EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 16 October  2015  
on recovery and resolution of credit institutions and investment firms  
(CON/20 15/35) 
 
Introduction and legal basis  
On 29 July 2015 the European Central Bank (ECB) received a request from the Italian Ministry of Finance 
(MoF) for an opinion on two legislative decrees on the recovery and resolution of credit institutions and 
investment firms (hereinafter jointly the ‘draft legislative decrees’) . 
The ECB’s competence to deliver an opinion is based on Arti cles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and on the third and sixth indents of A rticle  2(1) of Council 
Decision  98/415/EC1, as the draft l egislative decrees  relate to the Banca d’Italia and to rules applicable to 
financ ial institutions insofar as they materially influence the stability of financial institutions and markets. 
For elements of the draft l egislative decrees  the exclusive purpose of which is the transposition of Union 
law, the ECB’s competence to deliver an op inion is based on Article 25.1 of the Statute of the European 
System of Central Banks and of the European Central Bank  (hereinafter the ‘Statute of the ESCB’) . 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.  Purpose of the draft law  
1.1 The purpose of the draft legislative decrees is to implement Directive 2014/59/EU of the 
European Parliament and of the Counci l2 into Italian law , thereby aligning the Italian  legal 
framework for the recovery and resolution of certain types of entities active in financial markets, 
including credit institutions, investment firms, and financial holding companies that have their 
head office in I taly, with the existing U nion legislation in this field.  
1.2 The draft legislative decrees regulate plan s and procedures for the recovery and resolution of 
entities falling within their scope and the status and the powers of the supervisory and resolution 
authorities in relation to b anking and financial institutions  at both individual and group level.  
                                                 
1  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42) . 
2  Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establ ishing a framework for 
the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, 
and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 
2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the 
Council (OJ L 173, 12.6.2014, p. 190).  
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2 1.3 Directive 2014/59/EU  would be transposed by means of two legislative decrees. The f irst decree3 
defines  the status and powers of the relevant national authorities as well as  the forms o f 
cooperation and exchange of information among them, resolution plans , resolution tools and 
procedures, the establishment of r esolution funds , safeguards, the right of appeal against 
decision s regarding crisis prevention or crisis management measures  and administrative 
penalt ies. The second decree4 would amend the Consolidated Law on Banking5 and the 
Consolidated Law on Finance6 by laying  down rules for recovery plans at individual and group 
level, agreements for group financial support, and early intervention measures , including the 
removal of senior management and the appointment of a temporary administrator  of a credit 
institution. Early intervention measures are to be coordinated with the compulsory administrative 
liquidation procedure to avoid any unwa rranted overlap. Moreover, recovery and resolution 
measures applica ble to credit institutions are extended to invest ment firms established in Italy.   
1.4 Under the draft legislative decrees, t he Banca d’Italia is designated as a resolution authority 
within th e meaning of  Directive 2014/59/EU  (with the National Committee for Companies and 
Stock Exchange, [Commissione Nazionale per le Società e la Borsa,  CONSOB ] entitled to make 
certain proposals within its remit in the case of investment firms) . In observance of the principle of 
organisational autonomy, the Banca d’Ital ia is expected to implement  appropriate measures to 
ensure operational independence between the tasks related to crisis management and other 
tasks conferred upon it and establish mechanisms for cooperation and coordination between the 
different structures  involved .  
1.5 The draft legislati ve decrees  provide for crisis management  tools . The Consolidated  Law on 
Banking has already enabled the Banca d’Italia to take extraordinary measures . For example, the 
Banca d’Italia, acting alone, may prohibit credit institutions from carry ing out new operations or 
require credit institutions to close branches . By contrast , the power to place credit institutions into 
special administration, possibly preceded by provis ional management,  or into compulsory 
administrative liquidation,  was vested in the MoF, acting on a proposal of the Banca d’Italia. The 
draft legislative decrees  amend the Consolidated Law on Banking so as to introduc e recovery 
plans, group financing agreements and early i ntervention measures . The w rite-down and 
conversion of capital instruments, resolution tools and the establishment  and use of resolution 
funds are also introduc ed by the draft legislative  decrees . Finally, resolution tools would be made 
applicable, mutatis mutandis , to investment firms.  
                                                 
3  Draft legislative decree implementing Directive 2014/59/UE of the European Parliament and of the Council of 
15 May 2014 establishing a framework for the recovery and resolution of credit institutions and investment firms and 
amending Council Directive 82/891/EEC, and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 
2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) 
No 648/2012, of the European Parliament and of the Council (hereinafter the ‘Implementation Decree’) . 
4  Draft Legislative Decree amending Legislative Decree No 385 of 1° September 1993 (‘Consolidated Law on 
Banking’) and Legislative Decree No 58 of 24 February 1998 (‘Consolidated Law on Finance’) in implementation of 
Directive 2014/59/UE of the European Parliament and of the Council of 15 May 2014 establishing a framework for 
the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, 
and Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 
2013/36/EU, and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the 
Council (hereinafter the ‘Amending Decree’) . 
5  Legislative Decree No 385 of 1 September 1993.  
6  Legislative Decree No 58 of 24 February 1998.  
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3 1.6 The tools made available to the Banca d’Italia comprise preparatory measures , early intervention 
measures , the write -down or conversion of capital instruments and resolution measures.  
1.7 Preparatory measures  include  recovery plans and group financial support agreements. Recovery 
plans are drawn up by the obliged credit and financial institutions and reviewed and assessed by 
the Banca d’Italia,  which may also require these recovery plans to be update d. Any decis ions 
taken by an institution to implement any measures envisaged in the recovery plan it has drawn up 
must be  notified to the Banca d’ Italia. Regarding group financial support agreements , the 
submission of the draft agreement to the extraordinary meeting of shareholders is subject to the 
prior authorisation of the Banca d’Italia. The decision providing financial support may be  
challenged by the Banca d’Italia in order to prevent or limit its implementation.  
1.8 Early intervention measures  include the implement ation of recovery plans , a request for the 
removal of management and supervisory bodies , special administration and other extraordinary 
measures. Regarding the i mplementation of recovery plans , the Banca d’Italia may request 
obliged institutions to update the recovery plan and require its full or partial implementation.  
Regarding the r equest for the removal of management and supervisory bodies , the Banca d’ Italia 
may request that senior managers and members of management and supervisory bodies of the 
institution are removed and replaced. The appointment of newly appointed senior managers and 
members is subject to the prior approval of the Banca d’Italia.  Regarding s pecial  administration,  
the Banca d’ Italia may remove the management and supervisory bodies of the institution and 
appoint special commissi oners and a supervisory committee instead (special administration may 
be preceded by the interim measure of provisional management in particularly urgent cases) . In 
principle , the special commissioners have the s ame powers as the management bodies of the 
institution but the Banca d’Italia may limit their powers and tasks. The special commissioners and 
the members of the supervisory committee may be removed or replaced by the Banca d’ Italia  at 
any time . Moreover the Banc a d’Italia may appoint commissioners to work temporarily with the 
management body of the institution. Regarding other extraordinary measures , the Banca d’Italia 
may prohibit a  credit institution from  carry ing out new operations or opening new branches.  
1.9 The power to write down or convert relevant capital instruments is vested in the Banca d’Italia.  
1.10 Regarding resolution measures, institutions which are failing or likely to fail may be placed into 
resolution and thus: (a) have their shares, ownership i nstruments, assets, rights or liabilities 
transferred to a purchaser under the sale of business tool; (b) have their shares or other 
ownership instruments transferred to a bridge institution under the bridge institution tool; (c) have 
their assets, rights,  or liabilities transferred to an asset management vehicle company under the 
asset separation tool; (d) be subject to the bail -in tool. The Banca d‘Italia’s decision to place a 
distressed bank into resolution and any changes to the resolution program me are subject to the 
prior approval of the Minister of Economy and Finance, whereas the implementation of the measures outlined in the resolution program me is the sole responsibility of the Banca d’Italia. The 
Banca d’Italia implements t he resolution program me by appoint ing special commissioners, and 
sending specific  orders to the relevant bodies of the institution. The allowances due to special 
commissioners and members of the supervisory committee are set by the Banca d’Italia and 
either paid by the entity under resolution or advanced by the Banca d’Italia and then recovered 
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4 out of the price paid in exchange for the transfer of shares and other equities , from the institution 
under resolution or from the surplus, if any, of the bridge institution  or the asset management 
vehicle company . Claims for such allowances enjoy general priority and, in case of insolvency, 
are treated as preferen tial claims in liquidation proceedings7.  
1.11 Resolution funds for the purpose of achieving resolution objectives may be established within the 
Banca d’Italia8. The management  of such funds may be delegated to recognised deposit 
guarantee schem es. The Banca d’Italia may also decide to establish resolution funds within other 
entities, including recognised deposit guarantee schemes . In th is case the Banca d’Italia 
assesses  whether their statutes are compliant with the rules laid down in the relevant provisions  
of the draft legislati ve decrees  and approves  them.  
1.12 Resolution f unds are financed by means of ordinary ex ante and extraordinary ex post 
contributions levied on banks established in Italy and on Italian subsidiaries of banks established 
outside the Union, borrowings and other forms of financial support , and amounts paid by the 
institution subject to resolution or by the bridge institution. The assets of the f unds are ring -fenced 
from the Banca d’Italia ’s and the funding institutions’ own assets  and only meet the liabilities 
assumed in connection with resolution actions. The same applies where resolution funds are 
established within ot her entities, including recognised deposit guarantee schemes. Creditors of 
the Banca d’Italia, creditors of other entities within which the fund is established and creditors of 
the contributor s to the funds are prevented from taking individual enforcement action against the 
funds.  
1.13 In accordance with the no creditor worse off principle, shareholders or creditors that have 
incurred greater losses in a resolution than they would have incurred in a winding- up under 
normal insolvency proceedings are entitled to the payment of the difference from the resolution 
funds . Where a bridge institution tool or asset separation tool is used, the capital of the bridge 
institution and of the asset management vehicle company is wholly or partially held by the 
resolution fund or by other public entities.  
1.14 Procedural requirements are established to ensure that resolution actions are properly notified 
and a confidentiality regime is imposed upon the authorities involved in resolution actions  and 
their staff . A cooperation regime between public authorities is established,  and the Banca d’Italia, 
other competent authorities and the MoF are also required to provide one another , upon request , 
with all the relevant information for the other authority to carry out its  tasks.  The Banca d ’Italia is  
authorised to impose administrative measures and administrative sanctions.  
1.15 The civil liability of the Banca d’Italia, the members of its bodies and its staff towards third parties 
for actions or omissions in the performance of their duties is  limited to gross negligence and wilful 
misconduct9.  
1.16 In order to implement  the d epos itor preference rule in Italian law, t he ranking of unsecured claims 
in the context of compu lsory administrative liquidation of credit institutions has been amended 
                                                 
7  See Article 37(7) and (8) of the Implementing Decree.  
8  See Articles 78 to 86 of the Implementing Decree.  
9  See Article 24(6- bis) of Law No 262 of 28 December 2005.  
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5 such that  deposit claims take priority over other unsecured claims in the follow ing order : (a) 
claims related to covered deposits and claims of deposit guarantee schemes subrogated to the 
rights and obligations of covered depositors; (b) that part of the deposits o f natural persons, 
micro, small and medium -sized enterprises eligible exceeding the amount covered by deposit 
guarantee schemes and comparable deposits referred paid into non- Union branches of banks 
having their registered office in Italy; and (c) other deposits. The definition of ‘deposits’ clarifies 
that it  includes  certificates of deposits not taking the form of transferrable securities and not 
issued in a series.  
1.17 Finally, t he draft legislative decrees provide for the provision of financing by  the Banca d’Italia 
where a bank is placed into compulsory administrative liquidation and liquid financial resources 
are not available or insufficient  to meet preference claims. In particular, the costs of proceedings 
in relation to any phases preceding the liquidat ion phase ( provisional management, special 
administration or voluntary wind up) are paid in advance by the Banca d’Italia and advance 
payments are then recovered from the financial resources avail able to the credit institution, after 
reimbursement of the c lients entitled to restitution of financial instruments held on custody by the 
credit institution, and before the payment of other preference claims . Where financial resources 
are insufficient to meet the costs of the proceedings in the liquidation phase, which are normally 
to be paid ahead of other preference claims, and where clients’ financial resources are not 
available or not easily available or insufficient  for this purpose,  the Banca d’Italia may make 
advance payment s up to EUR 400, 000 or double the amount payable to the liquidators, 
whichever is higher. Advance payments made by the Banca d’Italia are then recovered from the 
available financial resources with priority over other preference claims (and then from clients’ 
available financial resources )10.  
 
2. General observations  
2.1 The ECB welcomes the draft l egislative decrees , as they strengthen the tools and procedures 
available to the Banca d’Italia to carry out  effective preventive, early intervention and effective 
resolution measures in line wit h the common framework of intervention powers, rules and 
procedures laid down in Directive 2014/59/EU . 
2.2  The ECB stresses, however, that it does not opine on whether the draft law effectively discharges 
the obligations of the Italian  State  to implement Directive 2014/59/EU  in Italian law. Rather , the 
ECB focuses primarily  on those provisions that may impact on the role and tasks of the Banca 
d’Italia as a central bank and as a member of the European System of Central Banks (ESCB) , as 
well as on those pro visions that may impact on the specific tasks conferred on the ECB 
concerning policies relating to the prudential supervision of credit institutions by Council 
Regulation (EU) No  1024/201311. 
                                                 
10   Article 1(35) of the A mending Decree.  
11  Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the ECB concerning policies 
relating to t he prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63).  
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6 2.3 The ECB underlines that, in the context of the proposed conferral of tasks on an ESCB member, 
it is necessary to assess such conferral against the prohibition of monetary financing under 
Article  123 of the Treaty12. The ECB has developed the guidance outlined below , in the form of 
general and specific considerations,  on the basis of which it decides  whether a new task 
conferred on an ESCB national central bank (NCB) is to be considered a central banking task or 
a government task for the purposes of the prohibition of monetary financing .  
2.3.1  General considerations  
First, th e systematic categorisation of tasks assigned to NCBs as central banking or government 
tasks applies to genuinely new tasks that either did not exist in the past or did not form an integral 
part of the central banking tasks assigned to the NCB in t he past. In recognition of the different 
Member States’ legal frameworks, central banking traditions and national set -ups, t he tasks 
currently discharged by an NCB  as central banking tasks are not reviewed and re- categorised, 
but may be reassessed if they are subject to legislative amendments of substance.   
Second, the principle of financial independence requires that the Member States may not put 
their NCBs in a position where they have insufficient financial resources to carry out their ESCB - 
or Eurosystem -related tasks, as applicable.  
Third, central banking tasks comprise in particular those tasks that are related to the tasks listed in Article 127(2), (5) and (6) of the Treaty.  
Fourth, new tasks conferred on an NCB which are atypical of NCBs’ tasks, or which are clearly 
discharged on behalf of and in the exclusive interest of the government or of other public entities, 
should be considered as government tasks. In that context, a distinction should be drawn 
between liquidity - and solvency -related tasks of  NCBs. While, for purposes of the monetary 
financing prohibition, solvency support is a government task, liquidity -related tasks, the ultimate 
objective of which are to finance the economy, are central banking tasks.  
2.3.2  Specific considerations  
Resolutio n tasks can be considered central banking tasks , provided that they do not undermine 
an NCB’s independence in accordanc e with Article 130 of the Treaty.  However, the discharge of 
these tasks by central banks may not extend to the financing of resolution funds or other 
resolution financial arrangements as these are government tasks
13. This is without prejudice to 
the following: ( a) the possibility that central banks may provide short -term financing to deposit 
guarantee schemes under certain conditions ; and ( b) the possibility that NCBs may provide 
emergency liquidity assistance to solvent credit institutions.  
An important criterion for qualifying a new task as a government task is therefore the impact of 
the task on the institutional, financial and personal in dependence of the NCB. In particular, the 
following should be taken into account.  
First, it should be assessed whether the performance of the new task creates inadequately 
addressed conflicts of interests with existing central banking tasks, and does not n ecessarily 
                                                 
12  See Opinion CON/2015/22.   
13  See paragraph 2.3.2 of Opinion CON/2015/22.  
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7 complement those existing central banking tasks. If a conflict of interest arises between existing 
and new tasks, there should be sufficient mitigation in place to adequately address that conflict. 
Complementarity between the new task and existi ng central banking tasks should not, however, 
be interpreted extensively, so as to lead to the creation of an indefinite chain of ancillary tasks. 
Complementarity should also be examined from the point of view of the financing of those tasks.  
Second, it should be assessed whether without new financial resources the performance of the 
new task is disproportionate to the financial or organisational capacity of the NCB and may 
negatively impact on its capacity to properly perform existing central banking tasks . 
Third, it should be assessed whether the performance of the new task does not fit into the 
institutional set -up of the NCB in the light of central bank independence and accountability 
considerations.  
Fourth, it should be assessed whether the performance of the new task harbours substantial financial risks.  
Fifth, it should be assessed whether the performance of the new task exposes the members of the NCB’s decision- making bodies to political risks which are disproportionate and may also 
impact on their personal independence and, in particular, the guarantee of the term of office 
under Article 14.2 of the Statute of the ESCB.  
2.3.3  Any final assessment on the qualification of a task given to an NCB as either falling within the 
scope of a central banking tas k or a government task will be guided by the objective of ensuring 
the consistent application of the prohibition of monetary financing within the Eurosystem and the ESCB to the extent that it applies to its members.  
 
3.  Specific observations  
3.1  Establis hment of r esolution funds  within  the Banca d’Italia  
3.1.1  In line with Article 105 of Directive 2014/59/EU, t he draft legislati ve decrees  provide that the 
funding of r esolution funds may be ensured through loans and other forms of financial support in 
the event that ordinary ex  ante and extraordinary ex  post contributions are not immediately 
accessible or sufficient. However, t he ECB notes that the draft legislati ve decrees  do not specify 
the financial institutions or  the third parties that are allowed to provid e financial support , the 
nature of eligible financial support arrangements or the terms and conditions of any such 
arrangements.  The ECB underlines that, even though this is not expressly stated in the draft 
legislative decrees, the Banca d’Italia is  not authorised to provide any loan or financing under any 
circumstances to the r esolution funds, as the provision of such financing would constitute a 
government task in breach of the prohibition of monetary financing under the Treaty
14. 
3.1.2 The draft legislative decrees provide that where a bridge institution tool or the asset separation 
tools are used the capital of the bridge institution and of the asset management vehicle company are wholly or partially held by the resolution fund or public bodies . Wh ile this provision 
                                                 
14  See paragraph 3.1.4 of Opinion CON/2015/22.  
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8 implements Directive 2014/59/EU15, where a resolution fund established within a central bank 
holds such capital, it should be clarified, for the avoidance of doubt, that the central bank will not 
employ its resources , other than those col lected in the resolution fund,  to assume or finance any 
obligation of these entities16. The role of a resolution fund established within a central bank as 
owner of such an entity must remain consistent under all circumstances with the prohibition on 
monetar y financing under Article 123 of the Treaty, as supplemented by Council Regulation (EC) 
No 3603/9317, which  prohibits, inter alia, any financing by a central bank of the public sector’s 
obligations vis -à-vis third parties. Moreover, this role must be perfor med without prejudice to 
central bank independence, in particular its financial and institutional independence18. The 
principle of financial independence requires NCBs to have sufficient means to carry out not only 
their ESCB -related tasks from an operational and financial point of view, but also their national 
tasks19. For that reason, it should be ensured that if a resolution fund established within the 
Banca d’Italia becomes the owner of such an entity, sufficient financial and human resources are 
provided to address the operational burden associated with it.  
3.2 Conferral of resolution tasks on the Banca d’Italia  
The draft l egislative decrees  designate the Banca d’Italia as the resolution authority, broadening 
its responsibilities so as to include the powe r to propos e placing obliged entities into resolution 
and to take resolution measures in respect of such entities . In the light of the guidance set out in 
paragraph 2.3, it  must be assessed carefully whether the Banca d’Italia’s new tasks and 
responsibilit ies in this field could constitute a breach of the monetary financing prohibition.  
3.2.1 New tasks  
The ECB notes that whilst the Banca d’Italia has had for many years powerful tools to intervene 
in distressed financial institutions which pose a risk to financial stability, principally in the form of 
the special administration regime, the draft l egislative decrees  introduce specific, new resolution 
tools, such as the bail-in, bridge institution and asset management vehicle  tools , which in their 
proposed form  do not currently exist in Italian law, as well as expanded ancillary powers which 
did not exist as separate resolution measures or powers in the past. The draft l egislative decrees 
thus introduce substantial legislative amendments to the Banca d’Italia’s existing resolution-
related tasks that are currently categorised as central banking tasks , and should therefore be 
assessed in the light of the monetary financing prohibition.  
3.2.2  Principle of financial independence  
The principle of financial independence requires NCBs to have sufficient means to carry out not 
only their ESCB -related tasks from an operational and financial point of view, but also their 
                                                 
15  See Articles 40(2)(a) and 42(2)(a)  of Directive 2014/59/EU . 
16  See paragraph 3.4.2 of Opinion CON/2015/25.  
17  Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the 
prohibitions referred to in Articles 104 and 104b (1) of the Treaty (OJ L 332 , 31.12.1993,  p. 1).  
18  See paragraph 3.3 of Opinion CON/2012/99, paragraph 5 of Opinion CON/2011/84 and paragraph 3.6 of Opinion 
CON/2011/39.  
19  See the ECB’s 2014 Convergence Report, p. 25.  
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9 national tasks20. Hence, the provisions  of the draft legislati ve decrees  authorise the Banca d’Italia 
to anticipate allowances due to special commissioners and members of the supervisory 
committee and then recover such expenses from the institutions concerned21 in order to 
safeguard the Banca d’Italia’s financial independence.  
Furthermore, t he ECB notes that the Banca d’Italia, before deciding to place an obliged credit or 
financial institution into resolution or compulsory administrative liquidation, is required to obtain 
the MoF’s prior approval.  However, the ECB understands that the liability for  damages arising 
due to gross negligence or wilful misconduct under the Consolidated Law on Banking remains 
with the Banca d’Italia and its staff , while the MoF will also be liable in accordance with the 
general liability regime of the State.  
3.2.3  Links to tasks listed  in Article 127(2), (5) and (6) of the Treaty   
Administrative resolution tasks are considered tasks related to those referred to in Article 127(5) 
of the Treaty, based on the understanding that administrative resolution tasks and supervisory 
tasks complement each other, particularly where, as in this case, an NCB has a mandate for the 
stability of the financial system, or where, as in this case, the designated resolution authority 
already has certain responsibilities in connection with the supervision of cr edit and financial 
institutions.  
3.2.4  Atypical tasks 
A number of Member States have conferred on their NCBs a significant role in the resolution of 
financial institutions, whether as the resolution authority or as a competent authority in the 
decision -making pr ocess for resolution. The ECB has generally welcomed the allocation of such 
tasks to NCBs provided they do not interfere financially and operationally with the performance of 
the NCB’s ESCB- related tasks22. The resolution tasks of an NCB can therefore be regarded as 
being tasks not atypical of a central bank, particularly if, as in the case of the Banca d’Italia,  it has 
had for many years powerful tools to intervene in  distressed financial institutions which pose a 
risk to financial stability.  
3.2.5  Discharge of t asks on behalf of and in the exclusive interest of the Government or of other public 
entities  
Whilst the Banca d’Italia is designated as the sole resolution authority and takes resolution 
measures acting as an administrative authority in the exercise of pu blic functions in its own name, 
and not on behalf of any other authority, as noted in paragraph 3.3 .2 above, it is required, before 
deciding to place an obliged credit or financial institution into resolution or compulsory 
administrative liquidation, to obtain the MoF’s prior approval . There is , however,  no indication that 
in discharging its resolution function the Banca d’Italia  acts exclusively in the interests of the MoF 
or another public entity.   
                                                 
20  See the ECB’s  Convergence Report, 2014, p. 25. 
21  See para. 3.2.2.  
22  See paragraph 2.3 of  Opinion CON/2015/22, paragraphs 2.1 and 3.2.4 of Opinion CON/2015/22, paragraph 4.1 of 
Opinion  CON/2014/60, paragraph 2.1 of Opinion CON/2013/73, paragraph 2.3 of Opinion CON/2011/72, 
paragraph 2.2 of Opinion CON/2011/83, and paragraph 2. 2 of Opinion CON/2011/39.   
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10 3.2.6 Extent to which c onflict of interests  with existing  Banca d’Italia tasks are addressed  
The ECB has repeatedly noted23, in line with Directive 2014/59/EU24, that staff involved in 
carrying out the functions of a resolution authority in accordance with Directive 2014/59/EU  must 
be structurally separate and subject to separate reporting lines from the staff involved in carrying 
out prudential banking supervision tasks pursuant to applicable EU legal acts25 or with regard to 
the other functions of the relevant authority. Directive 2014/59/EU  ‘exceptionally’ allows  one 
authority to carry out both resolution and supervisory functions on the condition that adequate 
structural arrangements are put in place in order to ensure operational independence and to 
avoid conflicts of interest between that authority’s resolution function and its other functions. For 
example, Directive 2014/59/EU  envisages structural separation being achieved by keeping the 
reporting lines for staff involved in carrying out resolution tasks separate from those used by staff involved in supervision activities
26. Pursuant to the draft legislation, the Banca d’Italia, in full 
compliance with the principle of independence, shall provide appropriate arrangements for the 
separation of crisis management tasks from other tasks, to ensure the operation al independence 
of the Banca d’Italia, and shall establish cooperation and coordination arrangement between the 
structures involved27.  
3.2.7  Extent to which the performance of tasks is proportionate to the Banca d’Italia’s financial and 
operational capacity and its ability to perform its ESCB -related tasks  
3.2.7.1  In line with Article 37(7) of Directive 2014/59/EU , the draft legislative decrees authorise the Banca 
d’Italia to advance the allowances of commissioners and members of the supervisory committee 
of an i nstitution placed into resolution, and then recover these advances out of the amounts paid 
in exchange for the transfer of shares and other equities from the entity under resolution or from 
the surplus, if any, of the bridge institution or the asset management vehicle company. Claims for 
such allowances enjoy general priority and, in case of insolvency, are treated as preference 
claims in liquidation proce edings .  
3.2.7. 2 Also, where a bank is placed into compulsory administrative liquidation and liquid financial 
resources are not available or insufficient, costs and allowa nces related to provisional 
management , special administration or voluntary winding up are paid in advance by the Banca 
d’Italia . Advance payments are then recovered from the financial res ources available to the credit 
institution, after reimbursement of the clients entitled to restitution of financial instruments held on 
custody by the credit institution, and before the payment of other preference claims. Costs of 
proceedings in relation t o compulsory administrative liquidation may be also paid in advance by 
                                                 
23  See paragraph 4.3 of Opinion CON/2015/2, paragraphs 5.1 and 5.2 of Opinion CON/2015/3,  and paragraph 3.3 of  
Opinion CON/2014/67.  
24  See the second subparagraph of Article 3(3) of Directive 2014/59/EU.  
25  Regulation (EU) No. 57 5/2013 of the European Parliament and of the Council of 26 June 2013 on prudential 
requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 
27.6.2013, p. 1), and Directive No. 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on 
access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, 
p. 338).  
26  See Opinion CON/2014/67, paragraph 3.1.  
27  Article 3(6). 
ECB -PUBLIC  
11 the Banca d’Italia where financial resources are not available.28 Such advance payments are then 
recovered from the available liquid financial resources with priority over other preference claims 
(and then from clients’ available financial resources )29.  
3.2.7. 3 As noted in paragraph 3.2.2, in order to remain financially independent, NCBs must have 
sufficient means to carry out not only their ESCB -related tasks from an operational and fina ncial 
point of view, but also their national tasks.  
3.2.8  Extent to which the performance of tasks fits into the Banca d’Italia ’s institutional set -up in the 
light of central bank independence and accountability considerations  
As noted above, the Banca d’Italia is required , before deciding to place an obliged credit or 
financial institution into resolution or compulsory administrative liquidation, to obtain the MoF’s prior approval . The Banca d’Italia and the MoF shall agree the practi cal arrangements for the 
timely sharing of information in order to ensure the efficiency and effectiveness of crisis 
management. The ECB considers that the broadened resolution tasks that the Banca d’Italia will 
assume under the draft legislative decrees entail closer cooperation wit h the MoF than for the 
exercise of its other functions.   
3.2.9 Extent to which the performance of tasks involves  substantial financial risks  
The draft legislat ive decrees  stipulate that the Banca d’I talia, the members of its bodies and its 
staff are liable for damages caused by gross negligence or wilful misconduct in the course of 
discharging their functions under the Consolidated  law on Banking
30. The ECB understands that 
liability could attach even if the Banca d’Italia had obtained prior approval from the MoF for the 
improper resolution measure.  However, a s noted above,  the ECB understands that the MoF will 
also be liable for its decisions .  
3.2.10 Conclusion  
The ECB considers that there are grounds for regarding the Banca d’Italia’s expanded resolution 
tasks as central banking tasks, in the sense that they complement the Banca d’Italia’s existing 
supervisory functions. The fact that the Banca d’Italia will be authorised to recover advance payments made for allowances from the institutions concerned should also mitigate their impact 
on its financial  independence. In addition , even though the draft legislati ve decrees  may create 
financial risks for the Banca d’Italia in terms of liability for damages incurred in the performance of 
the new resolution tasks , these risks will be mitigated by the provision whereby the Banca d’Italia 
will be  liable, along with the members of its management bodies and its staff, only for damages 
incurred as a consequence of  its acts or omissions constituting gross negligence and wi lful 
misconduct , while the MoF will be liable for its decisions  also in  the approval of  the Banca 
d’Italia’s resolution measures.   
                                                 
28  See paragraph 1.14.  
29   Article 1(35) of the A mending Decree.  
30  Article 1(2) amending the Consolidated Law on Banking by  reference  to Article 24(6- bis) Law No 262 of 
28 December  2005.  
ECB -PUBLIC  
12 3.3 The MoF’s role in resolutions  
In requiring  the Banca d’Italia to obtain the MoF’s prior approval before deciding to place  an 
obliged credit or financial institution into resolution or compulsory administrative liquidation, the 
question arises as to whether the MoF may be considered to be a second resolution authority 
alongside the Banca d’Italia. The consulting authority is invited to consider whether the MoF’s 
prior consent should be more appropriately limited to those cases in which the resolution 
measures have a direct fiscal impact or systemic implications, as required by Article 3(6) of 
Directive 2014/59/EU . This would a void the MoF acting de facto as joint resolution authority 
alongside the Banca d’Italia, since, if this were the case, the MoF would need to ensure the 
operational independence of its resolution function31. 
3.4  Resolution planning  
The draft legislative decrees stipulate that the evaluation of resolvability and resolution plans 
must not assume the granting of extraordinary public financial support except the use of the 
resources of the r esolution funds, nor the granting of central bank emergency liquidity assistance, 
nor central bank liquidity assistance provided under non- standard collateralisation, tenor and 
interest rates terms32. While this appears to be in line with the requirements of Directive 
2014/59/EU , the ECB emphasises that these provisions do not  in any  way affect the competence 
of central banks to decide independently and in their full discretion on the provision of central 
bank liquidity to solvent institutions, both through standard monetary policy  operations and 
emergency liquidity assistance,  within the limits imposed by the monetary financing prohibition 
under the Treaty33. 
3.5  Determination of failing or likely to fail  
The draft legislative decrees stipulate that the Banca d’Italia, acting as resolution authority, may 
also determine autonomously that an institution is failing or likely to fail  in line with Article 32(2) of 
Directive 2014/59/EU . The ECB notes that Directive 2014/59/EU assigns the failing or likely to fail 
assessment also to the respective supervisory authority, i.e. the ECB or  national competent 
authorities, in line with the distribution of competences provided for in Regulation (EU) No 1024/2013. The ECB also notes that, pursuant to Article 9(1), subparagraph 2, Article 4(1)(e) 
and Article 4(3) of Council Regulation (EU) No 10 24/2013, and Article 104(1)(b) of 
Directive  2013/36/EU of the European Parliament and of the Council, the ECB shall have all the 
powers of the competent and designated authorities under the applicable Union law to ensure 
compliance with regard to significant institutions
34. 
3.6 Establishment of a bridge institution  
Pursuant to the draft legislative decrees , and in line with Article 41(1)  of Directive 2014/59/EU , 
the Banca d’Italia approves a  bridge institution’s memorandum of association and articles of 
asso ciation, the appointment of the members of its management and supervisory bodies, their 
                                                 
31  See paragraph 3. 1.2 of Opinion CON/2015/25 and paragraph 3.3 of Opinion CON/2015/22.  
32  Article s 12(3) and 102(2) of the I mplementing Decree.  
33  See paragraph 3.2 of Opinion CON/2012/99 and paragraph 3.3 of Opinion CON/2014/67.  
34  See paragraph 3.3 of Opinion CON/2015/19.  
ECB -PUBLIC  
13 remuneration and any conferral of delegations, and may impose restrictions on its activity to 
ensure compliance with applicable legislation on State aid.  
In this respec t, the ECB underlines that under  Regulation (EU) No 1024/2013 provisions in 
relation to the ECB’s responsibilities with regard to the authorisation of a credit institution to be 
established in a participating Member S tate35 the banking licenc e necessary for  the access to the 
activity of credit institutions by the bridge institution is to be granted solely by the ECB 
irrespective of the context and the size of the institution which is being created. . . 
Additionally, if the bridge institution is not able to comply with the requirements for authorisation 
from the intended start of its operations, then the resolution authority shall request a temporary exemption from some or all of these  requirements. The ECB will assess the request and if it 
decides to grant suc h an authorisation, it shall indicate the period for which the bridge institution 
is waived from complying with the relevant requirements.
36  
Furthermore, the bridge institution is wholly or partially owned by one or more public bodies which 
may include the resolution funds . The remainder of the ownership may be held by third parties. In 
this respect an assessment of the resulting qualifying holdings might be necessary. In this case 
the ECB would  need to take a decision on the qualifying holdings before the start of the 
operations of the bridge institution37. 
3.7 Depositor preference  
3.7.1 The ECB notes that the draft legislative decrees confer a preference not only on claims arising 
out of deposits guaranteed under the deposit guarantee scheme (including clai ms of d eposit 
guarantee schemes subrogated to depositor claims) and deposits above the guaranteed 
threshold of private individuals and micro, small and medium -sized enterprises, but also on all 
other deposits. Conferring a priority ranking on  all deposits is expected to enhance the 
implementation of the bail -in tool in resolution, because the resolution authority will be able to 
bail-in other senior unsecured bank debt instruments prior to deposits, while minimising the risk of 
compensation claims under the ‘no-creditor -worse- off-than- in-insolvency ’ principle. The bail -in of 
such senior unsecured bank debt instruments is perceived to carry a lower contagion risk than 
that of operational liabilities such as deposits. A general depositor preference is therefor e likely to 
render the bail -in of senior unsecured bank debt more effective and credible, thus fostering 
effective resolution action and reducing the need to have recourse to the resolution fund.  
3.7.2 The ECB understands  from the explanatory memorandum accompanying the draft law, that one 
motivation  of introducing the depositor preference is to make it easier for Global Systemically 
Important Banks (G -SIBs)  to meet the forthcoming  Total Loss Absorbing Capacity (TLAC) 
requirement, as foreseen in the Financ ial Stability Board’s draft proposal on G -SIBs38. This would 
notably be the case if other senior unsecured bank debt became eligible to count as TLAC. 
                                                 
35  See Articles 4 and 14 of Regulation (EU) No 1024/2013.  
36  See Article 41(1), s ubparagraph, of Directive 2014/59/EU . 
37  See A rticle 15 of Regulation (EU) No 1024/2013.  
38  It should be noted that the TLAC proposals are still under discussion, particularly in light of the ongoing impact 
assessment.  
ECB -PUBLIC  
14 However, the ECB notes that the depositor preference does not address the fact  that other 
operational liabilities, such as derivatives, still rank pari passu to senior unsecured bank debt 
instruments. In this respect, the ECB notes that TLAC eligibility in the draft FSB proposal would 
require subordination with respect to all TLAC excluded liabilities, not onl y deposits.   
3.7.3  A common framework at Union level on the scope of the depositor preference in bank resolution and/or insolvency proceedings may help to avoid fragmentation of the market within the Union and avoid complicating the tasks of the ECB both w ith regard to monetary policy and to 
supervision within the S ingle Supervisory Mechanism
39.  
 
This opinion will be published on the ECB’s website.  
  
Done at Frankfurt am Main,  16 October  2015.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI  
                                                 
39  See paragraph 3.4 of Opinion CON/2015/31.