EN ECB-PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 12 May 2017  
on judicial relief granted to holders of qualified bank credit 
(CON/2017/16)  
Introduction and legal basis 
On 15 March 2017 the European Central Bank (ECB) received a request from the Slovenian Ministry of 
Finance for an opinion on a draft Act on judicial relief granted to holders of qualified bank credit 
(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 third indent of Article 2(1) of Council Decision 98/415/EC1 as 
the draft law relates to a national central bank. 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 main objective of the draft law is to re medy the unconstitutionality, as declared by the 
Slovenian Constitutional Court, of certain provisions of the Slovenian Banking Act (hereinafter the ‘ZBan-1’)
2 governing Banka Slovenije’s liability for damages with respect to extraordinary measures 
imposed by Banka Slovenije. ZBan-1 authorised Banka Slovenije to adopt extraordinary measures to write-down or convert qualified liabilities during the reorganisation of banks that failed, or were 
likely to fail, to meet the minimum requirements for capital and liquidity to an extent that would 
justify the withdrawal of their banking authorisation.  
1.2 While the Constitutional Court confirmed that the legal basis for the extraordinary measures 
imposed in 2013 and 2014 by Banka Slovenije in respect of the write-down of subordinated instruments was in accordance with the Constitution of the Republic of Slovenia, it nevertheless 
declared the provisions of Article 350.a of the ZBan-1 to be unconstitutional. This conclusion was based on the Constitutional Court’s finding that exer cising judicial relief under Article 350.a of the 
ZBan-1 did not afford effective judicial protection to stakeholders affected by Banka Slovenije’s 
extraordinary measures. The Constitutional Court decided that the legislator must remedy the unconstitutionality within six months of the public ation of the Constitutional Court’s decision, and 
                                                 
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 Banking Act (Zakon o ban čništvu), Official Gazette of the Republic of Slovenia no 131/06. 
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2 provided the legislator with further guidance on how best to ensure more effective judicial 
protection. 
1.3 Shareholders and creditors affected by Banka Slovenije’s extraordinary measures are eligible to 
seek compensation under the draft law, provided that the measures resulted in a less favourable treatment of their qualified liabilities compared to insolvency or regular liquidation proceedings
3 
initiated on the day the extraordinary measures were imposed (the ‘no creditor worse off 
principle’)4. 
1.4 Compensation for damages incurred as a result of  the extraordinary measures must be paid either 
by Banka Slovenije or the State. If no liability can be attributed to Banka Slovenije, compensation 
must be paid by the State. In particular, Banka Slovenije will be partially or wholly exempt from 
liability if it can demonstrate that it acted with due professional care when adopting the 
extraordinary measures and had, in the light of the facts and circumstances available at the time 
the extraordinary measures were adopted, reasonable grounds to believe that the statutory 
conditions for taking the extraordinary measures were fulfilled. If Banka Slovenije is only partially exempt from liability, then Banka Slovenije must pay damages to former holders of qualified 
liabilities, whereas financial resources for any co mpensation exceeding Banka Slovenije’s liability 
must be provided by the State within three months of the publication of the court’s decision in the 
Slovenian Official Journal.  
1.5 Any claim for compensation must be filed against Banka Slovenije and the Republic of Slovenia 
within six months of the draft law entering into force. Such claims may be filed by applicants 
holding more than 10 % of the respective bank’s share capital or having a claim of more than EUR 100 000 against the respective bank. The draft law codifies special procedural rules of judicial 
redress for the holders of qualified liabilities, which deviate from the general rules of civil proceedings and, inter alia,  enable legal proceedings affecting similarly-placed litigants to be joined 
together to achieve a joint and uniform assessment of claims regarding a specific bank that was subject to Banka Slovenije’s extraordinary measures. 
1.6 When determining whether a claimant has a right to compensation, the court must establish 
whether extraordinary measures relating to qualifie d liabilities were adopted by Banka Slovenije in 
accordance with the conditions laid down in the ZBan-1. The court must, inter alia,  verify whether 
the complex assessment of the conditions necessary for imposing extraordinary measures, as laid 
down in Article 253.a of the ZBan-1, including the respective bank’s asset quality review (AQR), 
was correctly carried out or not. The main aspects  that the court will verify are whether: (1) the 
methods and the assumptions underlying the methods used in the complex assessment of the 
                                                 
3  Such proceedings may be applied if the bank’s assets are sufficient to repay all its creditors. 
4  According to the no creditor worse off (NCWO) principle no creditor or shareholder should incur greater losses than 
they would have incurred if the institution had been wound up under normal insolvency proceedings. The NCWO 
principle is defined under Article 34/1(g) of Directive 2014/59/EU 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 (OJ L 173, 12.6.2014, p. 190).  
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3 conditions for imposing extraordinary measures and in the AQR were consistent with Union rules 
on State aid and the banking supervision standards adopted by the ECB, the European Commission and the European Banking Authorit y (EBA); (2) the method and the assumptions 
underlying such methods were applied improperly and whether this affected the outcome of the assessment; (3) there are reasonable grounds to suspect that either the original data was not used 
in the assessment or that the individual responsible for appraising the bank’s assets did not act 
independently; and (4) there is reasonable doubt conc erning the professional skills of the entity that 
performed the valuation of the bank’s assets.  
1.7 In the event of a dispute regarding the fulfilment of the conditions for the extraordinary measures, 
the burden of proof lies with Banka Slovenije. For complex questions requiring specialist 
knowledge the court may, either in addition to, or instead  of, an expert appointed in accordance 
with the rules of civil proceedings, appoint a special committee of experts composed of three to five 
members selected through a public tender procedure, which will act as an advisory body to the 
court. The European Commission, the ECB and the EBA  will be informed of the public tender 
procedure by the court.  
1.8 The draft law lays down rules for a two-stage disclosure of documents and information in relation to 
any decision on extraordinary measures adopted by Banka Slovenije. These rules state that Banka 
Slovenije must publish on its website: (1) any decision imposing an extraordinary measure, (2) the 
valuation of assets for each bank in respect of which an extraordinary measure was taken, (3) the 
AQR report for each bank in respect of which an extraordinary measure was taken and (4) any documents revealing a contractual relationship between Banka Slovenije and the appraiser of the bank’s assets. All personal and confidential information must be redacted in advance of any 
publication on Banka Slovenije’s website. Furthermore , the applicants may file a motion to the court 
to oblige Banka Slovenije (and certain other entities, such the State, the Court of Audit, the 
Securities Market Agency and the bank affected by the extraordinary measure) to provide documents to the court without redacting personal or confidential information, whereby the court 
must limit any disclosure of evidence to that which is proportionate and must ensure the adoption 
of effective measures to protect such information5, for example by excluding the public from the 
court’s proceedings, limiting the review to certain entities, and similar measures. 
1.9 If the court determines that former holders of qual ified liabilities have a right to be compensated, its 
decision will be published in the Official Journal and will have an erga omnes  effect, meaning that 
the decision will impact all former stakeholders affected by Banka Slovenije’s extraordinary measures, regardless of whether they filed a claim to recover  damages or not. The decision 
granting the right to compensation to former holders of qualified liabilities will be general in nature 
and will indicate how qualified liabilities should be treated and determine the extent of Banka 
                                                 
5  The draft law’s provisions on access to information are derived from Article 5 of Directive 2014/104/EU of the 
European Parliament and of the Council of 26 November 2014 on certain rules governing actions for damages under 
national law for infringements of the competition law provisions of the Member States and of the European Union (OJ L 349, 5.12.2014, p.1). 
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4 Slovenije’s liability. Thus, the court will not i ssue separate decisions awarding compensation to 
each individual stakeholder. Instead, the draft law provides a standardised formula for calculating compensation to be paid by Banka Slovenije based on a written request from former holders of 
qualified liabilities. The request may be submitted 15 days after the publication of the court’s decision in the Slovenian Official Journal. The same  applies if the Republic of Slovenia is liable to 
pay the compensation, in which case the compensation will be paid by the Ministry of Finance. The 
right to seek payment on the basis of the court’s decision is limited in time and expires five years 
from the date of publication of the final court decision granting the right to compensation to former 
holders of qualified liabilities.  
 
2. Observations 2.1 The draft law must comply with Article 123 of the Treaty, which prohibits overdraft facilities and any 
other type of credit facility with the national centra l banks of Member States in favour of the public 
sector, including central governments or other public authorities. Article 1(1)(b)(ii) of Council Regulation (EC) No 3603/93
6 defines ‘other type of credit facility’, inter alia , as ‘any financing of the 
public sector’s obligations vis-à-vis third parties’. Consequently, a requirement that Banka Slovenije must pay the compensation for damages, to the extent that it results in Banka Slovenije assuming 
the liability of the State
7, would not be in line with the monetary financing prohibition laid down in 
Article 123 of the Treaty.8 Even if Banka Slovenije were to be reimbursed by the State within three 
months of the publication of the court’s decision for any amounts paid as compensation, the 
financing of the State’s obligation during this period wo uld qualify as an ‘other type of credit facility’ 
granted by Banka Slovenije to the State, and as such would violate the monetary financing 
prohibition. Therefore, the draft law should be amended to ensure that Banka Slovenije does not 
assume any liability of the State, including, in particular, in cases where both Banka Slovenije and 
the State are severally liable. Banka Slovenije sh ould only be liable in respect of its individual 
responsibility.  
2.2 In order to provide effective judicial protection to the holders of qualified liabilities by allowing them 
to examine any relevant facts before bringing a claim to court, it is appreciated that there is a 
requirement to disclose documents that formed the basis for Banka Slovenije’s decision on 
extraordinary measures.  
2.3 Article 14(4), point 5 of the ZBan-29, stipulates that if it is specifically required by law, Banka 
Slovenije must disclose confidential information to the public. However, such national legislation should fully respect the provisions of Directive 2013/36/EU of the European Parliament and of the 
                                                 
6  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). 
7 See Article 4 of the draft law. 
8  See for example paragraph 3.2.3 of Opinion CON/2010/33 and paragraph 4.2(d) of Opinion CON/2008/16, all ECB 
opinions are available on the ECB’s website at www.ecb.europa.eu  . 
9  Banking Act ( Zakon o ban čništvu ), Official Gazette of the Republic of Slovenia, no. 25/15, 44/16 and 77/16.  
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5 Council10 as regards professional secrecy. In this context the ECB notes that, notwithstanding the 
requirement under the draft law to redact personal and confidential information prior to any disclosure of information on Banka Slovenije’s website, the asset valuations and AQR reports 
relating to individual supervised entities (banks) are to be regarded as confidential information. In addition, these documents may contain confidenti al information pertaining to each bank’s 
customers or other counterparties, which have been obtained by Banka Slovenije from the banks 
and external service providers through the exercise of its supervisory powers
11. Public disclosure of 
such documents would thus inevitably contravene the principle set out in Article 53 of Directive 
2013/36/EU12, according to which all persons working for competent supervisory authorities must 
be bound by the obligation of professional secrecy.  Confidential information which such persons 
receive in the course of their duties may be disclosed only in summary or aggregate form, thus individual credit institutions may not be identified, without prejudice to cases covered by criminal 
law. 
2.4 In order to establish a framework which safeguards both confidential information and the legitimate 
interest of investors affected by Banka Slovenije’s extraordinary measures, the ECB recommends 
that an alternative approach should be considered, which would comply with the principles set out 
in Article 53 and Article 54 of Directive 2013/36/ EU. In order to ensure the adequate protection of 
confidential supervisory information and to safeguard the principles set out in Article 53 of Directive 
2013/36/EU, the disclosure of the asset valuations and AQR reports should be limited only to the 
shareholders or creditors who were directly affected by the extraordinary measures taken by Banka 
Slovenije and therefore have a legitimate legal interest as defined by the Constitutional Court of the 
Republic of Slovenia.  
2.5 Regarding the draft law’s requirement to verify that the methods and assumptions used to assess 
whether the extraordinary measures and the results of the AQR were consistent with the standards 
of banking supervision adopted by  the ECB, the European Commission and the EBA, it is noted 
that in order to provide legal certainty the draft law should specify in more detail the relevant legal 
sources (e.g. legal acts and best supervisory practices) relevant in this context. 
2.6 The ECB takes note that, pursuant to the dr aft law, the European Commission, the ECB and the 
EBA will be informed by the court of the public tender procedure for the appointment of a special 
committee of experts to act as an advisory body to the court for complex questions requiring specialist knowledge. On the understanding that the scope of the judicial review, and therefore the 
review by the special committee of experts, would be limited to explain facts, and taking account of the above-mentioned suggestion that the draft law should specify in more detail the relevant legal 
sources to be considered when assessing whether the extraordinary measures and the results of 
                                                 
10  Directive 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 credi t 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). 
11  On the basis of Articles 53 of Directive 2013/36/EU and Article 14 of ZBan-2, Banka Slovenije is obliged to treat all 
information regarding supervised entities that was acquired in the course of its supervisory duties as confidential. 
12  See footnote 11. 
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6 the AQR were consistent with the banking supervision standards of the ECB, European 
Commission and EBA, the ECB stands ready, at its discretion, to cooperate with the court, taking 
account of the principle of sincere cooperation between the Union and the Member States pursuant 
to Article 4(3) of the Treaty on European Union and the co-operation between the institutions of the Union and the responsible authorities of the Member  States pursuant to Article 18 of Protocol (No 
7) on the privileges and immunities of the European Union. 
 
This opinion will be published on the ECB’s website.  
  
Done at Frankfurt am Main, 12 May 2017. 
 [signed]  
 The President of the ECB 
Mario DRAGHI