EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 24 January 2012 
on measures for the stabilisation of the financial market 
(CON/2012/2) 
 
Introduction and legal basis  
On 23 December 2011, the European Central Bank (ECB) received a request from the German Federal 
Ministry of Finance for an opinion on a Second draft law implementing a package of measures for the stabilisation of the financial market (hereinafter the ‘draft law’). 
The ECB’s competence to deliver an  opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the sixth indent  of Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions
1, as the draft law relates to rules applicable  to financial institutions insofar as they 
materially influence the stability of financial ins titutions 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. 
 1.  Purpose of the draft law 
1.1 The draft law is based on the Law of 17 Oc tober 2008 on financial market stabilisation
2 and its 
extensions on, inter alia , nationalisation of credit in stitutions and bad banks schemes3; some of the 
provisions have subsequently been phased out.  
1.2 The recent government debt crisis in several c ountries has impaired confidence in the financial 
markets and led to refinancing problems. Moreove r, the high interconnectedness in the European 
Union financial system has led to a rapidly risi ng risk of significant contagion, potentially 
threatening the financial stability of the Union as a whole and adversely impacting the real economy in Europe and beyond
4. In the Communiqué of Finance Ministers and Central Bank 
Governors of the G-20 of 22 September 20115, a commitment was expressed to take all necessary 
actions to preserve the stability of banking syst ems and financial markets and restore confidence. 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  [2008] Bundesgesetzblatt I p. 1982, as amended. 
3  The ECB provided its opinion on the underlying legal act in Opinion CON/2008/57 and on extensions in Opinions 
CON/2009/24, CON/2009/54 and CON/2010/ 83. All ECB opinions are published on the ECB’s website at 
www.ecb.europa.eu. 
4  See also the European System Risk Board’ s (ESRB) press release of 21 September 2011. 
5  Available on the G-20’s website at www.g20.org.  
ECB-PUBLIC  
2 The current legal  framework enables banks under stress to be recovered in an orderly procedure or 
resolved. Furthermore, for the banking supervisor to  transfer systemically relevant parts of a bank 
to another private bank or temporarily to a state owne d bridge bank, there needs to be a threat to the 
existence of the bank affecting financial stability.  
1.3 Pursuant to the draft law, several measures provided for under the Law on the financial market 
stabilisation fund may be temporarily reintroduced to counter a possible threat to the financial system in a timely and efficient manner, if priv ate law solutions for strengthening the capital base 
fail. The draft law enables new applications for stabilisation measures, using the instruments which 
expired in late 2010, subject to State aid clearance. These measures will apply until 
31 December 2012. The SPV model, i.e. the assu mption of guarantees for securities outsourced to 
special purpose vehicles (SPVs), is extended to  cover also securities other than structured 
securities. Under the draft law, €400 billion will be  available for funding guarantees for liabilities 
with a maturity of up to five years (or seven fo r covered bonds), and €70 billion (plus € 10 billion 
subject to approval by the German Parliament ary Budget Committee) for credit empowerments. 
Furthermore, the conditions related to the use of stabilisation measures are improved. 
1.4 The German Federal Financial Supervisory Aut hority (BaFin) may order an institution to increase 
its own funds in order to prevent an imminent th reat to the orderly functioning of the financial 
markets or to avoid a threat to financial market stability. BaFin may do so, in particular, in case of 
an ESRB recommendation, related decisions or recommendations of the European Council or 
coordinated action by the European Supervisory Author ities, i.e. not only wher e there is a threat to 
an individual institution. This power is tempor ary and will expire on 31 December 2012. BaFin 
may also request an institution to submit a plan  on how it intends to meet the increased capital 
requirements. If such plan touches upon the compet ence of the Financial Market Stabilisation Fund 
(hereinafter the ‘Fund’), BaFin will assess the pl an in agreement with the Financial Market 
Stabilisation Authority’s steering committee. BaFin may ask for an improved version of the plan. In that context, the institution also  needs to assess the possibility of applying for stabilisation measures 
if there are no alternative measures at hand. If the plan fails, BaFin can appoint a special 
representative to develop a capital measures plan  and ensure its implementation. If necessary, 
BaFin may use its other instruments to ensure  the institution's compliance with the capital 
requirements.  
1.5 Additionally, the draft law inter alia: (a) cl arifies the legal framework applying to the Fund, 
providing that governing committee members are appoint ed on the basis of a public law contract; 
(b) strengthens legal and expert supervision by the Ministry of Finance over the Financial Market 
Stabilisation Authority; and (c) amends certain  provisions of the Law on financial market 
stabilisation acceleration
6 and the Financial Market Stabilisation Fund Order7 to facilitate their 
application. 
                                                 
6  [2008] Bundesgesetzblatt  I p. 1982, 1986, as amended. 
7  [2008] Bundesanzeiger  No 123 p. 1, as amended. 
ECB-PUBLIC  
3 2. General observations  
2.1 In line with its previous opinions8, the ECB emphasises that when a dopting measures to deal with 
the financial crisis, Member States should act in a coordinated manner. In this respect, the ECB 
welcomes that the draft law proposes a requirement to observe, inter alia , decisions of the 
European Council and the Council of the Europ ean Union, recommendations of the European 
Banking Authority and requirements of the European Commission, in particular with regard to compatibility with Articles 107 and 108 of the Treaty
9.  
2.2. Concerning Commission requirements in the context of Articles 107 and 108 of the Treaty, the 
ECB understands that the pricing terms and cond itions for the stabilisation measures provided for 
in the draft law10 will respect the guidelines and conditions set at Union level11. In this respect, the 
ECB understands that in accordance with the Law on financial market stabilisation12, all 
stabilisation measures, including recapitalisation m easures will be subject to the Union framework, 
although this is not explicitly mentioned in the provision regarding recapitalisation in the Financial 
Market Stabilisation Fund Order13. 
 3. Increased capital requirements 3.1 The ECB notes that the draft law
14 allows BaFin to require an inst itution to meet increased capital 
requirements for a limited period of time, to avert an imminent disruption of  the functioning of the 
financial market or a risk to financial market stability.  
3.2 With respect to the capital requirements and in order to prese rve financial stability within the 
Union, the ECB strongly supports the development of a single European rulebook for all financial 
institutions, as put forward by th e Commission in its recent proposals15. Nonetheless, the ECB also 
supports that national authorities adjust certain  prudential requirements and impose stricter 
prudential requirements for macro-prudential purposes at national level to address financial stability 
concerns stemming from the structural features of a national financial system or systemic risks in a comprehensive and effective manner. 
                                                 
8  Opinions CON/2008/57, CON/2009/ 24, CON/2009/54 and CON/2010/83. 
9  Article 1 no. 5 of the draft law, amending Section 4(1) no  5 of the Law on the financial market stabilisation fund. 
10  See the amendment to Section 4(1) of the Law on the fi nancial market stabilisation fund. 
11  See notably the ‘Communication from the Commission on the a pplication, from 1 January 20 12, of State aid rules to 
support measures in favour of banks in the context of the financial crisis’ (OJ C 356, 6.12.2011, p.7). 
12  Section 4(1) of the Law on the financial market stabilisation fund. 
13  See Section 3(2) of the Financial Mark et Stabilisation Fund Order, relating to recapitalisation, which unlike the amended 
Section 2(2) of the Financial Market Stabilisation Fund Order, relating to guarantees, does not contain an explicit 
reference to the Union framework.  
14  Article 2(1) of the draft law, amendi ng Section 10(1b) of the Law on Banking. 
15  See, for example, the proposals of 20 July 2011 for a Dir ective of the European Parliament and of the Council on the 
access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms and 
amending Directive 2002/87/EC of the Euro pean Parliament and of the Council on the supplementary supervision of 
credit institutions, insurance undertakings and investment fi rms in a financial conglomerate (COM (2011) 453 final) and 
for a Regulation on prudential requirements for credit institutions a nd investment firms(COM(2011) 452 final). 
ECB-PUBLIC  
4 3.3 With a view to maintaining transparency and en suring the consistency of measures adopted within 
the Union, the ECB recommends that the possible application of more stringent requirements by 
national authorities be subject to safeguards. In th is respect, the ECB welcomes that the draft law 
acknowledges the importance of a coordinated proce dure at Union level to strengthen confidence in 
the resilience of the European banking sector and avert an imminent risk to financial market 
stability in Europe. The ECB understands that this reference to coordination is meant to require ex 
ante coordination at Union level, which the ECB su pports. Furthermore, the ECB appreciates that 
the draft law explicitly clarifies that BaFin will take into account the standards agreed upon by the competent European authorities, when it decid es on the amount and the composition of the capital 
required. 
 4. Qualifying holdings In view of the general obligati on imposed under Directive 2006/48/EC
16 for any natural or legal person to 
notify the competent authorities of a decision to acquire a qualifying holding, the ECB understands that this obligation would also apply to the Fund and would recommend amending the draft law accordingly
17.  
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 24 January 2012. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI 
                                                 
16  Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and pursuit 
of the business of credit institu tions (OJ L 177, 30.6.2006, p. 1).  
17  See Article 2c of the Law on banking.