text: case of conferral of new tasks upon NCBs . However, the ECB understands that the OeNB already provides financial education to the Austrian population, promotes a general understanding 24 of economic interrelationships, and organises a wide range of educational opportunities . Hence, the draft law only serves to clarify the OeNB’s role in connection with financial literacy, by explicitly providing that it will also contribute to the development of financial training in Austria, including by submitting to the MoF an annual report on fundamental findings on the status of financial education 25 in Austria . On that basis, the ECB considers that the draft law does not confer a new task on the OeNB in the context of providing financial education. 2.4.2 As previously noted by the ECB, financial education is not among central banking tasks listed in the 26 Treaties . Nevertheless, the tasks carried out by the OeNB in the area of financial education could be considered as complementary to the macroprudential- and financial market stability-related tasks that it currently performs. Furthermore, they do not appear to be atypical for NCBs of the 27 ESCB . However, ensuring the provision of general financial education forms part of the educational policies of the State. In this respect, these tasks will be administered, at least in part, on behalf of and in the interest of the government. 2.4.3 Regarding financial independence, the ECB reiterates that an NCB needs to have available to it sufficient financial resources to fulfil its mandate, i.e. to perform its ESCB-related tasks and its national tasks. The consulting authority must take into consideration that the OeNB should have sufficient resources available for the performance of its tasks. The ECB understands that the OeNB will be in a position to carry out these tasks without a negative impact on its core central banking tasks.

title: Opinion of the European Central Bank of 31 May 2019 on reform of the banking and financial market supervisory regime (CON/2019/21)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 31 May 2019 on reform of the banking and financial market supervisory regime (

text: ) Introduction and legal basis

text: On 15 April 2019 the European Central Bank (ECB) received a request from the Austrian Ministry of Finance (MoF) for an opinion on a draft law reforming the banking supervisory regime (hereinafter the ‘draft law’) . The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union (TFEU) and on the third, fourth and sixth indents of Article 2(1) of 2

text: Council Decision 98/415/EC

text: , as the draft law relates to the Oesterreichische Nationalbank (OeNB), the collection, compilation and distribution of monetary, financial and banking statistics, and the rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets, as well as the specific tasks conferred upon the ECB pursuant to Article 127(6) of the TFEU concerning policies relating to the prudential supervision of credit institutions. 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 proposes a reform of the structure of the banking and financial market supervisory regime in Austria. According to the explanatory memorandum, the draft law aims to make the national system of financial market supervision more efficient, accelerate and simplify decisionmaking processes, establish clear contacts for market participants and EU institutions, and increase the focus on service. It is intended to end the current split of competences between the Austrian Financial Market Authority (FMA) and the OeNB, and to concentrate the full extent of microprudential supervision in the FMA. The reform is proposed to take effect from 1 January 2020. The draft law does not purport to affect the OeNB’s current tasks in relation to macroprudential

text: Bundesgesetz, mit dem das Alternative Investmentfonds Manager-Gesetz, das Bankwesengesetz, das Betriebliche Mitarbeiter- und Selbständigenvorsorgegesetz, das Bundesgesetz zur Schaffung einer Abbaueinheit, das E- Geldgesetz 2010, das Einlagensicherungs- und Anlegerentschädigungsgesetz, das Finanzkonglomerategesetz, das Finanzmarktaufsichtsbehördengesetz, das Investmentfondsgesetz 2011, das Nationalbankgesetz 1984, das Sanierungs- und Abwicklungsgesetz, das Sparkassengesetz, STS-Verbriefungsvollzugsgesetz, das Versicherungsaufsichtsgesetz 2016, das Wertpapieraufsichtsgesetz 2018, das Zahlungsdienstegesetz 2018, das Zentrale Gegenparteien-Vollzugsgesetz sowie das Zentralverwahrer-Vollzugsgesetz geändert werden.

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). supervision, the oversight of financial market stability and payment systems, and the collection of statistics. 1.2 The draft law transfers the OeNB’s current competences in relation to microprudential banking supervision, in particular the conduct of on-site inspections and off-site analysis of individual banks, to the FMA. The same transfer of competences is envisaged with regard to the supervision of deposit guarantee schemes and the recovery and resolution of credit institutions. Furthermore, the task of providing expert opinions to the FMA, for example before granting a banking licence or approving a merger or demerger of credit institutions, is removed from the OeNB. Only the OeNB’s competence to implement supervisory reporting will remain unchanged. 1.3 As a consequence of concentrating prudential supervisory tasks in the FMA, the OeNB’s employees whose work relates to prudential banking supervision will, where possible, be transferred to the FMA. It is envisaged that employees of the OeNB recruited after 30 April 1998 will become employees of the FMA from 1 January 2020 and all of their existing rights and obligations will continue. OeNB internal staff rules applicable to such employees will continue to apply, while the right of the OeNB’s General Council to amend those rules will be transferred to the FMA’s Executive Board. Under Austrian labour law, employees may be transferred either by way of secondment or by assumption of their contracts by operation of law. Employees who joined the OeNB before 1 May 1998 are to be seconded to the FMA because assumption of their contracts would, according to the explanatory memorandum, represent a particular intrusion into the employment relationship. Although such seconded employees are to remain employees of the OeNB, they will be integrated into the FMA’s operational services. Pursuant to the draft law, the FMA will reimburse the OeNB for the payroll costs of seconded staff. 1.4 The explanatory memorandum accompanying the draft law states that the OeNB’s role regarding macroprudential supervision and financial market stability is to remain unchanged. The OeNB will remain competent to oversee financial market stability. It is intended that the OeNB will continue to monitor and analyse all circumstances that are relevant to financial market stability and inform the MoF and FMA thereof. In addition to this current competence, the OeNB shall in the future also focus on the development potential of the domestic financial market. The draft law provides for an increase in the number of OeNB’s representatives on the Financial Market Stability Board (FMSB) from one to two. Pursuant to the draft law, the OeNB will submit to each of the MoF, the FMA, the National Council of the Austrian Parliament, the FMSB and the new FMA Advisory Board an annual report on the fundamental findings of its monitoring of developments in the financial markets and the potential impact of those findings on the national financial market. The OeNB will set up an internal organisational unit for the monitoring of developments in the financial markets. The OeNB will, however, no longer have its current competence to carry out on-site inspections for macroeconomic reasons, and will only have the ability to instruct the FMA to conduct such on-site inspections for reasons of financial market stability, for macroeconomic reasons, or in a crisis situation. The OeNB must state the reasons for the inspection and specify its intended scope. The FMA may either comply with the inspection instruction, or refuse it and state the reasons for the refusal. The FMA may only refuse to conduct an audit if it would compromise the audits included in the FMA’s inspection programme or other FMA inspections, or if the data requested in the inspection instruction are already accessible to the OeNB or can immediately be made accessible. If the OeNB considers that there is an imminent risk, the FMA may not refuse the inspection instruction and must comply with it immediately . 1.5 The draft law requires the OeNB and the FMA to continue exchanging reporting data, statistical information and all other data and information necessary to accomplish their respective tasks in a suitable and efficient manner. For this purpose the FMA and the OeNB are required to conclude a bilateral memorandum of understanding which must be published and set out details of their collaboration and the information flow between them. Further memoranda of understanding will regulate the conduct of on-site inspections by the FMA if instructed by the OeNB, as well as the transfer of employees from the OeNB to the FMA and vice versa. More extensive information obligations are to be established in times of crisis in order to ensure effective collaboration. 1.6 The draft law provides for a number of changes to the FMA’s governance structure. Among other things, the FMA will establish a Financial Market Advisory Board, whose role will be to advise the FMA on financial market matters, monitor and analyse international trends on the financial markets, and propose supervisory priorities. The Financial Market Advisory Board will have powers to adopt and publish opinions and recommendations. Its members will be appointed by the MoF for a fiveyear term and will perform their duties in an honorary capacity. Members will be nominated by various ministries, the Austrian Chamber of Commerce, the Vienna Stock Exchange, the OeNB and the Oesterreichische Kontrollbank. The business of the Financial Market Advisory Board will be administered by the FMA, and its rules of procedure will be established by the MoF. 1.7 The draft law proposes an increase in the amount of profits to be distributed by the OeNB to its sole shareholder, the Austrian Federation, from 90 to 95 per cent. The explanatory memorandum explains that the increase is due to the transfer of competence for on-site inspections and microprudential analysis to the FMA. Currently, the OeNB’s costs of carrying out prudential supervisory tasks are partly refunded to it by the FMA, up to a statutory maximum annually of EUR 11 million, and the balance is borne by the OeNB (in 2018, for example, the balance amounted to EUR 42.6 million). The impact assessment of the draft law calculates that from 2020 annual costs previously incurred by the OeNB in carrying out prudential supervisory tasks in the amount of EUR 39.6 million will no longer be incurred once the competences are transferred – taking into account synergy effects and increased savings potential. Accordingly, the MoF concludes that these cost savings would become available for annual distribution to the Austrian Federation, in addition to the share of the profit that is currently distributed. According to the impact assessment, the MoF expects an increase in profit distribution of EUR 38.5 million per year from 2020 until 2023. 1.8 As the Austrian authorities do not intend to increase the supervisory fees to be paid by supervised entities, the increased costs incurred by the FMA due to the transfer of prudential supervisory tasks from the OeNB to the FMA will need to be funded by the Austrian Federation. According to the MoF’s calculations, these costs will amount to EUR 33 million annually. Moreover, due to an

text: 3 See the proposed amendment to Section 70 paragraph 1c of the Law on banking (Bankwesengesetz), contained in the draft law. extended regulatory role of the FMA, it is expected that the annual costs of the MoF itself will increase by EUR 4.5 million. 1.9 The draft law clarifies the significant contribution of the OeNB to financial education and literacy. In particular, it provides that the OeNB will send the MoF an annual report on fundamental findings on the status of financial education in Austria. 1.10 Lastly, the explanatory memorandum to the draft law envisages a stronger separation between regulation and supervision than currently exists, thereby strengthening the role of the MoF in the field of regulation. For this purpose, three new departments with 30 new staff will be established in the division of the MoF that deals with financial markets.

text: 2. Observations

text: 2.1 Distribution of the OeNB’s profits 2.1.1 In order to ensure financial independence, the national central banks (NCBs) must always have sufficient resources to carry out their tasks related to the European System of Central Banks (ESCB), as well as their national tasks . Member States may not put their NCBs in a position where 5 they have insufficient financial resources and inadequate net equity to carry out their tasks . An NCB’s overall independence would be jeopardised if it could not autonomously avail itself of sufficient financial resources to fulfil its mandate. 2.1.2 In accordance with the current national law, certain amounts must be deducted from the OeNB’s operating profit prior to profit appropriation: namely, earnings from assets in which the pension reserve has been invested; interest credited to the temporary reserve account for loans extended by the OeNB under the European Recovery Programme; and earnings from assets in which the Fund for the Promotion of Scientific Research and Teaching set up by the OeNB has invested. Furthermore, before making any profit appropriation, up to 10 per cent of the annual profit that remains after deducting the amounts referred to above must be transferred, if necessary, to the OeNB’s pension reserve until it reaches the level at which it is adequately funded – according to actuarial calculations – in order to meet the current pension claims of the beneficiaries. If, however, the pension reserve is significantly overfunded, the excess must be released and accounted for in the profit and loss account. After accounting for the deductions from the operating profit as referred to above, the OeNB is obliged under the current national law to distribute 90 per cent of the balance of the profit to the Austrian Federation. Further, after such distribution, a dividend of up to 10 per cent of the share capital of the Austrian Federation in the OeNB must be paid out to the Austrian Federation, by decision of a general meeting of the OeNB. The profit then remaining (the ‘remaining profit’) is required to be appropriated in accordance with a decision of a general meeting of the OeNB. The ECB understands that the draft law provides for an increase, from 90 to 95 per cent, of the proportion of the OeNB’s profit – after the deductions from operating profit as referred

text: 4 See, e.g., paragraph 3.5 of Opinion

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

text: 5 See, e.g., paragraph 3.1.1 of Opinion

text: (with specific reference to Austria). to above, and before payment of the dividend – that is to be distributed in future to the Austrian Federation. 6 2.1.3 An NCB’s statute may prescribe how its profits are to be allocated . Profits may be distributed to 7 the State budget only after any accumulated losses from previous years have been covered and after financial provisions deemed necessary to safeguard the real value of the NCB’s capital and 8. assets have been created Member States may not hamper NCBs in building up their reserve 9 capital to a level which is necessary for a member of the ESCB to fulfil its tasks . The ECB stresses the importance of the OeNB’s ability to independently create and adequately build up reserves and 10 provisions. Under Austrian law , the OeNB is obliged to prepare its balance sheet and its profit and loss account in conformity with the rules established by the Governing Council of the ECB under Article 26.4 of the Statute of the ESCB and of the ECB. Consequently, the OeNB has 11 adopted the ESCB’s accounting rules and applies them in their entirety to its financial statements. However, the remaining profit is the only means by which the OeNB can increase its reserve serving as a general risk provision. Hence the proposed increase of the proportion of the OeNB’s profit to be distributed to the Austrian Federation limits the OeNB’s ability to adequately build up this reserve. 2.1.4 In any event, any amendment to the profit distribution rules of an NCB should only be initiated and decided in close cooperation with that NCB, since the NCB is in the best position to assess its 12 required level of reserve capital . With a view to ensuring financial independence, the ECB requests that a decision by the consulting authority on the intended amendment to the profit distribution rules of the OeNB be taken only in cooperation with the OeNB. 2.1.5 Furthermore, the ECB understands that the increased profit distribution to be made by the OeNB is intended to compensate the Austrian Federation for the increased supervisory costs that the latter will incur, both within the MoF and at the FMA. However, as 90 per cent of the remaining profits are already distributed to the Austrian Federation under the current regime, the cost savings envisaged at the level of the OeNB would, in any event, lead to an increase in profit and in the corporate income tax charge. Thus, the proposed increase in the profit distribution percentage would not be necessary to achieve an increased profit distribution by the OeNB. 2.2 The OeNB’s role regarding financial market stability and macroprudential supervision 2.2.1 Consistently with Article 127(5) of the TFEU, the ECB has repeatedly noted the important role of

text: 6 See ECB Convergence Report 2018, p. 27. 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 (see, e.g., paragraph 2.3 of Opinion

text: 7 See paragraph 4.3 of Opinion CON 2009/85 and paragraph 3.2.5 of Opinion

text: 8 See ECB Convergence Report 2018, p. 27.

text: 9 See paragraph 3.3 of Opinion

text: and paragraph 2.1 of Opinion

text: 10 See section 67 paragraph 2 of the Law on the National Bank.

text: 11 Guideline

text: (EU) 2016/2249

text: of the European Central Bank of 3 November 2016 on the legal framework for accounting and financial reporting in the European System of Central Banks (ECB/2016/34) (OJ L 347, 20.12.2016).

text: 12 See ECB Convergence Report 2018, p. 27, paragraph 3.3 of Opinion

text: and paragraph 3.6. of Opinion

text: . NCBs in prudential supervision to allow the Eurosystem to contribute adequately to monitoring the 13 risks to financial stability in the euro area . At the same time, the draft law does not seek to affect the OeNB’s existing role regarding macroprudential supervision, the oversight of financial market stability and payment systems, supervisory reporting, and the collection of statistics. While the draft law withdraws the OeNB’s current competence to carry out on-site inspections, it authorises the OeNB to instruct the FMA to conduct on-site inspections for reasons of financial market stability, or macroeconomic reasons, or in a crisis situation, and the FMA must comply with the OeNB’s inspection instruction immediately if the OeNB considers that there is an imminent risk. It is for the Austrian authorities to assess whether the withdrawal of the OeNB’s current competence for carrying out on-site inspections for macroeconomic reasons complies with Austrian constitutional principles. Underlining the OeNB’s role regarding oversight of financial market stability, the draft law increases the number of the OeNB’s representatives in the FMSB from one to two. In addition, the OeNB is to nominate two of the six members of the FMA’s Supervisory Board and one member of the FMA’s Financial Market Advisory Board. All of these mechanisms should help to ensure that the transfer of prudential supervisory tasks from the OeNB to the FMA does not jeopardise the OeNB’s ability to safeguard financial stability and prevent or mitigate systemic risks. In order to safeguard the OeNB’s remaining tasks and functions, in particular macroprudential supervision and oversight of financial market stability, the ECB additionally recommends that the OeNB is provided 14 with access to all relevant information necessary for its ongoing tasks . 2.3 The FMA’s tasks within the Single Supervisory Mechanism 2.3.1 Pursuant to Article 127(6) of the TFEU and Articles

text: and

text: of Council Regulation (EU) No 1024/2013 , the ECB is responsible for the effective and consistent functioning of the SSM, and the ECB and the NCAs are each subject to a duty of cooperation, and an obligation to exchange information. Where appropriate, and without prejudice to the responsibility and accountability of the ECB for the tasks conferred on it by

text: Regulation (EU) No 1024/2013

text: , the NCAs are responsible for providing assistance to the ECB, on the terms set out in

text: Regulation (EU) No 468/2014

text: of the 16 European Central Bank (ECB/2014/17) , with the preparation and implementation of any acts relating to the tasks conferred on the ECB under

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

text: related to all credit institutions, including assistance in verification activities .

text: 13 See paragraph 2 of Opinion

text: 14 See paragraphs II.b) to e) of the OeNB’s opinion on the draft law, dated 7 May 2019, which is published on the Austrian Parliament’s website at www.parlament.gv.at..

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

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

text: Regulation (EU) No 468/2014

text: of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation) (OJ L 141, 14.5.2014, p. 1).

text: 17 See paragraph 2.2 of Opinion

text: and paragraph 2.4 of Opinion

text: 18 Without prejudice to certain provisions of

text: Regulation (EU) No 1024/2013

text: , NCAs shall carry out and be responsible for certain tasks and adopting all relevant supervisory decisions with regard to certain less significant credit institutions or financial holding companies. Wherever the ECB is assisted by NCAs for the purpose of exercising the tasks conferred on it by

text: Regulation (EU) No 1024/2013

text: , the ECB and the NCAs shall comply with the provisions set out in the relevant Union acts in relation to the allocation of responsibilities and cooperation between competent authorities from different Member States. 2.3.2 Taking into account the responsibilities of the FMA within the framework of the SSM, the ECB 19 notes that

text: Article 4(4) of Directive 2013/36/EU

text: of the European Parliament and of the Council requires Member States to ensure that the competent authorities have the expertise, resources, operational capacity, powers and independence necessary to carry out the functions relating to prudential supervision, investigations and penalties set out in that Directive and in Regulation (EU) 20 No 575/2013 of the European Parliament and of the Council . According to the recommendation of Basel Core Principles for Effective Banking Supervision the supervisor is to have adequate 21 resources for the conduct of effective supervision and oversight . 2.3.3 The ECB recommends that the Austrian authorities clarify in the draft law that the Financial Market Advisory Board, which includes industry representatives and representatives of supervised entities in matters of banking supervision, will not obtain any confidential information, and that any such information shared in the SSM will not be provided to the Financial Market Advisory Board. Regarding the operational independence of the FMA, the ECB highlights

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

text: , which provides that the members of the ECB’s Supervisory Board must act independently and objectively in the interest of the Union as a whole and must neither seek nor take instructions from the institutions or bodies of the Union, from any government of a Member State or from any other public or private body. 2.3.4 Furthermore, the OeNB’s Governor, acting in his or her personal capacity, participates in decisions adopted by the ECB’s Governing Council on supervisory matters relating to the SSM, mainly based on complete draft decisions proposed by the ECB’s Supervisory Board pursuant to the nonobjection procedure specified under

text: Article 26(8) of Council Regulation (EU) No 1024/2013

text: . As for all his or her tasks, concerning SSM matters, the Governor needs to have the necessary resources as well as access to relevant information and data. In this respect, attention should be paid to the OeNB’s ability to employ and retain qualified staff necessary in view of its autonomy in staff matters 22 deriving from its financial independence . 2.4 The OeNB’s role regarding financial education 2.4.1 Regarding the prohibition on monetary financing under Article 123 of the TFEU, as supplemented by

text: Council Regulation (EC) No 3603/93

text: , the ECB notes that, inter alia, any financing by a central bank of the public sector’s obligations vis-à-vis third parties is prohibited. Accordingly, national legislation may not require an NCB to finance either the performance of functions by other public sector bodies, or the public sector’s obligations vis-à-vis third parties. This prohibition applies in the

text: 19 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: 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: 21 According to the Basel Core Principles for Effective Banking Supervision, the head of a supervisory authority is also to be appointed for a minimum term and removed from office during that term only for reasons specified in law, or if not physically or mentally capable of carrying out the role, or if found guilty of misconduct. See Basel Committee on Banking Supervision, Core Principles for Effective Banking Supervision (September 2012), Principle 2, Effective Criteria 2 and 6, available on the website of the Bank for International Settlements at www.bis.org.

text: 22 See ECB Convergence Report May 2018, p. 28. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 31 May 2019. [signed] The President of the ECB Mario DRAGHI

text: 23 See ECB Convergence Report 2018, p. 30.

text: 24 For example, the OeNB provides tailor-made offers regarding financial education on its financial education online platform. According to its website, the OeNB is constantly striving to expand and improve these opportunities.

text: 25 See the proposed amendment to section 44b paragraph 5 of the Law on the National Bank (Nationalbankgesetz), as included in the draft law.

text: 26 See paragraph 3.4 of Opinion

text: and paragraph 4.2 of Opinion

text: 27 See paragraph 3.2 of Opinion


text: Grozījumi Finanšu un kapitāla tirgus likumā.

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: Available on the Organization for Economic Co-operation and Development website at www.oecd.com.

text: Available on the Financial Action Task Force’s website at www.fatf-gafi.org.

text: Finanšu un kapitāla tirgus komisijas likums, available at www.likumi.lv.

text: Likums “Par valsts noslēpumu”, available at www.likumi.lv.

text: Noziedzīgi iegūtu līdzekļu legalizācijas un terorisma finansēšanas novēršanas likums, available at www.likumi.lv. 9 Starptautisko un Latvijas Republikas nacionālo sankciju likums, available at www.likumi.lv. 10

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). 11

text: Regulation (EU) No 468/2014

text: of the European Central Bank of 16 April 2014 establishing the framework for cooperation within the Single Supervisory Mechanism between the European Central Bank and national competent authorities and with national designated authorities (SSM Framework Regulation) (OJ L 141, 14.5.2014, p. 1). 13 Without prejudice to certain provisions of

text: Regulation (EU) No 1024/2013

text: , NCAs shall carry out and be responsible for certain tasks and adopting all relevant supervisory decisions with regard to less significant credit institutions or financial holding companies. Wherever the ECB is assisted by NCAs for the purposes of exercising the tasks conferred on it by

text: Regulation (EU) No 1024/2013

text: , the ECB and the NCAs shall comply with the provisions set out in the relevant Union acts in relation to the allocation of responsibilities and cooperation between competent authorities from different Member States.

text: According to the Basel Core Principles for Effective Banking Supervision, the head of a supervisory authority is also to be appointed for a minimum term and removed from office during that term only for reasons specified in law, or if not physically or mentally capable of carrying out the role, or if found guilty of misconduct. See Basel Committee on Banking Supervision, Core Principles for Effective Banking Supervision (September 2012), Principle 2, Effective Criteria 2 and 6, available on the website of the Bank for International Settlements at www.bis.org. 15

text: conferring specific tasks on the European Central Bank 16 See also

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

text: pursuant to which the ECB and NCAs are subject to a duty of cooperation in good faith, and an obligation to exchange information. 18 See Articles 45(1), 46, 47 and 56 of the Law on Prevention of Money Laundering and Terrorism Financing.

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 12 June 2019 on the objectives and governance of the Latvian Financial and Capital Markets Commission (CON/2019/22)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 12 June 2019 on the objectives and governance of the Latvian Financial and Capital Markets Commission (

text: ) Introduction and legal basis

type: rubrik

text: On 28 May 2019 the European Central Bank (ECB) received a request from the Latvian Minister for Finance for an opinion on a draft law amending Law on the Financial and Capital Markets Commission (hereinafter the ‘draft law’) . The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and on the third indent of

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

text: , as the draft law relates to the Latvijas Banka and to the specific tasks conferred upon the ECB concerning the prudential supervision of credit institutions pursuant to Article 127(6) of the Treaty. In accordance with 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 According to its annotation, the draft law has two aims. First, it changes the procedure for the appointment of the members of the Finanšu un kapitāla tirgus komisija (FCMC, Financial and Capital Markets Commission) Council by expanding the qualification requirements, stating the maximum terms of office and prohibiting office holders from holding office for more than two consecutive terms. Second, it strengthens the provisions on the prevention of money laundering and financing of proliferation and terrorism in the financial and capital markets by expanding the objectives and more precisely setting out the FCMC Council’s functions. According to the annotation, these aims are in line with the Organisation for Economic Co-operation and Development’s short-term recommendations issued for Latvia to reinforce the supervisory and control mechanism for the prevention of financial system abuse. The aims also reflect the findings of the July 2018 MONEYVAL mutual evaluation report on anti-money laundering and counterterrorist financing measures in Latvia. 1.2 The draft law changes Latvijas Banka’s role in the appointment of the Chair and the members of the FCMC Council. The current Law on the Financial and Capital Markets Commission (hereinafter ‘Law on FCMC’) provides that the Chair and Deputy Chair of the FCMC Council are appointed by

text: the Parliament upon a joint recommendation of the Governor of Latvijas Banka and the Minister for Finance, and that the other FCMC Council members are appointed by the Chair after coordination with the Governor of Latvijas Banka and the Minister for Finance. The draft law provides for the Chair and all members of the FCMC Council to be appointed by the Parliament upon a recommendation of Ministru kabinets (Cabinet of Ministers). The candidates for the positions of Chair and FCMC Council members are to be selected in an open competition and evaluated by a commission, which, inter alia, includes a member of Latvijas Banka’s Council. 1.3 The draft law amends the qualification criteria for candidates for the positions of Chair and FCMC Council members. In particular, candidates for these positions are required to have all of the following: (a) a university degree in law, economics or financial management; (b) knowledge of the Latvian language and one foreign language; (c) at least five years’ experience in financial and capital markets or the supervision/prevention of money laundering and financing of terrorism and proliferation; (d) compliance with requirements to receive a second category special permit for access to official secrets. The Law on official secrets has a provision requiring anyone with access to secret information to obtain the second category special permit . This permit will not be granted to any person where, during the course of the examination, it is determined that there are doubts that this person is not able to and cannot be relied upon to preserve official secrets. 1.4 The draft law amends existing provisions relating to removing the Chair and FCMC Council members from office. The existing law sets out four reasons for Parliament to remove these officials from office: (a) upon the office holder’s own application; (b) where there is a final judgement convicting the office holder of an intentional criminal offence; (c) where the office holder is unable to perform his or her duties for more than six consecutive months due to illness or other reasons; and (d) upon a joint application by the Governor of Latvijas Banka and the Minister for Finance. 1.5 The draft law abolishes the fourth ground for removal and introduces three new grounds for removal: (d) where there has been a final decision that annuls a special permission of access to State secrets or downgrades the relevant category in respect of the office holder; (e) where the Chair of the FCMC Council applies for the removal of an FCMC Council member who no longer complies with the criterion of having an impeccable reputation; and (f) where there is an application by at least 34 out of the 100 members of Parliament for the removal from office of the Chair of the FCMC where he or she no longer complies with the criterion of having an impeccable reputation. The draft law also specifies that all six grounds apply not only in relation to the Chair and Deputy Chair of the FCMC, but in relation to any FCMC Council member. If a person is to be relieved from office under grounds (e) or (f), the circumstances of the case will be evaluated by the commission referred to in paragraph 1.3, which, inter alia, includes a member of Latvijas Banka’s Council. The decision of this commission may be appealed to the administrative courts. In the absence of an appeal to an administrative court, or if an administrative court has ruled in favour of the commission’s decision, the final decision on the removal from office on grounds (e) or (f) is drafted by Ministru kabinets and adopted by the Parliament. The decision of the Parliament is final and may not be appealed. 1.6 The draft law contains amendments relating to the composition and term of office of FCMC Council

text: members. In particular, the FCMC Council will consist of three members instead of five members, as provided in the current Law on FCMC. The term of office of the Chair and FCMC Council members will be five years, rather than six years as provided in the current Law on FCMC, and a person may not serve more than two consecutive terms. In contrast to the current provisions, FCMC Council members may not simultaneously be FCMC Council members and hold positions as Directors of FCMC departments. 1.7 The draft law amends the objectives, functions and responsibilities of the FCMC regarding the prevention of money laundering, the financing of terrorism and proliferation, and compliance with sanctions. The current objectives of the FCMC are to foster the protection of investors, depositors and insured persons and to foster the development and stability of the financial and capital markets. The draft law will add an objective on the prevention of money laundering and financing of proliferation and terrorism. The current functions of the FCMC include the regulation of financial and capital markets and controlling the compliance of activities of their participants with laws, FCMC regulations and decisions. The draft law will add to these functions by requiring participants in the financial and capital markets to comply with Law on the Prevention of Money Laundering and 8 9 Counter Terrorism Financing and Law on International and National Sanctions in relation to financial restrictions.

text: 2. Observations

text: 2.1 The ECB takes note of the changed role of Latvijas Banka in the appointment and removal from office of the Chair and FCMC Council members. 2.2 Pursuant to Article 127(6) of the Treaty and Articles

text: and

text: of Council Regulation (EU) No 1024/2013 , the ECB is responsible for the effective and consistent functioning of the Single Supervisory Mechanism, and the ECB and the national competent authorities (NCAs), including the FCMC, are each subject to a duty of cooperation and an obligation to exchange information. Where appropriate, and without prejudice to the responsibility and accountability of the ECB for the tasks conferred on it by

text: Regulation (EU) No 1024/2013

text: , the NCAs, including the FCMC, are responsible for providing assistance to the ECB, on the terms set out in

text: Regulation (EU) No 468/2014

text: of the European Central Bank (ECB/2014/17) , with the preparation and implementation of any acts relating to the tasks conferred on the ECB under

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

text: related 12 13 14 to credit institutions , including assistance in verification activities . The ECB understands that

text: the FCMC’s responsibilities in these respects will not be affected by the changes in the FCMC’s governance under the draft law. 2.3 As noted in recitals

text: and

text: of

text: Regulation (EU) No 1024/2013

text: , the supervisory tasks not conferred on the ECB, which remain with the national authorities, include the prevention of the use of the financial system for the purposes of money laundering (ML) and terrorist financing (TF). The ECB should cooperate as appropriate, fully with the national authorities, which are responsible for supervising the measures to combat money laundering . While the task of supervising credit institutions in relation to the prevention of the use of the financial system for the purposes of ML or TF has not been conferred on the ECB, the outcomes of anti-money laundering and countering the financing of terrorism (AML/CFT) supervision are important to consider for the discharge of the ECB’s tasks concerning the prudential supervision of credit institutions under Article 127(6) of the Treaty and

text: Regulation (EU) No 1024/2013

text: . In particular, the risk of the use of the financial system for ML or TF is relevant for ECB prudential supervisory decisions concerning acquisitions of qualifying holdings in supervised entities (including regarding the process of granting authorisations to credit institutions) and fit and proper assessments of existing or prospective managers of supervised entities, as well as for day-to-day supervision in the context of the supervisory review and evaluation process. Serious breaches of AML/CFT requirements can negatively affect the reputation of a credit institution and lead to significant administrative or criminal sanctions imposed on supervised entities or their staff, and can thus pose a risk for the viability of supervised entities. In certain cases, serious breaches of AML/CFT requirements can directly trigger a need for a credit institution’s authorisation to be withdrawn . 2.4 Taking account of the foregoing, the ECB notes that the objectives of the FCMC are to be expanded and its functions are to be set out more precisely with the intention of strengthening its existing mandate to conduct AML/CFT supervision .

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

text: Done at Frankfurt am Main, 12 June 2019.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI

type: vagledning

utgivare: ecb


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

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

text: This nominal price is set by Article 20 of the Royal Decree 375/1936 as converted into law by Law 141/1938.

text: Article 2 of the draft law repeals Articles 4, 5 and 6 of the Law Decree 133/2013 as converted into law with modifications by Law 5/2014 (hereinafter the “Law Decree 133/2013”).

text: As referred to in Article 27 of Legislative Decree 153/1999.

text: As established in accordance with the provisions of Article 4.1 of Legislative Decree 252/2005.

text: Adapting the Statute of the Banca d’Italia to Law Decree 133/2013.

text: See Article 19.10 of Law 262/2005.

text: See Law Decree 133/2013.

text: See Article 4.2 of the Italian Presidential Decree 31 March 1988 no.148 concerning the management of reserves, introduced by article 7 of Legislative Decree 43/1998.

text: See Opinions

text: and

text: . All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 12 See Law 262/2005. 13 See Article 19.10 of Law 262/2005, mentioned in paragraph 1.3 above. 14 See Law Decree 133/2013. 15 See paragraph 6 of Opinion

text: See ECB Convergence Report (May 2018), p. 21. 17 See paragraph 9 of Opinion

text: . 18 Article 2 of the draft law on Banca d’Italia’s ownership structure. 19 See Articles 6.2 and 19.2 of the Statute of the Banca d’Italia. 20 See Article 5.1 of Legislative Decree of the Temporary Head of Italian State 691/1947, which was repealed by Law Decree 133/2013. 21 See Article 22 of the Statute of the Banca d’Italia. 22 See paragraph 2.3 of Opinion

text: See Article 114 of Royal Decree 204/1910. 24 See Article 19 of Law 262/2005 and Article 2 of Legislative Decree 43/1998. 25 The role of the Banca d’Italia as national supervisory authority in the SSM is also presupposed by the relevant provisions of the Italian Banking Law, the Legislative Decree 1 September 1993, n. 385 (see

text: Articles 6

text: , paragraph 3, and 6-bis).

text: Article 3(3) of the Statute of the Banca d’Italia, reflecting Article 4.4 of Law Decree 133/2013. 27 Article 3(4) of the Statute of the Banca d’Italia, reflecting Article 4.5 of Law Decree 133/2013. 28 Article 3(6) of the Statute of the Banca d’Italia, reflecting Article 4.6 of Law Decree 133/2013. 29 See paragraph 10 of Opinion

text: . 30 Article 3(1) of the Statute of the Banca d’Italia.

text: See

text: Council Regulation (EC) No 2866/98 of 31 December 1998

text: on the conversion rates between the euro and the currencies of the Member States adopting the euro (OJ L 359, 31.12.1998, p.1). 32 See, e.g., paragraph 3.2.2 of Opinion

text: Article 30

text: requires all NCBs, including the Banca d’Italia, to transfer a defined amount of foreign reserves, including gold, to the ECB, in proportion to their share in the capital of the ECB. For the purpose of regulating the transfer of foreign reserve assets by NCBs to the ECB pursuant to Article 30 of the Statute of the ESCB, the ECB adopted Guideline ECB/2000/15, which included gold among the foreign reserves which had to be transferred by the NCBs, including the Banca d’Italia, to the ECB upon the start of Stage 3 of the European Monetary Union (EMU) and subsequently upon joining the euro. The ECB may effect further calls of foreign reserve assets, including gold, from the NCBs, including the Banca d’Italia, in case of need for such foreign reserve assets. See Guideline of the European Central Bank of 3 November 1998 as amended by the Guideline of 16 November 2000 on the composition, valuation and modalities for the initial transfer of foreign-reserve assets, and the denomination and remuneration of equivalent claims (ECB/2000/15) (OJ L 336, 30.12.2000, p. 114); Article 30.4 of the Statute of the ESCB; and Articles

text: and

text: of Council Regulation (EC) No 1010/2000 of 8 May 2000 concerning further calls of foreign reserve assets by the European Central Bank (OJ L 283, 31.10.2003, p. 81).

title: Opinion of the European Central Bank of 24 June 2019 on the ownership structure of Banca d’Italia and the ownership of gold reserves (CON/2019/23)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 24 June 2019 on the ownership structure of Banca d’Italia and the ownership of gold reserves (

text: ) Introduction and legal basis

text: On 2 May 2019 the European Central Bank (ECB) received a request from the President of the lower chamber of the Italian Parliament (Camera dei Deputati) for an opinion on a draft law on the transfer of the ownership of the Banca d’Italia to the Ministry for Economy and Finance (hereinafter the ‘draft law on Banca d’Italia’s ownership structure’). By the same letter the President of the lower chamber transmitted another draft law concerning an authentic interpretation of Article 4 of the Italian Consolidated law on foreign exchange on the management of official reserves (hereinafter the ‘draft law on the ownership of gold reserves’, together with the ‘draft law on Banca d’Italia’s ownership structure’, the ‘draft laws’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union (TFEU) and the third indent of

text: , as the draft laws relate to Banca d’Italia’s governance and the basic task to be carried out through the European System of Central Banks (ESCB) to hold and manage the official foreign reserves of the Member States pursuant to the third indent of Article 127(2) of the Treaty. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft laws

text: 1.1 The draft law on Banca d’Italia’s ownership structure provides that the capital shares of Banca d’Italia currently held by private sector entities shall be purchased by the Ministry of Economy and Finance at a nominal value of 1000 lire as set by specified provisions of Italian law dating from the 1930s . The draft law further provides that, after such transfer, the Ministry of Economy and Finance may transfer its shareholding, or part of it, only to public sector entities. A governmental delegated regulation to be enacted within three months from the entry into force of the draft law will regulate the procedures for transferring the shares. 1.2 The draft law on Banca d’Italia’s ownership structure repeals certain existing provisions of Italian

text: legislation concerning the ownership and governance of Banca d’Italia . In particular, the draft law repeals, inter alia, articles providing that: (1) the Banca d’Italia, a public-law institution, is the central bank of the Italian Republic, is an integral part of the ESCB and is the competent national authority in the single supervisory mechanism (SSM) referred to in

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

text: ; (2) the Banca d’Italia is independent in the exercise of its powers and in the management of its finances; (3) the Banca d’Italia is authorised to increase its capital through the use of statutory reserves to the sum of €7.500.000.000; (4) Banca d’Italia shareholders may receive annual dividends up to an amount not exceeding 6% of the capital; (5) shares in the capital of Banca d’Italia may only be held by banks, insurance and reinsurance companies with registered and head offices in Italy, foundations , social security and insurance bodies with registered offices in Italy, and pension funds ; (6) each shareholder in Banca d’Italia may not own, directly or indirectly, a share of the capital exceeding 3%, and voting rights may not be exercised with respect to excess shares, and the relevant dividends are allocated to reserves of the Banca d’Italia; (7) the Banca d’Italia may temporarily acquire its own shares under certain conditions; (8) the Banca d’Italia may dematerialise the shareholdings in its own capital; (9) the Banca d’Italia shareholders’ meeting and board of directors shall not interfere in matters pertaining to the exercise of the public functions entrusted by the Treaty, the Statute of the ESCB and of the ECB, by European law and by law to the Banca d’Italia or to the Governor for the pursuit of the Banca d’Italia’s institutional purposes; (10) the Banca d’Italia board of directors is composed of the Governor and 13 directors appointed by local shareholders’ general meetings in the manner prescribed by the Statute of Banca d’Italia among candidates designated by a specific internal committee within the board of directors; and (11) the Minister of Economy and Finance does not have the power (formerly provided for under a law dating from 1910) to suspend and annul the resolutions of the Banca d’Italia board of directors when the Minister deems such resolutions to be contrary to laws, regulations and statutes. The draft law also repeals a number of technical legal provisions ensuring the consistency of the legal framework governing the Banca d’Italia and establishing a specific timeframe for the adaptation of the Statute of the Banca d’Italia to relevant provisions of Italian law. 1.3 The explanatory note prepared by the proponents of the draft law on Banca d’Italia’s ownership structure states that the draft law is designed to transfer the capital of the Banca d’Italia to exclusive public ownership, also by restoring previous provisions of Italian law that were never implemented and were subsequently repealed . The explanatory note states that the Banca d’Italia should be a publicly owned company par excellence, given that the activities of regulation,

text: supervision and monetary policy require the central bank to have maximum independence in relation to regulated entities. 1.4 The draft law on the ownership of gold reserves provides an authentic interpretation of Article 4.2 of the Italian Presidential Decree 31 March 1988 no.148 concerning the management of reserves, which provides that Banca d’Italia manages the official reserves within the framework established by Article 31 of the Statute of the ESCB . In particular, the draft law provides that this article shall be construed as meaning that the Banca d’Italia manages the official gold reserves exclusively as a depositary, without prejudice to the property of such gold reserves of the Italian State, including reserves held abroad. 1.5 The explanatory note prepared by the proponents of the draft law on the ownership of gold reserves notes that Article 127(2) of the Treaty establishes that the tasks to be carried out through the ESCB include holding and managing the official foreign reserves of the Member States, and that Article 31 of the Statute of the ESCB refers to the foreign reserve assets remaining with the national central banks (NCBs) after the transfers to the ECB. The explanatory note states that, without prejudice to compliance with international obligations deriving from the Treaties, spelling out explicitly that the ownership of the gold reserves remains with the Italian State seems necessary in light of the hybrid nature acquired by Banca d’Italia over time due to several legislative interventions. The reference to the hybrid nature of Banca d’Italia seems to refer to the Banca d’Italia’s nature as a public law institution predominantly owned by private sector entities.

text: 2. Observations regarding the draft law on Banca d’Italia’s ownership structure

text: 2.1 The ECB recalls that it has issued two opinions on a similar Italian draft legislative proposal which 12 13 was subsequently enacted into law in 2005 , but which never entered into operation and was subsequently repealed .

text: Central bank independence

text: 2.2 The Treaty is silent on the ownership structure of NCBs in the ESCB, which is therefore left to each Member State’s autonomous determination, insofar as this structure fully respects, and poses no risks to, the principle of central bank independence established in Article 130 of the Treaty and the other Treaty provisions governing the ESCB or Eurosystem-related tasks . 2.3 The principle of institutional independence referred to in Article 130 of the Treaty and Article 7 of the Statute of the ESCB and of the ECB (the ‘Statute of the ESCB’) prohibits the NCBs and members of their decision-making bodies, when exercising their ESCB-related tasks, from seeking or taking instructions from EU institutions or bodies, from any government of a Member State or

text: from any other body. In addition, EU institutions, bodies, offices or agencies, and the governments of the Member States are prohibited from seeking to influence those members of the NCBs’ decision-making bodies whose decisions may affect the fulfilment of the NCBs’ ESCB-related tasks. Whether an NCB is organised as a state-owned body, a special public law body or simply a public limited company, there is a risk that influence may be exerted by the owner on its decisionmaking in relation to ESCB-related tasks by virtue of such ownership. Such influence, whether exercised through shareholders’ rights or otherwise, may affect an NCB’s independence and should therefore be limited by law . This entails the absence both of shareholders’ influence on decision-making in these fields and of a conflict of interest . 2.4 The draft law on Banca d’Italia’s ownership structure would repeal Article 5.1 of Law Decree 133/2013, which prevents the Banca d’Italia shareholders’ meeting and board of directors from interfering in the exercise of the ESCB-related functions of the Banca d’Italia or its Governor. Moreover the draft law would also repeal Article 5.2 of Law Decree 133/2013, according to which the Banca d’Italia board of directors is composed of the Governor and 13 directors appointed in the manner prescribed by the Statute of Banca d’Italia, among candidates who meet the requirements of independence, integrity and professional experience laid down therein and are designated by a specific internal committee within the board of directors. These provisions being repealed are also mirrored in the Statute of the Banca d’Italia . The ECB notes that it is legally unclear whether, as a result of the draft law, a previously repealed provision of Italian law would be reinstated. According to such provision the Banca d’Italia board of directors is prevented from interfering with the institutional tasks, which the ECB understands include the ESCB-related tasks, of the Banca d’Italia. In this respect, the ECB notes that even if the first provision is deemed to be reinstated it would, however, not apply to prevent such interference by the shareholders’ meeting. 2.5 The principle of institutional independence refers to the decision-making bodies exercising the ESCB-related tasks. In the case of Banca d’Italia, it is the governing board which is responsible for the performance of the Banca d’Italia’s ESCB-related tasks and therefore qualifies as a decisionmaking body within the meaning of Article 130 of the Treaty. In contrast, the Banca d’Italia’s shareholders’ meeting and board of directors do not intervene in the performance of ESCB-related tasks nor in the decisions concerning those tasks, and they therefore cannot be considered as decision-making bodies within the meaning of Article 130 of the Treaty. Based on this internal structure of Banca d’Italia, the shareholders’ meeting and the board of directors are prohibited from seeking to influence the governing board as the Banca d’Italia’s decision-making body responsible for the performance of the Banca d’Italia’s ESCB tasks . Therefore, the ECB considers it important that Articles 5.1 and 5.2 of Law Decree 133/2013 are not repealed.

text: 2.6 The draft law on Banca d’Italia’s ownership structure would also repeal a provision that the Minister of Economy and Finance does not have the power (formerly provided for under a law dating from 1910) to suspend and annul the resolutions of the Banca d’Italia board of directors when the Minister deems such resolutions to be contrary to laws, regulations and statutes . The ECB requests that the repeal of this provision be clarified. As a general observation, the ECB calls on the Italian authorities to carefully consider the possible unintended direct or indirect effects of the draft law on Banca d’Italia’s ownership structure on the independence of the Banca d’Italia, as established in Article 130 of the Treaty. 2.7 The draft law would also repeal Article 4.1 of Law Decree 133/2013, according to which the Banca d’Italia is independent in the management of its finances. The ECB understands that the repeal of this provision was unintended, having regard to the relevance of financial independence as part of the principle of central bank independence under Article 130 of the Treaty. It is therefore recommended that

text: Article 4.1

text: be reinstated.

text: Legal uncertainties

text: 2.8 The ECB highlights a number of legal uncertainties which stem from the draft law as a result of the repeal of existing provisions of Italian law affecting the Banca d’Italia and the unclear interaction between the draft law and the Statute of the Banca d’Italia, as further elaborated in paragraphs 2.10-2.13 below. 2.9 The ECB understands that a number of the existing provisions of Italian law that are repealed by the draft law on Banca d’Italia’s ownership structure are mirrored in other provisions of Italian legislation, and that these corresponding provisions in other provisions of Italian law continue to apply and are not affected by the draft law. This is the case, for example, with respect to the repealed articles providing that (1) the Banca d’Italia, a public-law institution, is the central bank of the Italian Republic and is an integral part of the ESCB; and (2) the Banca d’Italia is independent in the exercise of its powers . 2.10 As noted in paragraph 2.7 above, the draft law would also repeal Article 4.1 of Law Decree 133/2013, according to which the Banca d’Italia is the national competent authority in the SSM. The ECB understands that the repeal of this provision was unintended, in the absence of any proposal of reform of the national supervisory authorities . For the sake of legal certainty, it is suggested that

text: Article 4.1

text: be reinstated. 2.11 A number of existing provisions of Italian law that are repealed by the draft law on Banca d’Italia’s ownership structure are mirrored in the Statute of the Banca d’Italia. Some of the corresponding provisions in the Statute of the Banca d’Italia are directly and potentially conflicting with the provisions of the draft law. In particular, the Statute of the Banca d’Italia provides, inter alia, that (1) shares may only be held by banks, insurance and reinsurance companies with registered and head

text: offices in Italy, foundations social security and insurance bodies with registered offices in Italy, and pension funds ; (2) no shareholder may hold, directly or indirectly, a share of the capital exceeding 3%, and voting rights may not be exercised with respect to excess shares ; and (3) the Banca d’Italia may temporarily acquire its own shares under certain conditions . However, it would seem that the provisions of the draft law relating to the purchase by the Ministry of Economy and Finance of the capital shares of Banca d’Italia currently held by private sector entities and providing that, after such transfer, the Ministry may transfer its shareholding, or part of it, only to public sector entities, would directly conflict with the provision of the Statute of the Banca d’Italia under point (1) above, and would potentially also contradict the provisions of the Statute of the Banca d’Italia under points (2) and (3) above. The draft law is silent on the possible criteria to solve this conflict, which should be contemplated in the draft law. The Italian authorities are invited to address these direct and potential conflicts for the sake of legal certainty, in order to prevent negative impacts on the smooth functioning of the Banca d’Italia. 2.12 Since certain existing provisions of Italian law that are repealed by the draft law on Banca d’Italia’s ownership structure set out general criteria to be mirrored in a more extensive manner in the Statute of the Banca d’Italia, it would seem that the relevant provisions of the Statute of the Banca d’Italia would continue to apply. For example, the Statute of the Banca d’Italia provides, inter alia, that the net profit of Banca d’Italia shall be distributed to the ordinary reserves, up to a maximum of 20% of net profit, and after that to shareholders up to a maximum of 6% of the capital, and that the ordinary reserve, if reduced to offset losses, must be reconstituted entirely before proceeding to any profit distributions. The ECB understands that this particular provision of the Statute of the Banca d’Italia is not affected by the draft law. On a general note, the Statute of the Banca d’Italia needs to contain provisions to ensure that irrespective of discretionary decisions of the board of directors and of the shareholders’ meeting, a sufficient amount of ordinary reserves and, if needed, extraordinary reserves, can be constituted to ensure that the Banca d’Italia has the financial means to perform its statutory tasks . In the same vein, it is understood that

text: Article 39

text: paragraph 2 of the Statute on provisions for general risks would continue to apply notwithstanding the draft law repeals

text: Article 6.5

text: lett. a) of Law Decree 133/2013 which requires the Statute to adopt financial buffers adequate to the riskiness consistent with the ESCB guidelines. 2.13 It would need to be clarified whether certain existing provisions of Italian law that are repealed by the draft law on Banca d’Italia’s ownership structure, but which are mirrored in the Statute of the Banca d’Italia, would continue to apply. In particular, the Statute of the Banca d’Italia provides, inter alia, that the capital of the Banca d’Italia shall be €7.500.000.000 and shall be divided into 300,000 registered shares the nominal value of which shall be €25.000 each , and that the shares of Banca d’Italia shall be dematerialised and entered into the central depository system provided for by Legislative Decree 58/1998. In this respect, the ECB understands that the Banca d’Italia’s

text: capital has already been called up. The draft law would also repeal Article 6 of Law Decree 133/2013 that reordered and repealed, for the sake of clarity, a number of provisions of Italian legislation dealing with the ownership structure and governance of the Banca d’Italia. It is legally unclear whether the repeal of

text: Article 6

text: would reinstate all the formerly repealed provisions, to the extent not expressly incompatible with the draft law. The Italian authorities are invited to address these uncertainties. 2.14 At present the governmental delegated regulation mentioned in the draft law on Banca d’Italia’s ownership structure would only deal with the modalities for the transfer of the shareholdings in the capital of the Banca d’Italia. No provision is envisaged to be enacted in relation to the compatibility between the current governance of the Banca d’Italia and the proposed changes in its ownership structure. Finally, by way of general observation, former Italian laws dealing with the ownership and the governance of the Banca d’Italia contained provisions to ensure, for legal certainty purposes, that the Statute of the Banca d’Italia was adapted to the new provisions in accordance with a defined timeline. The draft law contains no rule in this respect, which constitutes an element of legal uncertainty that could be usefully addressed in the draft law.

text: Further consultation of the ECB

text: 2.15 The ECB expects to be consulted pursuant to Articles 127(4) and 282(5) of the Treaty on any further draft legislative, regulatory or statutory amendments to the Banca d’Italia’s ownership and governance structure, including, but not limited to, the governmental delegated regulation provided for in the draft law on Banca d’Italia’s ownership structure as well as any amendment of the governance structure and the Statute of Banca d’Italia that might result from the change in the ownership structure. Impact on ECB supervised credit institutions; right to property 2.16 From a financial perspective, the ECB understands that, under the draft law on Banca d’Italia’s ownership structure, each share of Banca d’Italia currently held by private sector entities would be purchased by the Ministry of Economy and Finance at a nominal value of 1000 lire, equal to 51.64 euro cents , in lieu of the nominal value of €25.000 specified under the Statute of the Banca d’Italia. As a result, credit institutions may be affected to different degrees to the extent that they own shares of Banca d’Italia for a nominal amount equal to the nominal value currently indicated in the Statute of the Banca d’Italia. Therefore, the implementation of the draft law is expected to have a negative impact on the capitalisation of the Italian banking sector, which, in principle, may deserve some attention. 2.17 It is for the Italian authorities to assess whether the draft law complies with Italian legal and constitutional principles . However, the ECB notes that the abovementioned purchase price of the shares of Banca d’Italia may deserve attention by the Italian authorities from the point of view of the right to property.

text: 3. Observations regarding draft law on the ownership of gold reserves

text: 3.1 The question of the legal ownership and the competences of the ESCB with regard to the gold reserves of Member States ultimately relate to the competences of the ESCB under the Treaty. The basic points of reference are Articles 127(2) and 130 of the Treaty. Article 127(2) of the Treaty, which is contained in Chapter 2 (Monetary Policy) of Title VIII of the Treaty, sets out the basic tasks to be carried out through the ESCB. In this respect, it is noted that under

text: Article 3(1)

text: (c) of the Treaty, the Union has exclusive competence in the area of monetary policy for the Member States whose currency is the euro.

text: Article 127(2)

text: , third indent, of the Treaty provides, in particular, that one of the basic tasks to be carried out through the ESCB is to hold and manage the official foreign reserves of the Member States. Article 130 of the Treaty guarantees the independence of the NCBs, including the Banca d’Italia, and the ECB in performing their ESCB tasks. 3.2 The Treaty does not determine ESCB and ECB competences with respect to official reserves by using the concept of ownership. Rather, the Treaty only deals with the dimension of exclusive holding and management of the reserves. 3.3 On the basis of Article 31 of the Statute of the ESCB, operations in foreign reserve assets remaining with the NCBs, including the Banca d’Italia, after the transfers to the ECB referred to in

text: Article 30

text: , and Member States’ transactions with their foreign exchange working balances, are, above a certain limit established within the framework of guidelines issued by the ECB with a view to facilitating such operations, subject to approval by the ECB in order to ensure consistency with the exchange rate and monetary policies of the Union. 3.4 In accordance with Article 130 of the Treaty, when carrying out the task of holding and managing gold reserves, neither the ECB, nor an NCB, including the Banca d’Italia, nor any member of their decision-making bodies, shall seek or take instructions from, inter alia, any government of a Member State. The governments of the Member States undertake to respect this principle and not to seek to influence the members of the decision-making bodies of the ECB or the NCBs, including the Banca d’Italia, in the performance of their tasks. 3.5 In view of these provisions, the ESCB task of holding and managing foreign reserves includes all actions necessary for its effective performance of the Eurosystem’s mandate. For instance, for reserve assets to accomplish their function in foreign reserve management operations, the aspect of full effective control by the central bank is essential. This implies the ability of NCBs to take

text: decisions, in complete autonomy, relating to the holding, retention, disposal, negotiation and daily, as well as long-term, management of the foreign reserves. 3.6 In this regard, it must be noted that the reference in the draft law to the Banca d’Italia acting “exclusively” as a depositary could be read as limiting (or even excluding) Banca d’Italia’s power to independently take decisions related to holding and managing the official reserves that are necessary to accomplish its tasks under the Treaties. Such restriction would be incompatible with Articles 127(2) and 130 of the Treaty, as explained above. The ECB would, therefore, suggest deleting the reference in the draft law to the Banca d’Italia holding and managing the gold reserves in terms of an ‘exclusive title of deposit’. In addition, consistent with the explanatory note accompanying the draft law, an explicit reference in the draft law to the provisions of Articles 127(2) and 130 of the Treaty and, additionally, to Article 31 of the Statute of the ESCB may be useful: it will clarify further the scope of the law, even if these Treaty provisions apply in any case. The independent holding and management of the official foreign reserves (including gold reserves) also specifically means that the official foreign reserves (including the gold reserves) must be recorded on the balance sheets of the NCBs or of the ECB. A transfer of the foreign reserves (including gold reserves) off the balance sheet of Banca d’Italia to the State would circumvent the prohibition of monetary financing under Article 123 of the Treaty, which prohibits central bank financing of the public sector and would be also against the principle of financial independence under Article 130 of the Treaty. 3.7 Consistently with the principle of financial independence under Article 130 of the Treaty, any income accruing to the Banca d’Italia as a result of the management of such official foreign reserves can only be distributed to shareholders through the normal process for the distribution of profits as set out in the relevant legislative and statutory provisions, and after a sufficient amount of reserves has been constituted to ensure that Banca d’Italia has the financial means to independently perform its tasks. 3.8 The ECB notes that if the Italian authorities consider it necessary to clarify the interpretation of the existing legislation as to the legal ownership of gold reserves, then Banca d’Italia shall be consulted in order to ensure that the Treaty requirements and in particular the independence of Banca d’Italia established in Article 130 of the Treaty will continue to be fully respected.

text: Done at Frankfurt am Main, 24 June 2019.

text: [signed]

text: The President of the ECB

text: Mario DRAGHI


text: Ο περί της Κεντρικής Τράπεζας της Κύπρου Νόμος του 2002 (138(I)/2002). 2 Το Σύνταγμα της Κυπριακής ∆ημοκρατίας. 3 All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 4

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). 5 Ο Περί Εργασιών Πιστωτικών Ιδρυμάτων Νόμος (66(I)/1997).

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). See

text: Article 6(2)

text: (d) of the Law on the CBC, as amended by Article 3 of the draft law. 7 See

text: Article 13(1)

text: and (5) of the Law on the CBC, as amended by

text: Article 5

text: (c) and (d) of the draft law, respectively. 8 See

text: Article 17

text: A(6) of the Law on the CBC, as amended by

text: Article 11

text: (b) of the draft law. 9 See

text: Article 13(4)

text: Article 5

text: (a) and (c) of the draft law, respectively. 10 Ibid. 11 There is no need for a motion from the Council of Ministers in this case.

text: See

text: Article 15(1)

text: (k) of the Law on the CBC, as amended by Article 7 of the draft law. 13 See Article 20(3) of the Law on the CBC, as amended by Article 14 of the draft law. 14 See Article 17(4) of Law on the CBC, as amended by Article 10 of the draft law. 15 Article 5 of the Law on the CBC sets out the CBC’s primary objective which is to maintain price stability and, without prejudice to this objective, to support the general economic policies of the State.

text: Article 5

text: A provides that the CBC forms part of and contributes to the performance of the tasks of the ESCB and that it acts within the ESCB’s fields of competence.

text: Article 6

text: provides that the CBC is to perform all tasks required for the achievement of its objectives and lists, without prejudice to the beforementioned, the basic tasks that the CBC may exercise. 16

text: Regulation (EU) No 806/2014

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

text: Regulation (EU) No 1093/2010

text: (OJ L 225, 30.7.2014, p. 1). 17 See Article 22 of the Law on the CBC, as amended by Article 15 of the draft law. 18 See Article 56(1) of the Law on the CBC, as amended by Article 17 of the draft law.

text: See paragraphs 2.3, 2.4, 2.7, 2.8, 3.1.2, 3.1.3, 3.1.6 and 3.1.7 of Opinion

text: . 20 See for example the ECB’s Convergence Report of May 2018, page 24. 21 See paragraph 2.2 of Opinion

text: See paragraphs 1.1.4 and 1.1.6. 23 See Article 7 of the draft law. 24 See Article 10 of the draft law. 25 See

text: Article 56(2)

text: and (3) of the Law on the CBC as amended by Article 17 of the draft law and paragraph 3.1.8 of Opinion

text: . 26 See Article 59 of the Law on the CBC, as amended by Article 18 of the draft law. 27 See paragraph 3.1.9 of Opinion

title: Opinion of the European Central Bank of 21 June 2019 on the governance and financial independence of the Central Bank of Cyprus and on amendments to the Constitution regarding the Central Bank of Cyprus (CON/2019/24)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 21 June 2019 on the governance and financial independence of the Central Bank of Cyprus and on amendments to the Constitution regarding the Central Bank of Cyprus (

text: ) Introduction and legal basis

text: On 20 May 2019 the European Central Bank (ECB) received a request from the Ministry of Finance of the Republic of Cyprus for an opinion on a draft law amending the Law of 2002 on the Central Bank of 1 2 Cyprus (hereinafter the ‘draft law’) and a draft amendment to the Constitution of the Republic of Cyprus (hereinafter the ‘draft amendment to the Constitution’). The ECB was already consulted on an earlier version of the draft law and provided its observations in Opinion

text: . This opinion focuses on the amendments to the Law of 2002 on the Central Bank of Cyprus (hereinafter referred to as the ‘Law on the CBC’) that differ from the earlier version of the draft law on which the ECB provided its observations in Opinion

text: and also considers the draft amendment to the Constitution. 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 and the draft amendment to the Constitution relate to the Central Bank of Cyprus (CBC). 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 and the draft amendment to the Constitution

text: 1.1 Purpose of the draft law

text: 1.1.1 The draft law introduces amendments to the Law on the CBC in respect of the CBC’s governance structure, the independence of the CBC’s directors, and the CBC’s capital and its alteration. 1.1.2 The Law on the CBC lists the licensing and supervision of authorised credit institutions as one of the CBC’s basic tasks, without prejudice to the Law on the business of credit institutions .

text: The draft law removes the licensing of credit institutions as one of the CBC’s basic tasks and makes reference to

text: Council Regulation (EU) No 1024/2013

text: . 1.1.3 The draft law removes a provision on which the ECB provided its observations in Opinion

text: that provided for different terms of office for the members of the board of directors during a transitional period. More specifically, this provision set out that three out of the five directors appointed for the first time after the entry into force of that draft law would have terms of office of three years. The terms of office of the other two directors would be four years. The draft law also removes the prerequisite that executive and non-executive directors must be citizens of the Republic of Cyprus in order to be appointed . In addition, the draft law has been revised to provide that two members of the executive committee constitute a quorum at any of its meetings . 1.1.4 The draft law revises the grounds for dismissal of directors . The position of an executive director may become vacant for the following reasons: (a) in the case of his or her death; (b) upon a director’s written resignation; (c) if the director no longer fulfils the conditions required for the performance of his or her duties; (d) if the director has been guilty of serious misconduct. The position of a non-executive director may become vacant for the same grounds as for an executive director, as well as in the case of one of the events taking place that are listed in Article 14 of the Law on the CBC. Article 14 of the Law on the CBC provides that a person cannot be appointed as a director if he or she already holds a position that may create a conflict of interest with his or her capacity as a director, and sets out a number of specific events where such a conflict of interest exists. 1.1.5 In addition, the draft law provides that ‘with the exception of the governor and deputy governor’, both executive and non-executive directors may be dismissed by a council that is chaired by the president of the Supreme Court and that has been established in accordance with Article 153(8) of the Constitution at the motion (προσφυγή) of the Council of Ministers . The grounds for dismissal of the governor and deputy governor set out in Article 18(4) of the Law on the CBC have not been changed . 1.1.6 The draft law removes a provision on which the ECB provided its observations in Opinion

text: , which empowered the Council of Ministers to dismiss any CBC director who acquires an interest in or holds a position in a financial institution during the course of his or her term of office with the CBC. 1.1.7 In the provision conferring upon the board of directors the power to adopt CBC accounting policies and procedures in accordance with international accounting standards, the draft law makes reference to the accounting standards that apply to the European System of Central

text: Banks (ESCB) and to the ECB’s Guidelines . In addition, the provision of the draft law concerning the appointment of an alternate as a member of the Governing Council has been revised to refer to the Rules of Procedure of the European Central Bank . 1.1.8 According to the draft law, the executive committee members have no voting rights at meetings of the board of directors when matters connected with the executive committee’s management of the CBC are reviewed . This provision has been redrafted to clarify that this limitation only applies in relation to specific tasks undertaken by the executive committee, namely the carrying out of the CBC’s day-to-day activities and the management of its work, the performance of the CBC’s objectives and mission as set out in Articles

text: A and 6 of the Law on the CBC , and the appointment, suspension and dismissal of employees. The draft law clarifies that the oversight of the executive committee’s actions in relation to the performance of the CBC’s objectives and mission should not concern matters which fall within the ESCB’s fields of competence, the ECB’s competences pursuant to

text: Council Regulation (EU) No 1024/2013

text: and the Single Resolution Board’s competences pursuant to

text: Regulation (EU) No 806/2014

text: of the European Parliament and of the Council . Additionally, this provision is without prejudice to the executive committee’s independence and competence in the performance of its ESCB-related and other duties. 1.1.9 The draft law introduces a qualification to the provision regarding the legal costs to be paid by the CBC as regards acts of the governor, deputy governor and/or members of the board of directors. This qualification stipulates that the CBC will not pay the legal costs incurred and/or damages awarded in connection with any act or omission of the governor and/or deputy governor and/or members of the board of directors during the exercise of their powers in cases where such an act or omission was committed in bad faith, or constituted fraud or gross negligence . 1.1.10 As regards the CBC’s capital, the draft law removes a draft provision that the CBC’s general reserve should not exceed twice its capital and corrects the amount of the capital by setting it at EUR 150 million .

text: 1.2 Purpose of the draft amendment to the Constitution

text: 1.2.1 The draft amendment to the Constitution modifies two Articles concerning the CBC.

text: 1.2.2 The first modification relates to Article 118(4) of the Constitution, which provides for the dismissal of the CBC’s governor and deputy governor. In this respect, the CBC’s governor and deputy governor may be dismissed by a council established in accordance with Article 153(8) of the Constitution and chaired by the president of the Supreme Court. The draft amendment to the Constitution extends the scope of

text: Article 118(4)

text: to the remaining members of the CBC’s executive committee and of the board of directors (i.e. the executive and non-executive directors). 1.2.3 The second modification inserts the words ‘unless otherwise determined by law’ into paragraphs 1, 2, and 3 of Article 119 of the Constitution, which describe the powers and tasks of the CBC’s governor and which, more specifically, provide that the governor is responsible for the CBC’s management and exercises all powers and performs all functions and duties within the scope of the CBC’s competences, assisted by the deputy governor.

text: 2. Observations

text: 2.1 The ECB welcomes the amendments introduced by the draft law, which reflect a number of suggestions provided by the ECB in Opinion

text: . The ECB wishes to make the following additional observations in relation to the draft law. 2.2 The ECB welcomes the revisions introduced as regards the grounds for dismissal of the members of the executive committee as these are now aligned with Article 14.2 of the Statute of the ESCB and reinforce the independence of these members. As noted in the ECB Convergence Reports , NCB statutes must ensure that governors are not dismissed for reasons other than those mentioned in Article 14.2 of the Statute of the ESCB, i.e. where they no longer fulfil the conditions required for the performance of their duties or have been guilty of serious misconduct. This principle also applies to other members of NCB decision-making bodies involved in the performance of ESCB-related tasks, especially where a governor is ‘first among equals’ with colleagues with equivalent voting rights, or where other such members are involved in the performance of ESCB-related tasks . The ECB also notes that these revisions go a step further by providing that the same procedure for the dismissal of the governor and deputy governor also applies with regard to the dismissal of non-executive directors. From a technical drafting perspective, the added wording referred to in paragraph 1.1.5 seems redundant as the governor and deputy governor cannot be considered to be executive or nonexecutive directors. 2.3 The ECB understands the deletion of the provision stipulating that the acquisition of an interest or holding of a position by a director in a financial institution during the course of his or her term would result in his or her dismissal by the Council of Ministers to be a technical amendment,

text: which has been introduced in view of the introduction of a conflict of interest as a ground for dismissal for the non-executive directors . 2.4 The ECB welcomes the amendment to the provision that limits the voting rights of the members of the executive committee at the meetings of the board of directors. This provision aims to clarify the matters over which such a limitation would apply. It might also be useful to clarify the basis on which the board of directors may exercise oversight (ανασκόπηση) of the executive committee’s performance by identifying which of the tasks of the board of directors set out in Article 15 of the Law on the CBC capture the task of oversight (ανασκόπηση) of the executive committee’s performance referred to in Article 17(4) of the Law on the CBC . The ECB also welcomes the added qualification that this provision is without prejudice to the independence and competence of the executive committee in the performance of its ESCB-related and other duties. 2.5 In relation to the amendments introduced regarding the CBC’s capital and its alteration, the ECB reiterates its understanding that according to the draft law, the CBC will be entitled to be automatically recapitalised up to the level of the prescribed capital referred to in the Law on the CBC as amended by the draft law . 2.6 The ECB welcomes the provision of the draft law conferring powers on the board of directors to determine the level of ‘maximum provisions and reserves’ that the CBC can maintain in the medium term . In this respect, the ECB reiterates its understanding that this provision intends to address financial buffers comprising general reserves, capital and financial risk provisions . The ECB furthermore reiterates its understanding that the ‘maximum provisions and reserves’ exclude: (a) specific provisions against already incurred losses; and (b) any amounts recorded by the CBC on revaluation accounts, and that the profit to be distributed by the CBC to the general government account is determined following the establishment of adequate ‘maximum provisions and reserves’. 2.7 Finally, the ECB welcomes the objective of the draft amendment to the Constitution to guarantee legal certainty by ensuring that the draft law is in line with the provisions of the Constitution. In particular, the ECB welcomes the extension of the scope of Article 118(4) of the Constitution on the grounds of dismissal to cover the CBC’s executive directors, putting them on an equal footing with the governor and deputy governor, and notes that the draft amendment to the Constitution goes a step further by providing that the same procedure for the dismissal of the governor and deputy governor also applies with regard to the dismissal of non-executive directors. As regards the modifications to Article 119 of the Constitution, the ECB understands that these modifications aim to bring legal certainty as regards the performance of the powers

text: and tasks of the executive committee, which would otherwise be inconsistent with the powers and tasks of the governor, assisted by the deputy governor. This opinion will be published on the ECB’s website.

text: Done at Frankfurt am Main, 21 June 2019 [signed]

text: The President of the ECB

text: Mario DRAGHI