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

text: Law on financial market stabilisation of 17 October 2008, (2008) Bundesgesetzblatt I, p. 1982.

text: This is the higher of 90 % of the book value as stated in the last audited annual accounts or the real economic value as defined by the Commission; this haircut on the book value is subject to the proviso that the transferring institution retains a core capital ratio of at least 7 %.

text: See Section A. of the explanatory memorandum accompanying the proposed amendment.

text: See Opinion

text: . All ECB opinions are available on the ECB website at www.ecb.europa.eu/ecb/legal/opinions/html/index.en.html.

text: Guiding Principles for Bank Asset Support Schemes issued on 25 February 2009, available on the ECB website at www.ecb.europa.eu.

text: See Opinion

text: This requires that the transferred securities fulfil the ECB’s eligibility criteria and are repoed out or sold to an eligible Eurosystem counterparty.

title: Opinion of the European Central Bank of 24 June 2009 on further financial market stabilisation measures (CON/2009/54)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 24 June 2009 on further financial market stabilisation measures (

text: ) Introduction and legal basis

text: On 26 May 2009, the European Central Bank (ECB) received a request from the German Federal Ministry of Finance for an opinion on a draft law on the further development of financial market stabilisation (hereinafter the ‘draft law’). On 15 June 2009, the ECB received a further request from the German Federal Ministry of Finance for an opinion on a proposal to amend the wording of the draft law (hereinafter the ‘proposed amendment’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the sixth indent of

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to 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 and the proposed amendment

text: 1.1 While the German Federal Government has already taken steps to stabilise the financial markets with the Law on financial market stabilisation , credit institutions nevertheless hold large volumes of structured securities (e.g. asset backed securities, collateralised debt obligations, etc.) and there are further assets with increased default risks in the balance sheets of credit institutions and financial services institutions. These securities and assets are difficult to evaluate and are not easily sold in a volatile market environment. They entail credit and liquidity risks that may result in the write-off of the value of the securities. Thus, confidence in the holders of these instruments and their financial resources may be impaired.

text: 1.2 The draft law 1.2.1 Against this background, the draft law provides for short-term measures to remove structured securities from the balance sheets of financial holding companies, credit institutions and their subsidiaries (hereinafter the ‘transferring institutions’). It also creates certainty with regard to write-offs. 1.2.2 Under the draft law, a transferring institution may transfer structured securities (hereinafter the ‘transferred securities’) at a reduced book value to a special purpose vehicle (SPV) that is established for this purpose. In return, the transferring institution receives bonds for the same value issued by the SPV and guaranteed by the Sonderfonds Finanzmarktstabilisierung (SoFFin, Financial Market Stabilisation Fund), i.e. by the State. Thus, the transferring institution has State guaranteed bonds instead of volatile assets on its balance sheet. The interest and repayment of the bonds are serviced from the cash flows of the transferred securities. In return, the transferring institution pays a guarantee fee adequately reflecting the risk connected to the transferred securities to the Government (the SoFFin). The real economic value of the securities is determined at the time the securities are transferred. If, based on a risk evaluation, the value of the securities is reduced, an additional deduction is made and the resulting value is the ‘fundamental value’. 1.2.3 The transferring institution is obliged to pay a compensatory fee from the amount available for distribution to shareholders. The compensatory fee is equal to the difference between the discounted book value and the fundamental value and is paid in equal annual instalments over the life of the structured security, up to a maximum of 20 years. This payment is made to the SPV to compensate for expected losses arising from the purchase of the asset. The interest rate advantage arising from the deferred payment of the difference between the reduced book value and the fundamental value must be remunerated in the form of a market-based fee for the SoFFin’s guarantee. 1.2.4 Any funds remaining after the SPV’s dissolution are paid to the transferring institution’s shareholders. If the compensatory fee fails to cover losses stemming from the transferred securities, the transferring institution is liable and must fully compensate the Government for such losses out of the amount available for distribution to shareholders. As a consequence, the shareholders of the transferring institution are responsible for all losses stemming from the transferred securities. 1.2.5 The transferring institutions eliminate the risks associated with the transferred securities once they are written down to the reduced book value. To attract new investors and to shield them from the risks associated with the transferred securities, the transferring institutions may issue preferential shares, which may also have voting rights. Such preferential rights have priority over other shareholders and the SoFFin’s claims.

text: 1.3 The proposed amendment 1.3.1 The proposed amendment provides for the transformation of the current Finanzmarktstabilisierungsanstalt (Financial Market Stabilisation Authority) into the Bundesanstalt für Finanzmarktstabilisierung (FMSA, Federal Authority for Financial Market Stabilisation), a Federal authority with legal capacity under public law, within the sphere of responsibility of the Federal Ministry of Finance. Further, under the proposed amendment the deadline for applying to the FMSA for support measures is extended until 31 December 2010. 1.3.2 In substance, the proposed amendment provides for measures to clean up the balance sheets of credit institutions, financial holding companies, their subsidiaries and SPVs with respect to risk positions and non-strategic business areas. These transferring institutions are able to transfer these risk positions and business areas to an organisationally and financially independent winding-up agency separately established under public law for each institution by and under the supervision of the FMSA. As the winding-up agencies are not subject to the provisions of the Banking Act within the framework of the EU law requirements of the Banking Directive , the assets transferred to the winding-up agencies are not subject to the own funds requirements. 1.3.3 The registered office, tasks, organisation, governance and surveillance etc. of these agencies are to be regulated in the statutes of each agency, which are to be published in the Federal Bulletin. 1.3.4 The principle of proprietary responsibility applies, so that a winding-up agency and the direct and indirect owners of the transferring institutions which have a stake in the winding-up agency are liable to pay compensation for any losses. This is a direct and comprehensive liability for the losses of the winding-up agency. At the same time, the liability of the State is to be excluded as far as possible. 1.3.5 According to the explanatory memorandum accompanying the proposed amendment, consideration for the transfer of risk positions and business areas depends on the design of the transfer and on who is ultimately liable for the transferred assets. As stated in the explanatory memorandum, a Landesbank (a bank owned by a German Federal State) should only be able to use this scheme once the Federal States that hold shares in that Landesbank have committed themselves to a reorganisation of the Landesbank sector.

text: 2. General observations

text: 2.1 All the comments and recommendations in relation to the rescue package of the German authorities made by the ECB in Opinion

text: and Opinion

text: apply equally to the draft law and the proposed amendment.

text: 2.2 In line with its previous opinions, the ECB emphasises the following: (i) when adopting measures to deal with the financial crisis, Member States should act in a coordinated manner in order to avoid significant differences in national implementation having a counter-productive effect, which may involve distortions in global banking markets. Moreover, it is crucial to ensure consistency with the management of liquidity and with the operational framework of the Eurosystem . Such considerations are particularly important in ensuring a sufficiently level playing field within the euro area; (ii) the ECB welcomes the fact that the SoFFin, as well as the newly created FMSA, is organisationally separate from the Deutsche Bundesbank, as recommended in Opinion

text: . In this respect, the ECB reiterates its comments made in paragraph 3.1 of Opinion

text: on other aspects of compliance with Article 101 of the Treaty; (iii) as concerns eligibility for support, the ECB notes that, as mentioned in Opinion

text: , the measures under the draft law are available to credit institutions and financial holding companies which have their registered office in Germany, or their subsidiaries. 2.3 The Eurosystem has assessed the features and implementation modalities of asset support schemes and has developed a number of guiding principles for the attainment of the following objectives: (i) safeguarding financial stability and restoring the provision of credit to the private sector while limiting moral hazard; (ii) ensuring that a level playing field within the single market is maintained to the maximum extent possible; and (iii) containing the impact of possible asset support measures on public finances. The seven guiding principles identified are sufficiently broad to apply to all schemes falling under the wide category of asset support measures. These concern: (i) the voluntary nature of participation, with institutions with large concentrations of impaired assets being given priority; (ii) a broad definition for eligible assets; (iii) transparency of valuation of the assets; (iv) an adequate degree of risk sharing; (v) a sufficiently long duration of the schemes; (vi) governance of the institution according to business principles; and (vii) making such support schemes conditional on certain commitments by the participants. 2.4 The draft law 2.4.1 The draft law provides for an asset support scheme according to which a transferring institution sets up its own SPV and transfers securitised assets to it. In exchange, the SPV issues Government guaranteed bonds to the transferring institution. Moreover, under the draft law, the original shareholders of the transferring institution remain liable for any of the SPV’s losses, as long as these are covered by the future amounts available for distribution to shareholders of the transferring institution. Under this model, the securities are removed from the transferring institutions’ balance

text: sheets, while on the other hand the profit distributable to the shareholders will continue to be used until all risks of the securities are covered. For this reason, the draft law may be considered a ‘hybrid’ asset support scheme. 2.4.2 Since the shareholders of the transferring institutions thereby have to fully bear the cost of the scheme as long as the transferring institutions exist, moral hazard as well as incentives to participate are likely to be limited. In addition, possible complexities in determining the correct value of the transferred securities are partially circumvented, as valuation only has an effect for the addressees of the distributable profits of the transferring institution. If the transferred securities are overvalued, the compensation fee paid over the guarantee period would be too low. The difference would then be paid from future distributable profits, which would not be distributed to the shareholders but to the Government. In the event of undervaluation, the opposite occurs and the shareholders would profit from the SPV’s profits. The effect of the scheme on the federal budget and debt may be limited, given that upfront payments by the government are not necessary. 2.4.3 For the reasons given in paragraphs 2.4.1 and 2.4.2 above, the scheme provided for by the draft law is broadly in line with the guiding principles, subject to the specific observations below. 2.5 The proposed amendment 2.5.1 The proposed amendment defines in very broad terms: (i) the possible beneficiaries of the scheme, (ii) the types of assets to be covered, and (iii) the conditions and modalities of the scheme introduced by the proposed amendment. These must be laid down in the statutes of each windingup agency. The proposed amendment thus leaves a wide margin of discretion to the FMSA and the Ministry of Finance to decide whether to establish a winding-up agency and on whether to specify further the modalities and conditions for the transfer of assets to such agency. The ECB recommends that the proposed amendment should follow the guiding principles set out in paragraph 2.3 above and it should be specified that the proposed amendment, and any implementing measures or decisions adopted pursuant to the proposed amendment, should be interpreted in the light of these guiding principles. 2.5.2 The ECB notes that the initial deadline for applying for support measures by the SoFFin is prolonged for one year until 31 December 2010. As stated before , the ECB emphasises that harmonisation regarding the expiry of the various financial support measures within a particular country and the national financial support schemes across the EU is of crucial importance in order to ensure a level playing field. 2.5.3 Due to the general nature of the drafting of the proposed amendment, no more specific comments can be made on it at this point.

text: 3. Specific observations on the draft law

text: 3.1 Eligibility of assets as collateral in Eurosystem refinancing operations 3.1.1 The draft law does not specify any restrictions on the guaranteed bonds that will be provided in exchange for the transferred securities. 3.1.2 The ECB assumes that the debt securities issued by the SPV will be straight bonds rather than, for example, structured securities. This is important for the eligibility of these bonds in Eurosystem credit operations. It should be noted that for example subordinated securities with an appropriate guarantee may be only temporarily eligible as collateral for Eurosystem refinancing operations, i.e. until the end of 2010. For legal certainty reasons, clarification of this issue in the draft law would be welcomed. 3.1.3 The ECB understands that, according to the draft law, the SoFFin’s guarantee covers all issuer obligations in relation to payments of principal, interest and any other amounts due under the transferred securities. Again, this is important for the eligibility of these bonds in Eurosystem credit operations. 3.1.4 The draft law does not specify whether the SPV may sell or pledge the transferred securities received or whether they must be held to maturity. If they can be repoed out or sold by the SPV (which will not be a counterparty to the Eurosystem), then they may be available for use as collateral in Eurosystem credit operations . 3.2 Financial Stability 3.2.1 The scheme provided for by the draft law is expected to offer two possible sources of relief for transferring institutions. First, the exchange of transferred securities for government guaranteed bonds may provide transferring institutions with collateral that can be used to access central bank liquidity. Second, from a regulatory perspective, exchanging securities subject to high capital requirements for government guaranteed bonds may free up capital. 3.2.2 The provision of liquidity and the freeing up of capital would allow transferring institutions to continue their lending activity. Despite the cap on the haircut of 10 %, the risk is that some institutions may have limited incentives to participate in the scheme because of low capital buffers. However, this risk is limited by the condition that the transferring institution retains a core capital ratio of at least 7 % and the haircut is only needed if the fundamental value is lower than the book value. In addition, potential new investors could be discouraged from injecting capital into the transferring institution due to a future allocation of distributable profits to cover the SPV’s losses; however, this is mitigated by the ability of the transferring institutions to issue preferential shares granting new shareholders priority over the SoFFin’s claims. Since the draft law allows for compensation for potential losses in the form of share issues to the SoFFin and this implies

text: increased government involvement in the banking sector, the ECB considers that an assessment of the extent of this additional public involvement should be made and exit strategies be formulated. 3.2.3 Finally, the ECB understands that the transferring institutions continue as going concerns, i.e. they will not be wound up. Therefore, a condition for participation is the maintenance of adequate capital levels, a sound business policy and a solid business model. In the event of the transferring institution’s insolvency and a loss on the SPV’s portfolio, the Government would become responsible for losses on the guaranteed transferred securities. Consequently, the Government has an incentive to avoid the insolvency of a transferring institution by providing further support measures. In this regard, the draft law may necessitate further public support measures. 3.3 Accounting 3.3.1 In the context of the implementation of the draft law, the ECB notes that the accounting treatment of the transferred securities is unclear. Under the current proposal, the shareholders of the transferring institutions remain liable to cover any losses on the transferred securities out of their future amounts available for distribution to shareholders. Clarification is required as to whether: (i) the accounts of the SPVs must be consolidated; and (ii) the transferred assets meet the requirements for derecognition under IAS 39. In addition, given that transferring institutions remain liable for losses, they may not obtain relief from an accounting perspective. However, further clarifications in this regard would be helpful, and the ECB understands that such clarifications may already be under preparation. 3.3.2 Under the draft law, the ‘compensatory fee’ is paid annually by the transferring institutions from their distributable income, over a maximum of 20 years. The obligation to pay this fee is inextricably linked to the decision and ability of the transferring institution to pay dividends to shareholders. In this context, it should be further assessed whether this scheme achieves its intended purpose given that it is unclear whether transferring institutions are required to set up provisions (against net income) for these additional losses in their annual financial statements.

text: Done at Frankfurt am Main, 24 June 2009.

text: The President of the ECB

text: Jean-Claude TRICHET


text: The proposed amendments amend the Law of 29 July 2005 on trading in financial instruments (Dz. U. (Dziennik Ustaw) of 2005, No 183, Item 1538); the Law of 24 August 2001 on settlement finality in payment and settlement systems and on the supervision of such systems (Dz. U. 2001, No 123, item 1351; the Law of 29 August 1997 on banking (consolidated text: Dz. U. 2002, No 72, item 665); the Law of 25 July 2005 on supervision of the capital market (Dz. U. of 23 September 2005 No 183, Item 1537); and the Law of 21 July 2006 on supervision of the financial market (Dz. U. of 4 September 2006 No 157, Item 1119).

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

text: As adopted together with the Law of 4 September 2008 on amendments to the Law on public offering and conditions for introducing financial instruments to the organised trading system, on public companies and on amendments to certain other laws (Dz. U. of 29 December 2008 No 231, Item 1547); the Law of 4 September 2008 on amendments to the Law on investment funds, the Law on banking and the Law on supervision of the financial market (Dz. U. of 29 December 2008 No 231, Item 1546).

text: The Directives to be implemented by the draft law include: (i) Directive

text: of the European Parliament and of the Council of 21 April 2004 on markets in financial instruments amending Council Directives

text: and

text: and Directive

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

text: Council Directive 93/22/EEC

text: (OJ L 145, 30.4.2004, p. 1); (ii) Directive

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

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

text: Commission Directive 2006/73/EC of 10 August 2006

text: implementing Directive

text: of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms for the purposes of that Directive (OJ L 241, 2.9.2006, p. 26).

text: See Article 19 of the Law of 4 September 2008. The constitutionality of that provision was challenged before the Polish Constitutional Tribunal by Poland's President on 23 September 2008 (see pending Case Kp 4/08). 6 See page 2 of the explanatory memorandum to the draft law. 7 See also judgment of the Court of Justice of the European Communities of 19 March 2009 in

text: Case C-143/08

text: Commission of the European Communities v Republic of Poland declaring that, ‘by failing to adopt, within the period prescribed, all the laws, regulations and administrative provisions necessary to comply with

text: Commission Directive 2006/73/EC

text: …, the Republic of Poland has failed to fulfil its obligations under that directive’. 8 All ECB opinions are available on the ECB’s website at www.ecb.europa.eu. 9 See paragraph 2.3 of ECB Opinion

text: and

text: Article 45

text: b(2) of the Law on trading in financial instruments, as amended by the draft law. The ECB notes, however, an amendment to the definition of ‘clearing’ which, following the ECB’s suggestion, was broadened to include activities other than the establishment of mutual obligations of the counterparties to the transaction, as performed by entities providing third-party services to such direct counterparties. 10 See paragraph 2.4 of ECB Opinion

text: and

text: Article 68

text: a(11) of the Law on trading in financial instruments, as amended by the draft law.

text: See paragraph 2.5 of ECB Opinion

text: and Articles

text: and

text: a-68e of the Law on trading in financial instruments, as amended/introduced by the draft law. 12 See paragraph 2.6 of ECB Opinion

text: . 13 See paragraph 2.10 of ECB Opinion

text: . 14 See paragraph 3(5)(i) of ECB Opinion

text: . 15 See Article 48(7) of the Law on trading in financial instruments, as amended by the draft law.

publisher: Europeiska centralbanken

sprak: en

title: Opinion of the European Central Bank of 24 June 2009 on amendments to the rules governing the central securities depository (CON/2009/55)

serie: con

text: OPINION OF THE EUROPEAN CENTRAL BANK of 24 June 2009 on amendments to the rules governing the central securities depository (

text: ) Introduction and legal basis

type: rubrik

text: On 11 May 2009 the European Central Bank (ECB) received a request from the Marshall of the Polish Parliament for an opinion on a draft law amending the Law on trading in financial instruments and certain other laws (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and the third, fifth and sixth indents of

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

text: on the consultation of the European Central Bank by national authorities regarding draft legislative provisions , as the draft law relates to Narodowy Bank Polski (NBP), 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 and scope of the consultation

text: 1.1 The draft law replicates the Law of 4 September 2008 on amendments to the Law on trading in financial instruments and to certain other laws (hereinafter, the ‘Law of 4 September 2008’) which

text: aimed to transpose a number of Community directives into the Polish legal system , as well as to

text: make other amendments to the Polish capital market regulation. The Law of 4 September 2008 has

text: undergone the full legislative procedure in the Parliament but has not yet entered into force due to a

text: challenge before the Constitutional Tribunal against some of its provisions relating to NBP’s share

text: ownership in the Polish central securities depository . According to the explanatory memorandum

text: to the draft law , the aim of the draft law currently presented for consultation is to re-enact those

text: provisions of the Law of 4 September 2008 which are not subject to the constitutional challenge .

text: 1.2 The ECB has previously commented on the draft versions of the Law of 4 September 2008 in its

text: Opinions

text: and

text: as regards draft provisions other than those transposing

text: Community directives. The present opinion refers to those previous ECB opinions. In particular,

text: the provisions affecting the NBP’s share ownership in the Polish central securities depository (i.e.

text: the now constitutionally challenged provisions of the Law of 4 September 2008) were commented

text: on in paragraphs 3.1 to 3.3 of ECB Opinion

text: 2. General observations

text: 2.1 The ECB reiterates some of its comments in its opinions

text: and

text: , to the

text: extent they have not been incorporated in the Law of 4 September 2008, and now in the draft law.

text: Such ECB comments relate in particular to: (i) the need to adapt the statutory definition of

text: ‘settlement’ to standards developed by the Committee on Payment and Settlement Systems of the

text: Bank for International Settlements and by the ECB ; (ii) the need to prevent spillover of risks from

text: the entity providing central counterparty services to the entity providing security settlement

text: services ; (iii) the need to assign tasks related to ensuring the proper operation of the clearing and

text: settlement process not only to Krajowy Depozyt Papierów Wartościowych (KDPW, the Polish central securities depository) but also to other clearing or settlement system operators which may be established in Poland ; (iv) the need for clearing and settlement system operators to submit rules on business continuity measures and on secondary sites as a prerequisite for obtaining a licence ; (v) the need to ensure express coverage of clearing houses under the Law on settlement finality ; (vi) the need ‘for NBP to be expressly made responsible, as one of its tasks, for the oversight of all securities clearing and settlement systems that operate or will operate in Poland, including the systems’ rules, and given access to all information and data relevant to the performance of such oversight tasks’ . 2.2 Specifically, the ECB reiterates paragraph 4 of Opinion

text: on the draft provision foreseeing that certain KDPW tasks may be delegated outside KDPW but solely to KDPW’s own subsidiaries . The ECB noted in this context that, while national laws may provide for authorisation or review requirements in respect of delegating or outsourcing to third parties of the activities of the central securities depositories (CSDs) conducting settlement functions, such laws normally do not require legal dependence by the CSD on third parties to which CSD activities are delegated or outsourced. It may also be desirable for the CSD to have more flexibility to outsource certain technical operations where the CSD retains management and control over the outsourced functions, which would not prejudice further evolution of the securities infrastructure in Poland, its integration with the European securities infrastructure and further market harmonisation.

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

text: The President of the ECB

text: Jean-Claude TRICHET

type: vagledning

utgivare: ecb


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

text: Paragraph 8 of the draft scheme. 5 Paragraphs 10 and 12 of the draft scheme. 6 Paragraph 10 of the draft scheme. 7 Paragraph 13 of the draft scheme. 8 Paragraph 16 of the draft scheme. 9 Credit Institutions (Financial Support) Scheme 2008 (hereinafter ‘the existing Scheme’).

text: Paragraph 5 of the draft scheme. 16 Paragraphs 6 and 11 of the draft scheme.

text: ECB Opinions

text: and

text: respectively. 20 Available on the website of the former French Presidency at www.ue2008.fr. 21 See paragraphs 2.3, 10, 12.4, 16, 22 and 25 of the draft scheme.

text: Paragraphs 20 and 22 of the draft scheme. 23 Paragraph 21 of the draft scheme. 24 See paragraph 3.7 of ECB Opinion

text: ; paragraph 3.2 of ECB Opinion

text: ; paragraph 3.3 of ECB Opinion

text: ; paragraph 3.4 of ECB Opinion

text: ; paragraphs 2.3 and 2.4 of ECB Opinion

text: ; paragraph 3.5 of ECB Opinion

text: ; paragraph 3.2 of ECB Opinion

text: ; paragraph 3.4 of ECB Opinion

text: ; paragraph 3.2 of ECB Opinion

text: ; paragraph 3.3 of ECB Opinion

text: ; paragraph 2.1.2 of ECB Opinion

text: ; paragraph 2.1 of ECB Opinion

text: ; paragraph 3.3 of ECB Opinion

text: ; paragraph 3.4 of ECB Opinion

text: ; paragraph 3.3 of ECB Opinion

text: , paragraph 3.2 of ECB Opinion

text: ; paragraph 3.2 of ECB Opinion

text: ; paragraph 3.5 of ECB Opinion

text: ; paragraph 3.1 of ECB Opinion

text: ; paragraph 3.3 of ECB Opinion

text: ; paragraph 2.3 of ECB Opinion

text: ; paragraph 3.2.2 of ECB Opinion

text: ; paragraph 3.3.2 of ECB Opinion

text: ; paragraph 2.4 of ECB Opinion

text: ; paragraph 3.4.3 of ECB Opinion

text: ; paragraph 3.9 of ECB Opinion

text: See ECB Opinion

title: Opinion of the European Central Bank of 25 June 2009 on changes to financial support measures for credit institutions (CON/2009/56)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 25 June 2009 on changes to financial support measures for credit institutions (

text: ) Introduction and legal basis

text: On 18 June 2009 the European Central Bank (ECB) received a request from the Irish Minister for Finance (hereinafter the ‘Minister’) for an opinion on a draft Credit Institutions (Guarantee of Eligible Debt Securities) Scheme 2009 (hereinafter the ‘draft scheme’), and Section 17 of the Financial Measures (Miscellaneous Provisions) Bill 2009 (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community 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 scheme and the draft law relate to the stability of Ireland’s financial system and the Central Bank and Financial Services Authority of Ireland (hereinafter the ‘CBFSAI’). 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 scheme

text: 1.1 The draft scheme is made pursuant to the Credit Institutions (Financial Support) Act 2008 (hereinafter the ‘2008 Act’). Financial support may only be granted under the 2008 Act until 29 September 2010 . Section 17 of the draft law extends that provision to allow for a later date as specified by the Minister, after consulting the Governor of the CBFSAI (hereinafter the ‘Governor’) and the Irish Financial Services Regulatory Authority (hereinafter the ‘Regulatory Authority’). This extension will allow financial support to be granted under the draft scheme, which will, inter alia, provide credit institutions with access to a stable funding stream and to longer term funding from the capital markets in order to maintain the stability of the Irish financial system .

text: 1.2 Under the draft scheme, credit institutions may apply to the Minister for certain debt securities to be guaranteed by the Minister . The Minister has discretion whether or not to guarantee unconditionally and irrevocably senior unsecured certificates of deposit and commercial paper, other senior unsecured bonds and notes, and other debt securities specified by the Minister . These debt securities must be issued during a six-month issuance period from the commencement date specified by the Minister (hereinafter the ‘commencement date’), subject to any extension of this period specified by the Minister, consistent with European Union State aid rules . Further, an eligible security must not have a maturity in excess of five years . The guarantee will terminate five years after the end of the issuance period, unless extended at the Minister’s discretion, also subject to EU State aid requirements . 1.3 The draft scheme alters the Credit Institutions (Financial Support) Scheme 2008 (hereinafter ‘the existing Scheme’) under which the Minister guarantees an extensive range of liabilities of covered credit institutions, including retail, corporate and interbank deposits, as well as unsecured debt, asset covered securities and dated subordinated debt (Lower Tier 2) for the period from 30 September 2008 to 29 September 2010 . Under the draft scheme, all retail, corporate and interbank deposits remain unconditionally and irrevocably guaranteed in accordance with the terms of the existing Scheme . However, asset covered securities and dated subordinated debt (Lower Tier 2) will no longer be guaranteed after the commencement date . Any other debt securities issued by credit institutions from the commencement date onwards may only be guaranteed in accordance with the draft scheme, as described in paragraph 1.2 of this opinion . 1.4 The draft scheme provides that participating credit institutions will have to abide by the Minister’s directions to comply with restrictions on the wide range of commercial conduct, governance, transparency and reporting requirements applicable under the existing Scheme . In addition, the Minister, after consultation with the Governor and the Regulatory Authority, may direct a participating credit institution to draw up a restructuring plan to ensure compliance with the objectives of the draft scheme, and will do so if a participating institution’s applicable solvency ratio falls below the minimum regulatory standards on a material basis. Any such plan must comply with EU State aid and competition law .

text: 1.5 The draft scheme is subject to review by the Minister at no later than six-month intervals, the results of which are to be provided to the Commission of the European Communities . The Minister will also monitor the amount of eligible securities guaranteed under the draft scheme, and will also be able to vary its terms; however, any such variation will not affect any guarantee in issue at the date of that variation . The draft scheme describes the fee arrangement between relevant institutions and the Minister in respect of each guaranteed security, which is broadly in line with the Recommendations of the Governing Council of the ECB on government guarantees for bank debt issued on 20 October 2008 (hereinafter the ECB’s recommendations on government guarantees’), as further discussed in paragraph 3.2 of this opinion. 1.6 Credit institutions will have to take certain actions to participate in the draft scheme, including filing an application and executing certain documentation, following which the Minister may issue a security guarantee certificate in respect of the guaranteed securities . The Minister may delegate the operation of the draft scheme to the National Treasury Management Agency .

text: 2. General observations

text: 2.1 The ECB has issued opinions on both the 2008 Act and the existing Scheme . In its opinion on the existing Scheme, the ECB stressed that it is of utmost importance to ensure harmonised and coordinated decisions throughout the EU. In this context, the ECB wishes to again draw the consulting authority’s attention to the ‘Declaration on a concerted European action plan of the euro area countries’ of 12 October 2008 (hereinafter the ‘Declaration’) which states that Member States’ actions ‘will be designed in order to avoid any distortion in the level playing-field’, which is a crucial element for the integration of European financial markets. 2.2 The ECB welcomes the fact that the draft scheme appears to have been expressly constructed with due regard to ensuring consistency with the requirements of EU State aid and competition law . 2.3 The ECB notes that, subject to a number of grandfathering arrangements, the draft scheme reduces the scope of liabilities guaranteed by the Minister, as compared with the existing Scheme. Instead of offering blanket coverage to the debt securities eligible under the existing Scheme, debt securities will only be guaranteed under the draft scheme at the Minister’s discretion. Newly issued asset covered securities and dated subordinated debt (Lower Tier 2) will no longer be guaranteed under the draft scheme.

text: 3. Specific observations

text: 3.1 Fee arrangements The ECB welcomes the fee arrangements detailed by the draft scheme, which largely replicate the ECB recommendations on government guarantees. The ECB notes that the fee arrangements also contain provisions authorising the Minister, at their discretion, to apply an alternative credit default swap spread if the relevant data referred to in the ECB’s recommendations on government guarantees are not publicly available, or vary the fee (subject to EU State aid requirements) . Furthermore, an additional fee may be charged in relation to any non-euro denominated guaranteed security . 3.2 Scope of the guarantees and implementation of Eurosystem monetary policy The ECB takes the opportunity of this opinion to reiterate the points made in its previous opinions and to reemphasise the key elements of the Declaration. In addition, the ECB reminds the consulting authority of the ECB’s recommendations on government guarantees. First, the euro area Heads of State also acknowledged the need to cooperate with the ECB to ensure consistency in liquidity management by the Eurosystem and compatibility with the Eurosystem’s operational framework. Second, with a view to ensuring a sufficient level playing-field, uncoordinated decisions among Member States should be avoided as they may involve a fragmentation of the euro area money market. Against this background, the ECB has the following observations. First, the extension of a guarantee to cover interbank deposits, as is the case under the existing Scheme, should be avoided as it could entail a substantial distortion in the various national segments of the euro area money market by potentially increasing short-term debt issuance activity across Member States and therefore impairing the implementation of the single monetary policy, which is a unique competence of the Eurosystem under Article 105(2) of the Treaty. The ECB has expressed this particular concern in a number of opinions delivered to the authorities of Member States, including Ireland . Second, in line with the Declaration, the ECB reminds the consulting authority that the euro area ‘Governments would make available for an interim period … a Government guarantee … of new medium term (up to 5 years) bank senior debt issuance’. In the same vein, the ECB’s

text: recommendations on government guarantees further state that ‘Government guarantees on shortterm bank debt with maturity of three to 12 months could be provided to help revitalise the shortterm bank debt market.’ However, it is noticeable that under the draft scheme there is no limit on the maturity of the short-term certificates of deposit and commercial paper that may be guaranteed by the Minister, implying that short-term bank debt with a maturity of less than three months may be guaranteed in practice. While acknowledging the significant challenges currently faced by the banking sector in Ireland, granting government guarantees for bank debt with a maturity of less than three months should be also avoided to the extent possible. In particular, it is essential that the scheme will not impair the implementation of the single monetary policy throughout the euro area. Finally, the ECB notes that the draft scheme does not specify an end-date, instead suggesting it will terminate at the discretion of the Minister. As stated before, the ECB emphasises that in accordance with the Declaration, harmonisation regarding the expiry of the various financial support measures within a particular country and the national financial support schemes across the EU is of crucial importance in order to ensure a level playing field .

text: Done at Frankfurt am Main, 25 June 2009.

text: [signed]

text: The President of the ECB

text: Jean-Claude TRICHET


text: OJ L 189, 3.7.1998, p. 42. 2 Companies financing the purchase of tangible assets designated by the lessee in view of their subsequent lease to such lessee.

title: Opinion of the European Central Bank of 26 June 2009 on the regulation of finance leasing and leasing companies’ activities (CON/2009/57)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 26 June 2009 on the regulation of finance leasing and leasing companies’ activities (

text: ) Introduction and legal basis

text: On 20 May 2009 the European Central Bank (ECB) received a request from the Cypriot Ministry of Finance for an opinion on a draft law regulating finance leasing and the activities of leasing companies (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community and on the third and sixth indents of

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

text: 1. Purpose and contents of the draft law

text: 1.1 The purpose of the draft law is to lay down a framework for the provision, to the public, of finance leasing services in Cyprus and to establish a prudential supervision regime applicable to finance leasing service providers (finance leasing companies , banks and cooperative credit institutions). Accordingly, the draft law governs (i) the types of business in which finance lease service providers may engage, (ii) eligible lease property, (iii) licensing and regulatory requirements for finance leasing service providers, (iv) the form and contents of a finance lease agreement, (v) the rights and obligations of the parties to a finance lease and (vii) enforcement measures and sanctions. 1.2 As stated in Article 3(2) of the draft law and reiterated in the explanatory memorandum accompanying the consultation request, the draft law does not apply to finance leasing services where (i) they are not offered to the public in Cyprus or (ii) they relate to the sale and purchase of movable property where the sum total of the finance provided does not exceed EUR 5 000 per item

text: of movable property purchased or (iii) the credit period foreseen in the finance lease is inferior to three months. 1.3 This opinion only covers the provisions of the draft law that directly relate to the CBC.

text: 2. New central bank tasks

text: The draft law entrusts the CBC with novel licensing and supervision tasks in connection with finance lease service providers other than cooperative credit institutions or their subsidiaries . Significantly, the draft law recognises the CBC’s powers of entry and investigation, requiring additional expenditure and sufficient human and material resources. For the CBC to be in a position to perform its new tasks in parallel with its Eurosystem-related and other tasks under the Laws on the Central Bank of Cyprus of 2002 to 2007 , it is essential for the CBC to dispose of the abovementioned resources. The ECB notes, in this regard, that the draft law explicitly foresees the reimbursement of the CBC’s expenses arising from the performance of its newly assigned tasks.

text: Done at Frankfurt am Main, 26 June 2009.

text: The President of the ECB

text: Jean-Claude TRICHET


text: EGT L 189, 3.7.1998, s. 42.

text: Alla dessa ECB-yttranden finns på ECB:s webbplats www.ecb.europa.eu. 3 Se Immediate Responses to Financial Turmoil, Ekofinrådets slutsatser av den 7 oktober 2008 som finns på det f.d. franska ordförandeskapets webbplats www.ue2008.fr. Ekofinrådet rekommenderar att i) interventioner bör ske i god tid och stöd bör i princip bara ges under en begränsad tid, ii) skattebetalarens intressen bör tillvaratas, iii) de aktuella aktieägarna bör stå för konsekvenserna av interventionen, iv) regeringen bör ha möjlighet att företa en ändring av företagsledningen, v) företagsledningen bör inte få behålla orättmätiga förmåner, vi) regeringarna bör bl.a. kunna påverka den ersättning som utgår, vii) konkurrenters berättigade intressen bör skyddas, särskilt med hjälp av reglerna om statligt stöd samt viii) negativa konsekvenser bör undvikas. 4 Deklarationen finns på det f.d. franska ordförandeskapets webbplats www.ue2008.fr (ej på svenska). Medlemsstaterna kom överens om att i) säkerställa rimlig likviditet för finansinstituten, ii) underlätta bankers finansiering, iii) ställa ytterligare kapital till finansinstituten förfogande så att finansieringen av ekonomin kan säkerställas även fortsättningsvis, iv) nödlidande banker får rekapitaliseras, (v) säkerställa tillräcklig flexibilitet vid genomförandet av redovisningsreglerna, samt vi) förbättra samarbetet mellan europeiska länder. 5 Se yttrande

text: . 6 Se punkt 3 i ordförandeskapets slutsatser, Europeiska rådets möte i Bryssel den 15-16 oktober 2008. 7 Meddelande från kommissionen – Tillämpning av reglerna om statligt stöd på åtgärder till förmån för finansinstitut med anledning av den globala finanskrisen (EUT C 270, 25.10.2008, s. 8). Meddelande från kommissionen – Rekapitalisering av finansinstitut under den rådande finanskrisen: begränsning av stödet till minsta möjliga och garantier mot otillbörlig snedvridning av konkurrensen (EUT C 10, 15.1.2009, s. 2). ECB-rådets rekommendationer avseende statliga garantier för

text: bankers skulder och ECB-rådets rekommendationer avseende prissättningen av rekapitaliseringar. De två sistnämnda dokumenten finns på ECB:s webbplats www.ecb.europa.eu. 8 Se punkt 3.1.2 i yttrande

text: . 9 Se punkt 3.3 i ECB:s yttrande

text: och punkt 2.3 i ECB:s yttrande

text: . 10 Ärende nr N 69/2009. Beslutet finns på EU-kommissionens webbplats http://ec.europa.eu/competition/state_aid/register/.

sprak: sv

title: Europeiska centralbankens yttrande av den 14 juli 2009 om statliga kapitaltillskott till solventa banker (CON/2009/58)

text: EUROPEISKA CENTRALBANKENS YTTRANDE av den 14 juli 2009 om statliga kapitaltillskott till solventa banker (

text: ) Inledning och rättslig grund

text: Den 30 juni 2009 mottog Europeiska centralbanken (ECB) en begäran från Finansdepartementet om ett yttrande över ett förslag till förordning (nedan kallad ändringsförordningen) om ändring av förordning (2009:46) om kapitaltillskott till solventa banker m.fl. (nedan kallad förordningen). ECB:s behörighet att avge ett yttrande grundas på artikel 105.4 i fördraget om upprättandet av Europeiska gemenskapen och artikel 2.1 sjätte strecksatsen i

text: rådets beslut 98/415/EG av den 29 juni 1998

text: om nationella myndigheters samråd med Europeiska centralbanken rörande förslag till rättsregler , eftersom förslaget till förordning innehåller regler som gäller finansiella institut som har en påtaglig inverkan på de finansiella institutens och marknadernas stabilitet. I enlighet med

text: artikel 17.5

text: första meningen i arbetsordningen för Europeiska centralbanken har detta yttrande antagits av ECB-rådet.

text: 1. Bakgrund

text: 1.1 Den 16 februari 2009 mottog ECB en begäran från Finansdepartementet om ett yttrande över ett utkast till förordningen, som trädde i kraft den 17 februari 2009. På grund av att Finansdepartementets begäran kom in för sent, avgav ECB inte något yttrande. 1.2 ECB konstaterade dock att förordningen utan tvekan omfattades av andra strecksatsen i artikel 105.4 i fördraget och

text: artikel 2.1

text: sjätte strecksatsen i

text: rådets beslut 98/415/EG

text: samt påminde de svenska myndigheterna om deras skyldighet att höra ECB om förslag till ny lagstiftning på ett så tidigt stadium i lagstiftningsprocessen att ECB:s synpunkter fortfarande kan beaktas.

text: 2. Syftet med förordningen

text: När förordningen antogs skrev Finansdepartementet i ett memorandum som åtföljde förslaget att det huvudsakliga syftet med förslaget var att säkerställa de svenska företagens fortsatta tillgång till finansiering. Till följd av krisen på de globala kreditmarknaderna och dess konsekvenser för det svenska finansiella systemet hade tillgången till kapital försvårats i Sverige. Detta hotade att underminera

text: finansieringsmöjligheterna för både små och stora företag, något som skulle kunna få långtgående konsekvenser för hela den svenska ekonomin.

text: 3. Syftet med ändringsförslaget

text: Syftet med ändringsförslaget är att förlänga förordningens giltighetstid med sex månader, från den 17 augusti 2009 till den 17 februari 2010.

text: 4. Allmänna kommentarer

text: 4.1 På grund av att Finansdepartementets begäran om ett yttrande i februari kom in för sent har ECB ännu inte avgett något yttrande över själv förordningen. ECB har dock avgett ett flertal yttranden på begäran av behöriga myndigheter i olika medlemsstater om nationella åtgärder som vidtagits till följd av den globala finanskrisen, och Finansdepartementet uppmuntras att ta del av relevanta synpunkter i ECB:s yttranden av nyare datum om liknande lagstiftningsinitiativ i andra medlemsstater . 4.2 ECB vill också hänvisa till Ekofinrådets riktlinjer till medlemsstaterna som återfinns i slutsatserna från rådets möte den 7 oktober 2008 , samt Declaration on a concerted European action plan of the euro area countries som antogs av statscheferna för euroområdet den 12 oktober 2008 (nedan kallad deklarationen) . ECB understryker särskilt att alla initiativ som behöriga myndigheter i medlemsstaterna vidtar för att återupprätta förtroendet på finansmarknaderna bör samordnas och ha som mål att genomföra de gemensamma riktlinjerna, i nära samarbete med andra medlemsstater och EU:s institutioner . Principerna i deklarationen, samt Ekofinrådets slutsatser, godkändes av Europeiska rådet vid dess möte den 15–16 oktober 2008 . Sådana åtgärder som behöriga nationella myndigheter vidtagit avseende finansinstitut med anledning av den aktuella globala finanskrisen har varit föremål för ytterligare samordning på EU-nivå . Rent allmänt noterar ECB i detta

text: sammanhang, i linje med tidigare yttranden , att det är mycket viktigt att man har klara och tydliga regler där man definierar de villkor under vilka finansinstitut kan få hjälp och samtidigt anger de regler som myndigheterna ska följa när de beslutar huruvida stödåtgärder ska vidtas. 4.3 ECB noterar också att rekapitaliseringsåtgärder i medlemsstaterna bör ha som mål att stärka fundamentalt sunda finansinstitut så att banksystemets funktion och stabilitet kan förbättras samt finansieringen av hela ekonomin kan säkerställas. Särskilt viktigt är det att vara konsekvent när man definierar villkoren för rekapitaliseringar och prissättningen av de instrument som är avsedda att ge finansinstituten grupp ett-tillgångar. ECB understryker vikten av att tillämpa en korrekt prissättning vid rekapitaliseringar så att det finansiella systemets stabilitet kan stärkas och förhållandena på marknaderna kan normaliseras, samtidigt som man upprätthåller likvärdiga konkurrensförhållanden samt underlättar finansieringen av ekonomin. 4.4 Mot denna bakgrund utfärdade ECB-rådet rekommendationer avseende prissättningen av rekapitaliseringar den 20 november 2008. ECB understryker att prissättningen av stöd bör vara riskbaserad och marknadsorienterad, samt bestämmas utifrån kostnaden för en motsvarande garanti på marknadsmässiga grunder där hänsyn tas till den specifika risken av både det instrument som väljs för rekapitaliseringen samt det berörda institutet. Specifika kännetecken på de instrument som används för kapitaltillskott (t.ex. preferensaktier) bör väljas med omsorg så att de, samtidigt som de innehåller incitament till att det statliga stödet till bankerna blir så kortvarigt som möjligt, inte leder till orimligt ökande kapitalkostnader. I linje med deklarationen understryker ECB även att en harmonisering av det datum då de olika nationella stödåtgärderna inom EU löper ut är mycket viktig, särskilt inom euroområdet, och att detsamma gäller för statliga kapitaltillskott till finansinstitut. Slutligen noterar ECB även att deklarationen tydligt understryker att nationella stödåtgärder bör vara tidsbegränsade, även om de får förlängas eller förnyas. ECB rekommenderar därför att entydiga bestämmelser om åtgärdernas giltighetstid inkluderas när stabiliserande stödåtgärder antas .

text: 5. Specifika kommentarer

text: ECB noterar att Europeiska kommissionen i ett beslut daterat den 10 februari 2009 i enlighet med reglerna för statligt stöd i EG-fördraget godkände den svenska stödordningen . Stödåtgärderna befanns överensstämma med kommissionens riktlinjer för åtgärder till stöd för banker under finanskrisen eftersom är tidsbegränsade och kräver en betydande andel privata investeringar utöver det statliga ingripandet. Kommissionen drog därför slutsatsen att ordningen är ett lämpligt sätt att åtgärda en allvarlig störning i den svenska ekonomin och därför är förenlig med artikel 87.3 b i EG-fördraget.

text: Detta yttrande kommer att offentliggöras på ECB:s webbplats. Utfärdat i Frankfurt am Main den 14 juli 2009. [Namnteckning] Jean-Claude TRICHET

text: ECB:s ordförande


title: Opinion of the European Central Bank of 14 July 2009 on the taxation of the Banca d’Italia’s gold reserves (CON/2009/59)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 14 July 2009 on the taxation of the Banca d’Italia’s gold reserves (

text: ) Introduction and legal basis

text: On 26 June 2009 the European Central Bank (ECB) received a letter from the Italian Minister for Economic Affairs and Finance informing the ECB that on the same day an important package of legal provisions would be approved by the Council of Ministers, containing measures aimed inter alia at finding the necessary resources to redress the current public finance situation (Decree-Law No 78 of

text: 1 July 2009 containing measures on the crisis and prorogation terms and on the Italian participation in international missions , hereinafter the ‘Decree-Law’). The Italian Minister brought the ECB’s attention to the fact that Article 14 of this Decree-Law relates to the Banca d’Italia. The Decree-Law was subsequently presented to the Parliament for discussion and conversion into law within 60 days following publication in the Gazzetta Ufficiale della Repubblica Italiana (GU). The subject of this opinion is Article 14 of the Decree-Law as published in the GU and presented for discussion to the Parliament (hereinafter the ‘draft article’), which is different in some elements from the text attached to the abovementioned letter from the Minister. The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community 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 draft article relates 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. 1 Gazzetta Ufficiale della Repubblica Italiana No 150, 1.7.2009, p. 1.

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

text: 1. Purpose of the Decree-Law

text: While the Decree-Law has the very broad intention of increasing resources available to the State budget in the present financial conditions , the draft article under assessment in this opinion specifically provides for a substitute tax of 6% on capital gains registered in the balance sheet generated from the price evaluation of stocks of precious metals for non-industrial use . The ECB understands that the tax would apply also to the Banca d’Italia’s entire holdings of gold , with the exception of the rate of gold stocks which the Banca d’Italia has conferred ‘in fulfilment of obligations deriving from membership of the European Communities’ . The ECB further understands that the economic benefit expected to be received by the State budget from the new tax would mainly be produced by payments to be made by the Banca d’Italia.

text: 2. General observations

text: 2.1 Compliance with the consultation obligation The ECB received the Minister’s letter on 26 June 2009, the day on which the Italian Council of Ministers approved the version of the Decree-Law subsequently sent to the Parliament. In this respect, the ECB notes that

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

text: requires national authorities to consult the ECB on draft legislative provisions concerning matters that fall within its competence. This applies in particular to the Decree-Law, since the draft article imposes financial obligations on the Banca d’Italia and therefore constitutes a draft legislative provision concerning a national central bank (NCB), on which the ECB must be consulted in accordance with the third indent of

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

text: . This consultation obligation is not affected by the manner in which the draft article defines its addressees in general terms as holders of precious metals for nonindustrial purposes. The ECB understands in this context that the Banca d’Italia will be the main entity affected by the proposed taxation and will bear a major part of the newly created tax obligations. The ECB considers that the draft article is not clear and raises concerns from the perspective of its compliance with Community law. The ECB trusts that its comments will be given due

text: 3 The letter from the Minister for Economic Affairs and Finance refers to emergency financial needs resulting from a recent earthquake in the Aquila province, while the Decree-Law provides for several crisis measures, as well as for other measures involving current expenditure, and states that the income of the new tax will be one of the financial sources used to cover the decrease in income and increase in expenditure arising from these measures (see

text: Article 16(1)

text: (a) of the Decree-Law).

text: 4 Paragraph 1 of the draft article.

text: 5 On the Banca d’Italia’s subjection to taxation, see: (i) Article 73 of Decree of the President of the Republic No 917 of 22 December 1986, Gazzetta Ufficiale della Repubblica Italiana, S.O., No 302, 31.12.1986 (the Consolidated Law on Income Tax, the TUIR), as amended, relating to the entities subject to corporate income tax; (ii) Article 114 of TUIR, as amended, specifically relating to the determination of the Banca d’Italia’s income; (iii)

text: Article 3

text: and Article 6(7) of Legislative Decree No 446 of 15 December 1997, Gazzetta Ufficiale della Repubblica Italiana, S.O., No 298, 23.12.1997) on regional tax on productive activities, as amended. As regards the identification of precious metals, including gold, see Article 1 of Legislative Decree No 251 of 22 May 1999, in Gazzetta Ufficiale della Repubblica Italiana No 180, 3.8.1999, as referred to in the draft article.

text: 6 Paragraph 1 of the draft article. consideration by the Italian authorities and that the Italian Government will consult the ECB at an appropriate point in time on an amended version. Moreover, the ECB notes that

text: Article 3(4)

text: and

text: Article 4 of Decision 98/415/EC

text: require Member States to suspend the process of adoption of the draft legislative provision pending receipt of the ECB’s opinion. 2.2 Treaty limitations for financial transfers by NCBs to the State budget The taxation provisions of the draft article would result in transfers of some of the Banca d’Italia’s financial resources to the State budget. Any such transfers of financial resources by an NCB to a Member State’s budget, either in the form of a profit distribution scheme or in any equivalent form, need to comply with the limitations imposed in this respect by the Treaty, and in particular with the principle of central bank independence under

text: Article 108

text: and with the prohibition on monetary 7 8 financing in

text: Article 101(1)

text: . Previous ECB opinions have clarified their implications and can be summarised as follows. (a) Compliance with the central bank independence principle National legal provisions, and in particular NCB statutes, normally prescribe how NCB profits are to be allocated. In the absence of such provisions, the decision on allocation of profits should be taken by the NCB’s decision-making bodies, 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 tasks related to the European System of Central Banks (ESCB) . Moreover, compliance with the principle of central bank independence under Article 108 of the Treaty includes a requirement to ensure the central bank’s financial independence. To ensure such compliance, the Member States should establish legal frameworks for NCB profit distributions which allow for an arm’s length assessment of the financial needs of the respective NCB to be appropriately taken into account. Such assessments should be based on the professional judgement of the relevant NCB’s independent decision-making body rather than on the financial needs of the State, so that the NCB does not become dependent for its finances on the Government, the Parliament or any other third party . The principle of central bank independence requires that no third party should be able to exercise direct or indirect influence, not only over the performance of the NCB’s tasks, but also over its ability, both operationally in terms of manpower, and financially in terms of appropriate financial resources, to fulfil its mandate , i.e. to perform their national tasks, to meet their international obligations and properly cover

text: 7 As also reflected respectively in

text: Article 7

text: and Article 21.1 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘ESCB Statute’).

text: 8 See, e.g. paragraph 6 of ECB Opinion CON/99/16, paragraphs 3.2 and 3.3 of ECB Opinion

text: , paragraphs 2.2 and 2.4 of ECB Opinion

text: and further opinions quoted in the footnotes below. See also ECB’s Convergence Report December 2006, pp. 27-30; ECB’s Convergence Report May 2007, pp. 19-23; ECB’s Convergence Report May 2008, pp. 20-25. All documents available on the ECB’s website at www.ecb.europa.eu.

text: 9 See paragraph 2.3 of ECB Opinion

text: and the ECB’s Convergence Report May 2008, p. 20.

text: 10 See, e.g. paragraph 8 of ECB Opinion

text: and paragraph 3.3 of ECB Opinion

text: 11 See, e.g. paragraph 2.2 of Opinion

text: , paragraph 3.3.1 of Opinion

text: , paragraph 3.3 of Opinion

text: and the ECB’s Convergence Report May 2008, pp. 20-21. their administrative and operational expenses . Having sufficient financial means ensures that the central bank will always and in all circumstances have at its disposal the necessary resources to conduct monetary policy. Indeed, it is of utmost importance to allow a sufficient provision of reserves during years of profits to allow the central bank to face possible losses without weakening its financial means to implement its monetary policy. Similarly, as regards financial provisions or buffers, the NCB must also be free to independently create financial provisions to safeguard the real value of its capital and assets . Furthermore, Articles 28.1 and 30.4 of the Statute of the ESCB provide for calls on the NCBs to make contributions to the capital of the ECB and to make transfers of foreign reserves. The principle of financial independence requires that compliance with these provisions leaves an NCB’s ability to perform its functions unimpaired . (b) Compliance with the monetary financing prohibition The provisions on central bank profit distributions must also comply with the monetary financing prohibition laid down in Article 101(1) of the Treaty and in

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

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

text: Articles 104

text: [now 101] and 104b(1) [now 103(1)] of the Treaty . Those provisions prohibit central bank (ECB or NCB) credit facilities in favour of Community institutions or bodies or in favour of the Member States or their public sector bodies, as well as direct central bank purchases of debt instruments from such entities. With a view to preserving the integrity of the central bank’s balance sheet, the monetary financing prohibition is of key importance to ensuring the primary monetary policy objective of price stability , which must not be impeded. Therefore, the prohibition must be interpreted extensively to ensure its strict application . Even if

text: Article 101(1)

text: refers literally to ‘credit facilities’, i.e. with the obligation to repay such credit, this prohibition may also apply a fortiori to other forms of funding, i.e. without the obligation to repay, since Article 101 of the Treaty has the overall aim of public finance discipline and of prohibiting NCBs from financing the public sector. This implies that both the ultimate objective and the spirit of these provisions must be taken into account in their interpretation . In this respect, to ensure that the distribution of central bank profits to the State fully complies with the monetary financing prohibition, it is of crucial importance that the schedule for central bank profit

text: 12 See, e.g. in particular paragraph 6 of Opinion

text: , paragraph 2.3 of Opinion

text: , paragraph 2.2 of Opinion

text: and the ECB Convergence Report May 2008, p. 20.

text: 13 See, e.g. paragraph 3.3 of Opinion

text: , paragraph 3.2 of Opinion

text: and the ECB’s Convergence Report May 2008, p. 21.

text: 14 See ECB’s Convergence Report May 2008, p. 20. Moreover, Article 33.2 of the Statute of the ESCB provides that in the event of a loss incurred by the ECB which cannot be fully offset against the general reserve fund, the ECB’s Governing Council may decide to offset the remaining loss against the monetary income of the relevant financial year in proportion and up to the amounts allocated to the NCBs.

text: 15 OJ L 332, 31.12.1993, p. 1.

text: 17 See ECB’s Convergence Report May 2008, p. 22.

text: 18 See paragraph 9 of ECB Opinion

text: . distributions, in full or through instalments, do not imply advances on future or provisional profits but only result in the central bank distributing profits that are fully realised, accounted for and audited, which in turn requires due calculation of profits and losses for the relevant reporting period .

text: 3. Taxation of the Banca d’Italia notional gains related to gold reserves

text: 3.1 Definition of the tax base The draft article provides that the taxation liabilities it introduces will be calculated as a proportion of the ‘capital gains registered in the balance sheet generated from the fiscal year-end price evaluation of stocks of precious metals’. The ECB notes in this respect that typically capital gain taxes are levied on the amounts of realised profit resulting from the sale of an asset or from the dividend payments, i.e. the tax base is the value of the profits generated through actual cash flows . The Decree-Law instead provides for a taxation liability to be calculated by reference to the amount of the notional gain resulting from the change in the valuation of the assets (precious metals holdings), as registered in the asset holder’s balance sheet. From the perspective of the Banca d’Italia’s potential taxation liability in respect of its gold reserves, such a definition of the tax base raises the following concerns. 3.2 First, under the Decree-Law, the Banca d’Italia would make financial distributions to the State budget of the amounts calculated as a proportion of notional gains achieved with respect to the Banca d’Italia’s gold reserves. In this regard, the ECB considers that the amount to be transferred to the State under the proposed new taxation is still uncertain . Moreover, the Banca d’Italia may potentially never realise such notional gains, which may either be a result of its management strategy not to sell any of its gold reserves, or a result of subsequent negative price developments, or other limitations preventing the Banca d’Italia from achieving a profit from its gold sales that would correspond to the notional gains used for the tax base calculation. In view of such factors, the tax payments to be made by the Banca d’Italia under the Decree-Law would have no relationship with the amount of the Banca d’Italia’s realised profits, if any, actually earned in the respective periods. If these profits were lower than the preceding tax payments, the Banca d’Italia would need to decrease its resources to make the required payments, which may eventually weaken its financial position. This would also constrain the Banca d’Italia’s capacity to implement appropriate management strategies in relation to its gold reserves since, instead of targeting optimal

text: 19 See e.g. paragraph 3.3 of Opinion

text: , paragraph 2.4 of Opinion

text: , and paragraph 2.4 of Opinion

text: 20 See e.g. judgment of the Court of Justice of 9 December 2004 in

text: Case C-219/03

text: Commission v Spain (OJ C 31, 5.2.2005, p. 3) and judgment of the Court of Justice of 14 November 2006 in

text: Case C-513/04

text: Bernadette Morres v Belgische Staat (OJ C 326, 30.12.2006, p. 6).

text: 21 For instance, the wording of the draft article does not allow the total amount for 2009/2010 to be ascertained.

text: 22 See in particular the ‘Joint Statement on Gold’ of 8 March 2004, available on the ECB’s website at www.ecb.europa.eu. Although the amounts that may be payable by the Banca d’Italia are difficult to ascertain, they could be substantial and would have an impact on the Banca d’Italia’s gold reserves. realisation of its central bank tasks, it would need to mitigate the financial risks of the arising tax liabilities. Furthermore, since holding and managing the foreign reserves of the Member States is a Eurosystem task in accordance with the third indent of Article 105(2) of the Treaty, pressure may not be exerted on an NCB to pursue investment strategies aimed at mitigating the financial risks of arising tax liabilities. The draft article would thus impair the institutional and financial independence of the Banca d’Italia established under Article 108 of the Treaty. 3.3 Moreover, since the new tax is levied on theoretical profits arising out of changes in the accounting valuation of the NCB’s gold reserves, the resulting tax payments by the NCB which would not be covered by its realised profits would amount to an increase of the monetary volume through provision of central bank money to the public sector. This, in parallel to concerns related to central bank independence, raises questions regarding compliance of the draft article with the objective of maintaining public finance discipline, which underlies the monetary financing prohibition in Article 101(1) of the Treaty. Furthermore, even if the Banca d’Italia is able to fully cover its payments to the State budget with realised profits, such profits would only be available to the Banca d’Italia at a later stage, when the actual cash flows related to any possible future central bank gold sales are realised. This implies that the Banca d’Italia would incur a tax liability in expectation of an uncertain income that may or not be realised in the future. Such a situation is in itself a form of credit to the public sector incompatible with the prohibition on monetary financing under Article 101(1) of the Treaty. 3.4 Finally, the draft article also appears not to be in line with basic accounting assumptions laid down in Guideline ECB/2006/16 of 10 November 2006 on the legal framework for accounting and financial reporting in the European System of Central Banks . In particular, under the basic accounting assumption of prudence, which allows the achievement and maintenance of the financial independence of Eurosystem central banks, unrealised capital gains are not recognised as income in the profit and loss account, but are recorded directly in a revaluation account and are thus excluded from the regular profit distribution scheme. Any capital losses are deducted from the dedicated account. These principles, laid down by the ECB’s Governing Council pursuant to Article 26.4 of the Statute of the ESCB, are currently relevant also for the Banca d’Italia’s taxation, according to Article 8(1) of Legislative Decree No 43 of 10 March 1998 and Article 114 of the Consolidated Law on taxation (Decree of the President of the Republic No 917/1986, as amended). In this regard, paragraph 3 of the draft article, which provides for derogation from all other legal provisions, weakens the prudence principle and appears to be incompatible with the primacy of Community law. 3.5 The starting date for the taxation obligations and the timing of the taxation payments The draft article does not appear to clearly exclude a retroactive application of the new tax, since it does not clarify whether this tax would apply in the beginning only to the unrealised capital gains

text: 23 OJ L 348, 11.12.2006, p. 1.

text: 24 Gazzetta Ufficiale della Repubblica Italiana No 61, 14.3.1998. accrued in the first fiscal year from its entry into force, or to the entire amount of unrealised capital gains currently registered in the abovementioned dedicated account. For the ECB, without prejudice to the above observations, there should be no retroactive application of new taxes to NCBs, retroactive application being understood as application of the taxation obligations to reporting periods earlier than the first full reporting period after entry into force of the draft law. Retroactive application of new taxes would impair the NCBs’ ability to efficiently plan the use of their financial resources which is essential to effectively fulfil their mandate; this would be detrimental to the NCBs’ financial independence. 3.6 The draft article foresees taxation payments in instalments transferred in the course of the financial year on profits whose actual realisation and effective amount are still uncertain. Therefore, payments in instalments may result in profit distributions made in anticipation of the central bank income to be realised in the future, which is a prohibited form of central bank financing of the public sector under Article 101(1) of the Treaty. In this context, the ECB considers that any profit transfers to be made by the Banca d’Italia should ensure that such transfers are made on the basis of actual realised profits stemming from the last reporting period. 3.7. Set-off right under Law No 289/2002 In addition, pursuant to Article 65 of Law No 289 of 27 December 2002 , as amended, the losses stemming from the swap transaction carried out by the Banca d’Italia with the Italian Treasury in 2002 may be set off annually against the taxable income, up to 50% of its annual amount. The proposed new tax rule under examination would provide for a taxation of the unrealised gains coming from appreciation of central bank gold reserves, as registered in the Banca d’Italia’s balance sheet and without considering the abovementioned right to set off. The ECB assessed the mechanism laid down by Law No 289/2002 for compliance with Article 101 of the Treaty , and is concerned that the draft article now under consideration will result in a circumvention of this mechanism, producing a further incompatibility with the Treaty.

text: 4. Conclusions

text: 4.1 The ECB concludes as follows. First, although the pool of addressees of the draft article is defined in general terms as holders of precious metals for non-industrial purposes, the Banca d’Italia, due to the extent of its gold reserves, is the entity primarily affected. Second, the draft article raises concerns with respect to the prohibition on central bank monetary financing of the public sector to the extent that it foresees profit distributions in expectation of uncertain central bank income potentially realised in the future, and, in addition, it excludes set-off rights applicable under earlier legislation. Third, the draft article raises concerns with respect to the Banca d’Italia’s institutional and financial independence by allowing for an arbitrary decrease in the Banca d’Italia’s resources

text: 25 Gazzetta Ufficiale della Repubblica Italiana, S.O., No 305, 31.12.2002.

text: 26 See ECB Opinion

text: . and by potentially forcing the Banca d’Italia to deploy asset management strategies targeting financial risks created by the proposed new tax provisions. In particular, the proposed introduction of the new tax scheme has not been preceded by an assessment of the impact on the Banca d’Italia’s financial needs. As a result, the Banca d’Italia’s financial position would be weakened, increasing the risk that it may not have sufficient resources in the future to carry out its ESCBrelated and other tasks. In addition, the Banca d’Italia implements a Eurosystem task by holding and managing foreign reserves and, to the extent that the proposed new tax provisions would oblige the Banca d’Italia to pursue certain asset management strategies, its institutional independence would be impaired. 4.2 In view of the above, the draft article needs to be reconsidered to address the concerns expressed in this opinion, relating in particular to central bank independence and the prohibition on monetary financing. The ECB expects to be consulted on any revised draft legislative provisions in this matter. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 14 July 2009. [ signed ] The President of the ECB Jean-Claude TRICHET


title: Opinion of the European Central Bank of 16 July 2009 on the legal framework for cooperative savings and credit unions (CON/2009/60)

text: OPINION OF THE EUROPEAN CENTRAL BANK of 16 July 2009 on the legal framework for cooperative savings and credit unions (

text: ) Introduction and legal basis

text: On 4 May 2009 the European Central Bank (ECB) received a request from the Marshall of the Polish Parliament for an opinion on a draft law on cooperative savings and credit unions and on amendments to certain other laws (hereinafter the ‘draft law’) . The ECB’s competence to deliver an opinion is based on Article 105(4) of the Treaty establishing the European Community 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 to rules applicable to financial institutions insofar as they materially influence the stability of financial institutions and markets. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

text: 1. Purpose of the draft law

text: 1.1 The draft law will regulate credit unions active in Poland, i.e. SKOK credit unions (spółdzielcze kasy oszczędnościowo-kredytowe). For this purpose, the draft law will replace the current Law on SKOK credit unions of 14 December 1995 (hereinafter the ‘current Law on credit unions’) . SKOK credit unions form a distinct segment of the Polish financial sector. They are entitled to offer similar consumer banking services to those offered by ordinary credit institutions (banks ), with exception of certain types of mortgage credit . However, under the current Law on credit unions, SKOK credit unions are not regulated and supervised by the Financial Supervision Commission

text: 1 Parliamentary Print No 1876 of 19 March 2009.

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

text: 3 Dziennik Ustaw (Dz. U.) of 4 January 1996 No 1, Item 2.

text: 4 Credit institutions registered in Poland are legally referred to as ‘banks’ (this legal term does not cover SKOK credit unions). The term ‘credit institutions’ under Polish law only relates to European Economic Area (EEA) credit institutions from outside Poland. Non-EEA credit institutions are referred to under Polish law as ‘foreign banks’ (

text: Article 2

text: Article 4(3)

text: and

text: Article 4(1)

text: (17) to (20) of the Law on banking of 29 August 1997 (consolidated text: Dz. U. of 12 June 2002 No 72, Item 665, hereinafter, the ‘Law on banking’)).

text: 5 See Article 21 of the current Law on credit unions; cf. judgment of the Polish Constitutional Tribunal of 24 March 2009 (Case No K53/07). (FSC), the Polish financial supervisory authority, but instead by a statutory central association of individual SKOK credit unions, the National SKOK . The draft law will substantially modify these arrangements by giving the FSC powers to regulate and supervise the SKOK system. The FSC will exercise its new powers in relation to the SKOK system, inter alia by: (i) issuing prudential regulations for the SKOK system; (ii) licensing new individual SKOK credit unions and conducting on-site inspections of them ; and (iii) supervising the National SKOK, in particular as regards the operation of ‘stabilisation fund’ which insures the deposits held with the SKOK system . The National SKOK will retain certain regulatory powers in relation to individual SKOK credit unions, in particular as regards making prudential recommendations and exercising control competences in this respect . Nevertheless, the FSC will be exclusively competent to enforce binding corrective measures and to institute rehabilitation or liquidation procedures in relation to individual SKOK credit unions on its own initiative or at the request of the National SKOK . The FSC will also have powers to suspend the governing bodies of the National SKOK if they fail to comply with the FSC’s recommendations . Further substantial changes introduced by the draft law relate to the conversion of credit unions into regular banks, which will be obligatory for credit unions exceeding a specified amount of own funds, introduction of rules regarding the voting power of individual SKOK credit unions in the National SKOK, limitations on the activities of the National SKOK, etc. 1.2 The draft law also amends certain other laws, including the Law on Narodowy Bank Polski of 29 August 1997 (hereinafter, the ‘Law on NBP’). In particular, the proposed amendment to Article 42 of the Law on NBP provides that SKOK credit unions will be eligible to obtain refinancing credit from NBP under the same conditions as regular credit institutions established in Poland .

text: 2. ECB comments

text: 2.1 Obligation to maintain minimum reserves with the central bank The draft law maintains the current arrangements under which SKOK credit unions are not subject to the obligation to hold minimum reserves with NBP. The ECB makes the following observations in this respect.

text: 9 See Articles 40-42, 61-64, 67-68 of the draft law.

text: 13 Consolidated text: Dz. U. of 1 April 2005 No 1, item 2. 2.2 In past opinions adopted at the request of other Member States , the ECB has consistently maintained that the Eurosystem’s minimum reserves obligations apply, inter alia, to credit unions that fulfil the functional criteria of a ‘credit institution’ as defined in the Recast Banking 16 17 Directive . This definition, which is recalled in the Eurosystem’s minimum reserves rules , specifies that credit institutions are undertakings whose business is to receive deposits or other repayable funds from the public and to grant credit for their own account. The ECB is aware that specified types of credit unions are exempt, for prudential supervision purposes, from the scope of application of the Recast Banking Directive and that the national law provisions of the Member States may establish special regulatory regimes in relation to such credit unions, separate from the general regulation of banking activities . However, such exclusions or variations introduced in the area of prudential supervision do not automatically exclude any entities which fulfil the functional criteria of a ‘credit institution’ from the Eurosystem’s reserve requirements, which, in line with the Article 19.1 of the Statute of the European System of Central Banks and of the European Central Bank, constitute a monetary policy instrument and hence have a different function than prudential supervision . Consequently, exemptions provided for as part of the Eurosystem’s minimum reserves regime do not follow the same pattern as exemptions from the prudential rules introduced by the Recast Banking Directive (one element of such exemptions from the Eurosystem’s minimum reserves regime is a lump-sum allowance benefiting, in particular, small credit institutions, irrespective of their legal form ). 2.3 In this context, the ECB notes that SKOK credit unions fulfil the abovementioned functional criteria of a ‘credit institution’ (and will continue to fulfil them under the draft law), namely that they: (i) receive deposits ‘from the public’ within the meaning of the Recast Banking Directive, i.e. 23 24 receive deposits from natural or legal persons ; and (ii) grant credit for their own account . Consequently, in line with its pervious opinions , the ECB considers that SKOK credit unions will be subject to the Eurosystem’s minimum reserves requirements when Poland adopts the euro. Such

text: 15 See paragraphs 10-14 of ECB Opinion

text: (Lithuania), paragraph 3.1 of ECB Opinion

text: (Cyprus) and paragraphs 10-17 of ECB Opinion

text: (Latvia) (All ECB opinions are available on the ECB website at www.ecb.europa.eu/ecb/legal/opinions/html/index.en.html.)

text: 16 See

text: Article 4(1)

text: (a) of Directive

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

text: 18 See Article 2 of the Recast Banking Directive.

text: 19 The current Law on SKOK credit unions is an example of such a special regulatory regime (which will generally be maintained by the draft law).

text: 20 Such as contributing to the stabilisation of the money market interest rates and the enlargement of the banking system’s structural liquidity shortage (cf. paragraph 14 of the ECB Opinion

text: 21 See Article 2.2 of Regulation ECB/2003/9.

text: 22 See Article 5.2 of Regulation ECB/2003/9.

text: 23 As opposed to inter-bank deposits. A statutory condition requiring members of individual SKOK credit unions to have a ‘professional or organisational’ relation with each other (Article 6 of the current Law on credit unions; Article 11 of the draft law) does not constitute an impediment in this respect; cf. paragraph 16 of ECB Opinion

text: 24 See Article 3.1 of the current Law on credit unions and Article 3 of the draft law.

text: 25 See paragraph 14 of ECB Opinion

text: and paragraphs 10 and 17 of ECB Opinion

text: . requirements, and the sanctions related to them , will apply directly by the operation of Community law. 2.4 Irrespective of the above, the earlier imposition of the minimum reserves requirements on SKOK credit unions under national law may enable the harmonisation of Polish law with the Eurosystem’s requirements in this respect, which would facilitate the introduction of euro in Poland. The earlier inclusion of SKOK credit unions in NBP’s minimum reserves regime would seem advisable in particular in connection with the draft law’s proposal to treat SKOK credit unions as eligible for accessing central bank liquidity (as discussed in paragraph 2.6). Extension to the SKOK credit unions of one of the central bank’s monetary policy instruments, i.e. the liquidity support provided by way of refinancing credit, should be accompanied by the application of the minimum reserves obligations, as a complementary monetary policy instrument that is structurally linked to liquidity providing operations . 2.5 In view of the above considerations, the ECB would welcome the harmonisation of the Polish legal system with the Eurosystem’s minimum reserves requirements by the inclusion of SKOK credit unions in the NBP’s minimum reserves regime . At the same time, the ECB considers that both the holding of minimum reserves and access to the refinancing credit may be organised for SKOK credit unions on the basis of a collective transfer mechanism administered by the National SKOK . 2.6 Central bank refinancing credit and compliance with the monetary financing prohibition Amendments to Article 42 of the Law on NBP introduced by the draft law provide that SKOK credit unions will be eligible to receive refinancing credit from NBP in the same manner as ordinary credit institutions (banks). The ECB would like to make the following general comment on the current wording of this article of the Law on NBP, as it may apply to both SKOK credit unions and regular credit institutions. In the past ECB’s Convergence Reports the ECB has expressed concerns that certain elements of the Article 42 of the Law on NBP, taken together with the relevant provisions of the Law on banking, might suggest that NBP refinancing credit may be available to insolvent credit institutions . The ECB considers such cases of central bank solvency

text: 26 See

text: Article 7 of Council Regulation (EC) No 2531/98 of 23 November 1998

text: concerning the application of minimum reserves by the European Central Bank (OJ L 318, 27.11.1998, p. 1) and Regulation ECB/1999/4 of 23 September 1999 on the powers of the European Central Bank to impose sanctions (OJ L 264, 12.10.1999, p. 21).

text: 27 Systemic liquidity shortage enlarged by minimum reserves obligations contributes to increasing the demand for central bank refinancing which, in turn, makes it easier for the central bank to steer money market rates through liquiditynd providing operations (cf. ‘The monetary policy of the ECB’, 2 edn. 2004, p. 79, published on the ECB’s website at www.ecb.int.)

text: 28 See paragraph 3.1 of ECB Opinion

text: , as well as, in relation to different matter, paragraph 2 of ECB Opinion

text: (Poland) and paragraph 2.3 of ECB Opinion

text: (Poland).

text: 29 See Article 38.3 of the Law on NBP allowing collective holding of minimum reserves by cooperative banks.

text: 30 See the ECB’s Convergence Report of May 2008, p. 244, and the ECB’s Convergence Report of December 2006, p. 228, which in particular refers to: (i) Article 70(2) of the Law on banking together with Article 42(7) of the Law on NBP (conditions under which NBP may extend refinancing credit to an uncreditworthy borrower); (ii) Article 142(1) of the Law on banking together with Article 42(3) of the Law on NBP (conditions under which NBP may grant refinancing credit for the purpose of implementing a programme of bank rehabilitation); and (iii) Article 42(6) of the Law on NBP (conditions for possible termination of NBP’s refinancing facility in the event of the worsening of the financial situation of the recipient). support to be incompatible with the safeguards laid down in the Treaty regarding a central bank’s capacity to perform its tasks, as expressed in Article 101(1) of the Treaty and in the implementing secondary legislation . As already noted in the ECB’s Convergence Reports, clearer safeguards are needed in Article 42 of the Law on NBP to exclude expressly any solvency support to financial institutions and to avoid any incompatibility of this Article with the monetary financing prohibition. The ECB reiterates this recommendation in the present opinion. 2.7 Supervisory framework and central bank powers to collect information The ECB welcomes the new supervisory framework introduced in relation to the SKOK system, which attributes supervisory and regulatory responsibilities for SKOK credit unions to the FSC. This should help to maintain fair competition between different participants in the Polish financial market as well as to complement the safety net of the SKOK system, including elements to be provided for through implementing acts issued under the draft law (e.g. in the area of deposit insurance). As regards the competences to be exercised by the National SKOK , the ECB recommends that any overlap with the competences allocated to the FSC should be avoided. 2.8 Moreover, with respect to the tasks to be assigned to NBP as regards regulation of the liquidity situation and refinancing of the SKOK credit unions, creating conditions for their development, assessing their operation and opining on legislation related to them (in parallel to similar tasks assigned to NBP in relation to regular credit institutions) , the ECB considers that any such assignment of new NBP tasks should be based on the assessment that NBP has resources commensurate with such new tasks. In particular, in line with its earlier opinion , the ECB recommends that, in view of the new liquidity regulation task which NBP is to exercise vis-à-vis SKOK credit unions, NBP should be given commensurate powers to obtain all relevant information, if need be by way of direct SKOK reporting to NBP. This opinion will be published on the ECB’s website. Done at Frankfurt am Main, 16 July 2009. [signed] The President of the ECB Jean-Claude TRICHET

text: 31 See in particular

text: Article 1(1)

text: (b)(ii) of

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

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

text: and

text: b(1) of the Treaty (OJ L 332, 31.12.1993, p. 1), which prohibits central bank financing of public sector obligations vis-à-vis third parties; see the ECB’s Convergence Report of May 2008, p. 24, and the ECB’s Convergence Report of December 2006, p. 30.

text: 32 See, e.g., Articles 64-65 of the draft law.

text: 33 See amendments introduced in

text: Article 3(2)

text: points (5)-(6),

text: Article 17(4)

text: (5) and Article 21(4) of the Law on NBP by

text: Article 85(1)

text: -(3) of the draft law.

text: 34 See paragraph 3 of ECB Opinion