors- General may not themselves, or through third parties or companies in which they have a direct or indirect stake above 10 %, enter into agreements to provide technical assistance or other services to the Banco de España, be it directly or through contracted or subcontracted companies. 1.3 The draft resolution also provides for the prohibition on providing services in institutions supervised by the Banco de España. The draft resolution maintains the current, absolute six-month prohibition on the Secretary-General and Directors-General providing their services to institutions subject to the Banco de España’s supervision. Moreover, the Banco de España’s Executive Commission will be allowed to extend that period up to a maximum of twelve months should it consider it necessary to prevent conflicts of interest. 1.4 As regards the regime adopted by the ECB, the provisions of the draft resolution are without prejudice to any rules and procedures adopted by the ECB and applicable to the Banco de España’s Secretary-General and Directors-General in the framework of the Eurosystem or the Single Supervisory Mechanism (SSM).

text: 2. General observations

text: 2.1 The ECB welcomes the fact that the draft resolution preserves the Banco de España’s autonomy in staff matters, which is an aspect of the principle of central bank independence enshrined in Article 130 of the Treaty and Article 7 of the Statute of the European System of Central Banks and of the European Central Bank. The draft resolution should contribute to ensuring the effectiveness and independence of the supervision tasks conducted by the Banco de España. 2.2 Similarly, as provided by

text: Article 31(3) of Council Regulation (EU) No 1024/2013

text: , the ECB is in the process of establishing comprehensive and formal procedures including ethics procedures and proportionate periods to assess in advance and prevent possible conflicts of interest arising where members of the Supervisory Board and ECB staff members who are engaged in supervisory activities are subsequently employed elsewhere within a period of two years after termination of office. 2.3 In order to avoid significant differences between the conflict of interest rules and restrictions after employment applicable to the members of the joint supervisory teams appointed by the ECB and those appointed by the Banco de España for the performance of the ECB’s supervisory tasks, it would be advisable for the Banco de España’s Internal Rules to refer to a possibility to review the

text: rules as appropriate, taking into account the ethical rules, including rules on post-employment, that may be developed in the context of the SSM. This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 20 March 2014. [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Regulation (EU) No 575/2013

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

text: Regulation (EU) No 648/2012

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

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

text: and repealing Directives

text: and

text: (OJ L 176, 27.6.2013, p. 338). 3 Decision ECB/2014/6 of 24 February 2014 on the organisation of preparatory measures for the collection of granular credit data by the European System of Central Banks, available at the ECB website (www.ecb.europa.eu); not yet published in the Official Journal.

title: Opinion of the European Central Bank of 27 March 2014 on the measurement of credit and country risk of bank groups (CON/2014/23)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 27 March 2014 on the measurement of credit and country risk of bank groups (

text: ) Introduction and legal basis

text: On 25 February 2014, the European Central Bank (ECB) received a request from the Oesterreichische Nationalbank (OeNB) for an opinion on a draft regulation on the detection of credit and country risk of groups of credit institutions and their foreign subsidiaries (hereinafter the ‘draft regulation’). 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, fourth and sixth indents of

text: , as the draft regulation relates to the OeNB, the collection of financial statistics and contains rules applicable to banks which materially influence the stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft regulation

text: 1.1 The purpose of the draft regulation is to detect credit and country risk of Austrian groups of credit institutions and their foreign subsidiary banks. It applies to superordinate credit institutions of Austrian groups of credit institutions within the meaning of Article 30(5) of the Law on banking. Such superordinate credit institutions will be required to submit reports on credit and country risk to the OeNB on a quarterly basis. Reports are to be submitted in accordance with the four annexes to the draft regulation: (1) consolidated risk statement on credit risk (Annex A1), (2) risk statement on the credit risk for foreign subsidiary banks (Annex A2), (3) consolidated risk statement on country risk (Annex B1) and (4) risk statement on the country risk of foreign subsidiary banks (Annex B2). The draft regulation will enter into force on 1 July 2014 and will apply, for the first time, to reports on 30 September 2014. 1.2

text: Article 44

text: b(1) of the Law on Oesterreichische Nationalbank (hereinafter the ‘Law on the OeNB’) requires the OeNB to monitor, in the public interest, all matters that may have an impact on safeguarding financial stability in Austria. In general, and based on a current reporting regulation of the Austrian Financial Market Authority (FMA) on assets, profits and risks of credit institutions, the FMA makes available the data necessary for the OeNB to fulfil this task. The FMA regulation

text: currently provides for the reports required under the draft regulation. Following implementation of the CRD IV package and the reporting implementing technical standards of the European Banking Authority, with effect from the third quarter of 2014, the FMA will no longer collect data on credit and country risk of groups of credit institutions. However, the OeNB needs this data in order to continue to carry out its tasks in connection with the maintenance of financial stability. Accordingly, the OeNB envisages issuing the draft regulation on the basis of

text: Article 44

text: b(2) of the Law on the OeNB in order to collect information on credit and country risk of groups of credit institutions and their foreign subsidiary banks.

text: 2. General observations

text: The ECB understands that the draft regulation implements statistical data collection powers at the disposal of the OeNB under the Law on the OeNB, to be applied in an area which is not presently harmonised through a Union legal act in the field of statistics. In this context, the ECB points to its Decision ECB/2014/6 , establishing measures aimed at gradual development of the ECB statistical framework in relation to the credit exposures of credit institutions, or other loan-providing financial institutions, vis-à-vis borrowers. Such prospective statistical framework will serve the purpose of, inter alia, supporting the activities of the European System of Central Bank in the area of financial stability. The ECB invites the Austrian authorities to monitor the development of this ECB statistical framework, which framework may interact with the objectives of the draft regulation.

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

text: Done at Frankfurt am Main, 27 March 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


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

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

text: See

text: Article 3(1)

text: (c) of the Treaty. 3 See Opinion

text: , paragraph 8 and Opinion

text: , paragraph 9. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.

text: See Opinion

text: , paragraph 14.

text: See Opinion

text: , paragraph 6.1.

title: Opinion of the European Central Bank of 2 April 2014 on crisis management (CON/2014/24)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 2 April 2014 on crisis management (

text: ) Introduction and legal basis

text: On 26 February 2014, the European Central Bank (ECB) received a request from the Office of the Lithuanian Government for an opinion on a draft law on crisis management (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and the third indent of

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

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

text: 1. Purpose of the draft law

text: 1.1 The draft law establishes a general legal framework for crisis management in Lithuania. In particular, the draft law (a) defines the aims and objectives of crisis prevention and management, (b) lists the entities involved in crisis management, their respective competence and arrangements for cooperation, and (c) provides for international cooperation with the Union and the North Atlantic Treaty Organisation in the field of crisis prevention and management. 1.2 The draft law defines ‘crisis’ very broadly as ‘any situation threatening the national security and caused by a national or international event or process, the prevention of potential, or elimination of actual effects of which necessitates recourse to crisis management measures’. It therefore covers situations which go beyond the competence of a single national institution and require coordinated action. According to the draft law, it is for the Lithuanian government to announce and revoke a state of crisis, and to decide which crisis management measures should be applied. 1.3 The draft law also designates Lietuvos bankas as one of the institutions responsible, ‘within its remit’, for the prevention and management of crises.

text: 2. General observations

text: 2.1 Under the Treaty, exclusive competence for monetary policy is conferred on the Union for Member States whose currency is the euro and such Member States may not adopt unilateral measures in this field. Therefore, in adopting the euro a Member State irreversibly transfers to the Union monetary policy and other powers enumerated in the Treaty and the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’) with regard to ESCB tasks. In these fields (i.e. setting reference rates, injecting or withdrawing liquidity in the market, ensuring efficient and sound clearing and payment systems, managing foreign reserves, issuing banknotes, contributing to the stability of the financial system), certain policy-making and legislative powers belong exclusively, under Articles 8 and 12 of the Statute of the ESCB, to the decision-making bodies of the ECB . 2.2 Article 347 of the Treaty, however, envisages that a Member State may be called upon to take action in the event of serious internal disturbances affecting the maintenance of law and order, war, serious international tension constituting a threat of war, or in order to carry out obligations it has accepted for the purpose of maintaining peace and international security. Accordingly, in the event of emergency conditions under

text: Article 347

text: , national authorities may be justified in exercising, on a temporary basis, powers that fall within the exclusive competence of the ESCB . 2.3 Since Lithuania is a Member State with a derogation pursuant to Article 139 of the Treaty, the above requirements will apply once Lithuania adopts the euro and Lietuvos bankas becomes a fully integrated member of the Eurosystem.

text: 3. Specific observations

text: 3.1 Article 10 of the draft law defines the duties of Lietuvos bankas in crisis situations, providing that, ‘within its remit’, Lietuvos bankas is to: (1) carry out analysis of risk factors in the financial sector as well as analysis of information on the potential or actual crisis; (2) submit proposals to the government on measures for crisis prevention and crisis management in the financial sector as well as on the announcement or revocation of a state of crisis in the financial sector; (3) apply measures for crisis prevention and crisis management in accordance with laws and other legal acts; and (4) perform other functions related to crisis prevention and crisis management in accordance with the draft law and other legal acts. The ECB understands the expression that Lietuvos bankas is acting ‘within its remit’ to imply that Lietuvos bankas will act within its competence under the Law on Lietuvos bankas, as well as under the Treaty and the Statute of the ESCB, and recommends clarifying the draft law accordingly.

text: 3.2 The ECB further understands that the list of tasks to be performed by Lietuvos bankas in crisis situations is not exhaustive and that Lietuvos bankas may be required to apply other measures and perform other functions, within its competence, which are laid down in other relevant legislation. Moreover, whilst Article 14 of the draft law lists potential crisis management measures without specifying any measure to be taken by Lietuvos bankas, it includes ‘any other measures necessary for the prevention of potential effects of the crisis or elimination of the effects thereof’. It is therefore not clear whether Article 14 of the draft law assigns any tasks to Lietuvos bankas, and the ECB recommends clarifying the draft law in this regard. 3.3 When implementing crisis prevention and management measures and performing functions under the draft law, any involvement of Lietuvos bankas should be fully compatible with its institutional and financial independence to safeguard the proper performance of its tasks under the Treaty and the Statute of the ESCB. The principle of central bank independence requires, inter alia, that Member States do not put their national central banks in a position where they have insufficient financial resources and inadequate net equity to carry out their tasks related to the ESCB or the Eurosystem .

text: Done at Frankfurt am Main, 2 April 2014.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI