EN ECB-PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 14 February 2014 
on the status and supervision of credit institutions  
(CON/2014/17) 
 Introduction and legal basis 
On 3 January 2014, the European Central Bank (ECB) received a request from the Belgian Minister for 
Finance for an opinion on a draft law on the status a nd supervision of credit institutions (hereinafter the 
‘first draft law’) and a draft law on various related provisions (hereinafter the ‘second draft law’). The 
ECB has been asked to deliver its opinion within one  month so that the opinion can be taken into 
consideration before the draft law is  submitted to the Belgian Parliament. 
The ECB’s competence to deliver an  opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the third, fi fth and sixth indents of Article 2(1) of Council 
Decision 98/415/EC of 29 June 19981, since the first and second draft laws relate to the Nationale Bank 
van België/Banque Nationale  de Belgique (NBB), payment and settleme nt systems and rules applicable to 
financial institutions insofar as they materially influe nce 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. 
 1.  Purpose of the draft law 
1.1  The first draft law replaces the Law of 22 Marc h 1993 on the legal status and supervision of credit 
institutions with a new law under the same name, and introduces several important changes. Firstly, 
it implements Directive 2013/36/EU of the European Parliament and of the Council
2 into Belgian 
law and effects changes to and clarifications of Belgian law made necessary by Regulation (EU) No 575/2013 of the European Parliament and the Council
3. Secondly, the first 
draft law adapts the legal framework for the superv ision of credit institutions in the light of the 
participation of the NBB in the Single Superv isory Mechanism (SSM), governed by Council 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  Directive 2013/36/EU of the European Parliament and of th e Council of 26 June 2013 on access to the activity of credit 
institutions and the prudential supervisi on of credit institutions and investment firms (OJ L 176, 27.6.2013, p. 338).  
3  Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements 
for credit institutions and investment  firms (OJ L 176, 27.6.2013, p. 1).  
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2 Regulation (EU) No 1024/20134. Thirdly, in accordance with the Structural Reforms Report of the 
NBB5, issued pursuant to the Final Report of th e High-level Expert Group on reforming the 
structure of the EU banking sector6, the first draft law contains provisions ensuring the separation 
of the activities of credit institutions by reference to the level of risk posed to investors’ deposits. 
Anticipating the adoption of the European Commission’s Proposal for a directive on the recovery and resolution of credit institutions and investment firms
7 (hereinafter the ‘proposed BRRD’), the 
first draft law also contains comprehensive ru les on the resolution and recovery of credit 
institutions. It also takes into account the outco me of the Financial Sector Assessment Program 
(FSAP) conducted by the International Moneta ry Fund in Belgium, which recommended specific 
changes intended to ensure the overall compliance of the first draft law with the Core Principles for 
Effective Banking Supervision8. In addition to pursuing the abovementioned objectives, the first 
draft law implements the recommendations issued  by the parliamentary committees established by 
the Belgian Parliament following the financial crisis with a view to restoring investor confidence in 
the stability of the financial and banking system9.  
1.2 The main purpose of the second draft law is to am end various items of Belgian legislation that are 
directly impacted by the first draft law. In pa rticular, the second draft law amends the Organic Law 
of the NBB10 by providing for the establishment of a resolution board within the NBB, the 
disclosure of legal acts and decisions taken by the NBB in implementing Directive 2013/36/EU and 
the amendment of the procedures followed by th e NBB in imposing administrative fines. The 
second draft law also assigns to the NBB the task of identifying critical infrastructures in the 
financial sector, in accordance with Council Directive 2008/114/EC11. In this capacity, the NBB 
already monitors compliance with the Belgian rules implementing Directive 2008/114/EC, 
including the Law of 1 July 2011 on the security and protection of critical infrastructures (hereinafter the ‘Belgian law on critical infr astructures’) and may for this purpose use any 
information in its possession in the context of  its responsibilities for banking supervision and 
oversight. 
 
                                                 
4  Council Regulation (EU) No 1024/2013 of 15 October 2013 c onferring specific tasks on the European Central Bank 
concerning policies relating to the prudential supervision of  credit institutions (OJ L 287, 29.10.2013, p. 63).  
5  ‘Réformes bancaires structurelles en Belgique: rapport fi nal’, July 2013, available on the NBB website at www.nbb.be. 
6  2 October 2012, available on the European  Commission’s website at www.ec.europa.eu. 
7  Proposal for a directive of the European Parliament and of the Council establishing a fra mework for the recovery and 
resolution of credit institutions and i nvestment firms (COM(2012) 280 final).  
8  Available on the Bank for International Settlements’ website at www.bis.org.  
9  ‘Accord de Gouvernement 1 décembre 2011’, availa ble on the Belgian Prime Minister’s website at 
www.premier.fgov.be, especi ally Section 2.4.3, p. 115 and following.  
10  Law of 22 February 1998 establishing the Organic Law of the NBB. 
11  Council Directive 2008/114/EC of 8 December 2008 on the identification and designation of European critical 
infrastructures and the assessment of the need to im prove their protection (OJ L 345, 23.12.2008, p. 75).  
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3 2.  General observations 
2.1 The ECB welcomes the first draft law, which consolidates within one clear, concise and well-
structured legal act all the relevant provisions  relating to credit institutions. It implements 
Directive 2013/36/EU, reflects the participation of the NBB in the SSM and anticipates the adoption of the proposed BRRD.  
2.2 The ECB nevertheless recommends that the Belg ian authorities closely monitor any further EU 
legal developments in the areas covered by the draf t laws, including the anticipated adoption of the 
proposed BRRD and the Proposal for a regulation of  the European Parliament and of the Council 
on structural measures improving the resilience of EU credit institutions
12 (hereinafter the 
‘proposed Structural Measures Regulation’), and amend the draft laws accordingly.  
 3.  New tasks entrusted to the NBB  3.1 In line with the ‘twin peaks model’ introduced in Belgium by the Law of 2 July 2010
13 and the 
Royal Decree of 3 March 201114, the first draft law makes the NBB, which is already the sole entity 
responsible for the financial sector’s micro- and macro-prudential stability, the national authority 
responsible for implementing Directive 2013/36/EU and the SSM. In addition, the second draft law 
establishes a resolution board within the NBB. Furt hermore, the NBB will also act as the relevant 
authority for the purposes of the Belgian law on critical infrastructures. In line with its previous opinions
15, the ECB welcomes the further integration of the financial institutional framework within 
the NBB, which will enhance the ability of the N BB to ensure financial stability and prevent or 
mitigate systemic risks.  
3.2. In the interest of transpar ency, the ECB recommends that the NBB be given a more formal mandate 
in the field of banking recovery and reform, wh ich could be achieved by means of a separate 
provision in Chapter II of the Organic Law of the NBB (‘missions and opera tions’). In line with 
Article 8(a) of the proposed BRRD, such a provisio n should also limit the liability of the NBB and 
its staff in the course of carrying out the relevant tasks.   
3.3 From an operational and financial point of view , any new task allocated to an NCB should not 
affect its ability to discharge its ESCB-related t asks. Financial independence, which is an element 
of the principle of central bank independence referre d to in Article 130 of the Treaty, requires that 
an NCB must have sufficient means to carry out its national tasks as well as its ESCB- or 
Eurosystem-related tasks. Such financial indepe ndence is assessed in terms of whether any third 
party is able to exercise either direct or indi rect influence over an NCB task and whether the NCB 
                                                 
12  COM(2014) 43 final.  
13  The ECB commented on an early draft of the Law of 2 July 2010 in Opinion CON/2010/7. All ECB opinions are 
published on the ECB’s webs ite at www.ecb.europa.eu. 
14  The ECB commented on an early draft of the Roya l Decree of 3 March 2011 in Opinion CON/2011/5. 
15  Opinion CON/2013/56.  
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4 is able to fulfil its mandate, both operationally in  terms of manpower, and financially in terms of 
appropriate financial resources.  
3.4 The ECB welcomes the fact that the second draft law16 extends the existing mechanism of expense 
recovery set out in the Royal Decree of 17 July 201217 to the expenses incurred by the NBB in the 
context of Directive 2013/36/EU and the SSM. The ECB also welcomes Article 272 of the first 
draft law, which authorises the NBB to recover ‘any reasonable expenses properly incurred in 
connection with the use of the resolution tools or powers’. Such recovery may be made directly 
from the institution under resolution, or indir ectly from other institutions involved in the 
implementation of such resolution tools, and is pr otected by a statutory lien on all movable assets of 
the institution under resolution. Article 245(2) of the first draft law expressly provides that the 
valuation fees payable to experts must be ‘reas onable expenses properly incurred in connection 
with the use of the resolution tools or powers’.  However, the ECB would welcome the introduction 
of a more general provision, similar to Article 12bi s(4) of the Organic Law of the NBB relating to 
banking supervision, allowing the NBB to recoup a ll costs associated with th e exercise of this new 
mandate. 
3.5 It is noted that the new mandate of the NBB to  monitor due compliance with Belgian law on critical 
infrastructures will be exercised in respect of fina ncial institutions that are already subject to the 
supervisory powers of the NBB. In accordance with the first and second paragraphs of Article 12 of 
the Royal Decree of 17 July 2012, the expenses of the NBB incurred in the exercise of this mandate 
shall be reimbursed in full by the institutions so supervised, which means that no issue of financial 
independence will arise.  
 4.  Implementation of Directive 2013/36/EU  
 The ECB welcomes the fact that the first draft law implements the optional provisions of Directive 
2013/36/EU, in particular the systemic risk buffe r, thereby providing the NBB and ECB with the 
broadest possible range of prudential tools. The fi rst draft law also requires credit institutions to 
submit any proposed strategic decision to the comp etent supervisory authority for prior approval
18, 
and promotes the use of internal risk assessment  methods. By these means, the first draft law 
contributes to consistency in the implementation of these tools and this process across all participating Member States, thereby helping to ensu re a level playing field and lowering the risk of 
regulatory arbitrage. These aims will be further promoted by precise implementation of the transposition into and application under national law of the micro- and macro-prudential tools 
                                                 
16  See the amendments contained in the second draft law to Article 12bis, first paragraph of the Organic Law of the NBB. 
17  Royal Decree of 17 July 2012 on covering the operating expe nses of the NBB in connec tion with the supervision on 
financial institutions.           
18  Article 77 of the first draft law.  
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5 contained in Directive 2013/36/EU and the requireme nts falling under the remit of Regulation (EU) 
No 1024/201319.  
 5. Participation of the NBB in the SSM  5.1 Regulation (EU) No 1024/2013 allocates the competences and powers in respect of the macro-
prudential supervision of credit institutions between the ECB and the national competent 
authorities. The first draft law seeks to reflect, fo r the sake of transparency, the set of regulatory 
tools at the ECB’s disposal to perform its micro-  and macro-prudential competences, irrespective of 
whether such tools are extensiv ely described in Regulation (EU) No 1024/2013, and hence common 
to all participating Member States; or are those only available to the national authorities, and hence 
specific to Belgium. For this purpose, given that it is impossible at this stage to determine whether 
the national authority or the ECB is competent to  exercise certain prerogatives or take specific 
measures, the first draft law refers to ‘the superv isory authority’, defined in Article 3(4) as ‘the 
NBB or the ECB, depending on the allocation of competences provided for or stipulated in accordance with Regulation (EU) No 1024/2013 in th e field of supervision of credit institutions’. 
Transitional provisions
20 also lay down, with effect fro m 4 November 2014, a more precise 
allocation of competences between the NBB and the ECB as regards the licensing process, changes 
in the structure of the capital of credit institu tions, the withdrawal of licences and exceptional 
recovery measures.  
5.2 The ECB welcomes this legislative approach, whic h aims to provide the public with comprehensive 
information on the set of tools available to the NBB and/or the ECB, depending on the area and timing of supervision, and also welcomes the fact that this approach is appropriately documented in 
the explanatory memorandum to the first draf t law. The ECB notes that in the event of 
inconsistencies EU legislation prevails over national law.  
 6. Introduction of parts of the BRRD  6.1 The first draft law implements into Belgian la w the provisions of the proposed BRRD relating to 
recovery plans, resolution plans, resolution in struments (including the sale of business tool, the 
bridge institution tool and the asset separati on tool), as well as safeguards and procedural 
requirements.   
6.2 However, some of the provisions of the propo sed BRRD have not been implemented at this stage 
and some existing provisions in Belgian law may need to be amended once the proposed BRRD is 
adopted. The ECB trusts that the Belgian authoriti es will monitor EU legal developments in this 
regard and amend the first draft law in a timely manner.  
                                                 
19  CON/2013/82, Section 2.1. 
20  See the first draft law, Article 390 onwards.  
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6 6.3 Without prejudice to the above, the ECB notes th at in Article 245(1)(7), the application of 
resolution instruments should be without prejudice to  the equal treatment of creditors of the same 
rank, which is stricter than the corresponding Article 29(1)(e), which refers to the equal treatment 
of creditors of the same class . In order to ensure a broader application of the former provision, it 
should be aligned with the relevant  provision in the proposed BRRD.  
 7.  Separation of activities  
7.1 In line with the recommendation of the NBB in its Structural Reforms Report, the first draft law 
imposes on credit institutions that collect deposits  or issue securities governed by the Belgian 
deposit protection scheme a mandatory separation of their activities related to trading on their own 
account
21. Credit institutions must conduct own-account trading activities via a separate legal entity 
unless such activities exclusively relate to the pr ovision to clients of investment and auxiliary 
services, market-making activities, activities for the hedging of risk for credit institutions, sound 
and prudent management of the liquid assets of credit institutions and the purchase and sale of 
financial instruments acquired as long-term holdings22 and are carried out in accordance with 
certain governance, internal control and reporting requirements23 24. 
7.2 This measure, the very purpose of which is to protect the deposits, seeks to reduce the overall 
exposure of credit institutions to trading activities and encourage such institutions to focus on their 
core activities, thereby also simplifying their resolu tion in the event of financial difficulties. To this 
end, the Belgian authorities had already adjusted the financial stability contribution25 in accordance 
with the level of risk of the assets held by Belgian credit institutions26. Moreover, following a 
recommendation made in its Structural Reforms Report, the NBB had already imposed additional 
own funds requirements on credit institutions, whic h shall be amended in order to ensure its 
compatibility with Directive 2013/36/EU. The same report also urged the immediate introduction in 
Belgium of the abovementioned separation of ow n-account trading activities in the absence of any 
structural reform at EU level. However, it also recommended that such measures be reviewed in the 
event of any such structural reform at EU level27.  
7.3 The proposed Structural Measures Regulation cont ains a provision to the effect that proprietary 
trading in financial instruments and commodities be conducted through a separate legal entity. This 
provision would apply to credit institutions deemed to  be of ‘global systemic importance’ in terms 
of the significance of their total assets (more th an EUR 30 billion for three consecutive years) and 
their total trading assets and liabilities (more than EUR 70 billion or 10 per cent of their total 
                                                 
21  Article 119 of the first draft law.  
22  Article 121(1) to (5) of the first draft law.  
23  Article 122 of the first draft law.  
24  Article 128 of the first draft law.  
25  See the Law of 28 December 2011 on the financial stability contribution.  
26  See Opinion CON/2013/13. 
27  See the NBB Structural Refo rms Report, p. 17, Section 4 in fine.  
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7 assets). Proprietary trading is defined narrowly as the taking of positions for making a profit for 
own account, without any connection to client ac tivity or hedging the entity’s risk, thereby 
excluding cash management. Article 21(1) of the proposed Structural Measures Regulation provides that the Commission may grant a derogation from this prohibition to a credit institution that is subject to primary legislation adopted by  29 January 2014, provided that the Commission 
declares such legislation to be compatible with  the proposed Structural Measures Regulation. 
7.4 In view of the above, the ECB trusts that the Belgian authorities will closely monitor the evolution 
of the proposed Structural Measures Regulation an d consider whether it would be appropriate to 
immediately impose requirements on the separation of own-account trading activities on all Belgian 
credit institutions, irrespective of the thresholds  described in the proposed Structural Measures 
Regulation. As highlighted in previous ECB opinions
28, given that these measures primarily address 
internationally active credit institutions, the ECB considers coordination and consistency to be 
important at Union level, in order to avoid regulatory arbitrage and to ensure a level playing field.  
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 14 February 2014.  
[signed] 
 
The President of the ECB 
Mario DRAGHI  
                                                 
28  Opinions CON/2012/106 and CON/2013/28.