EN 
 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 17 October 2008 
at the request of the Greek Ministry of Economy and Finance  
on a draft law on, inter alia, the establishment of the ‘Depositors and Investors of Credit 
Institutions Compensation Fund’ 
(CON/2008/51) 
 Introduction and legal basis
 
On 24 September 2008 the European Central Bank (ECB) received a request from the Greek Ministry of 
Economy and Finance for an opinion on a draft law on, inter alia , the establishment of the ‘Depositors 
and Investors of Credit Ins titutions Compensation Fund’1 (hereinafter the ‘draft law’). On 
10 October 2008 the ECB received a related consulta tion request from the Ministry on a draft provision 
raising the coverage limit of the present deposit pr otection scheme in Greece (hereinafter, the ‘draft 
amendment on the amount of guaranteed deposits’), whic h is to be adopted separately from the draft law2 
and which stems from the decisions taken at the Ecofin Council meeting held in Luxembourg on 
7 October 2008 to address the current turmoil in the fi nancial sector. This opinion covers both the draft 
law and the draft amendment on the amount of guaranteed deposits.   
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community and the third and sixth indents of 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 provisions3, as the draft law relates to the Bank of Gr eece and to rules applicable to financial 
institutions insofar as they materially influence th e 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  The full title of the draft law is as follows: ‘Law on the Depositors and Invest ors of Credit Institutions Compensation 
Fund, the Athens Stock Exchange Members Guarantee Fund, the Dematerialised Securities Sy stem and other provisions’. 
2  The draft amendment on the amount of guaranteed deposits was submitted to the Greek Parliament on 9 October 2008 as 
an amendment-addendum to a draft law on the protection of borrowers which had already been submitted to Parliament 
at this point.   
3  OJ L 189, 3.7.1998, p. 42. 
2 1.  Purpose of the draft law 
1.1 The part of the draft law relating to compensa tion schemes is intended to achieve the following 
objectives: (i) replace the provisions of Law 2832/20004 currently governing deposit guarantees; 
and (ii) codify the arrangements on deposit gua rantees and investor compensation schemes in cases 
of insolvency of credit institutions, with the view  to establishing a set of coherent, efficient and 
transparent compensation arrangements, enhancing confidence in the financial system and in the 
capital market. These objectives are to be  achieved by the following means: 
(i) Institutional consolidation of Greek compensation schemes with regard to credit institutions . 
This will be achieved by establishing a single en tity under the name of the ‘Depositors and 
Investors of Credit Institutions Compensation Fu nd’ (hereinafter the ‘Fund’) which will be 
the compensation scheme for both depos its and covered investment services5 provided by 
credit institutions to their clients6. The Fund will replace the current ‘Hellenic Deposit 
Guarantee Fund’7 (HDGF) which has only guaranteed compensation payments to depositors 
with credit institutions, while other entities that  provide investment services and are already 
members of the Athens Stock Exchange Members Guarantee Fund (ASEMGF) under Law 2533/1997
8 will continue to be covered by the ASEMGF. In line with the extension of 
the Fund’s scope to cater for investor protec tion vis-à-vis credit institutions, the draft law 
provides for two separate dedicated branch es within the Fund, which would secure 
compensation payments for depositors and for investors, as the case may be. Moreover, the 
draft law introduces specific arrangements as regards the scope of the Fund’s coverage as well as its financing and governance, as referred to in paragraphs 2 to 4 of this opinion. 
(ii) Enhancement of the Bank of Greece’s superviso ry functions relating to the operation of the 
Fund 
This arrangement, based on the supervisory f unction performed by the Bank of Greece in 
relation to the banking sector in Greece, will include measures such as: (i) the Bank of 
                                                 
4  Law 2832/2000 on the codification of the provisions on the establishment, organisation and operation of the deposit 
scheme and supplementing the Statute of the Bank of Gr eece (FEK Vol. A 141, 13.6.2000) codified and supplemented 
the provisions of Law 2324/1995 (FEK Vol. Α 146, 17.7.1955) which, inter alia, transposed Directive 94/19/EC of the 
European Parliament and of the Counc il of 30 May 1994 on deposit-guarantee  schemes, OJ L 135, 31.5.1994, p. 5. 
5  ‘Covered investment services’ include  those listed in Article 4(1)(a) to (d ), (f) and (g) of Law 3606/2007 on financial 
instrument markets and ot her provisions (FEK Vol. Α 195, 17.8.2007) and the ancillary service referred to in 
Article 4(2)(a) of the same law. 
6  According to the explanatory memorandum to the draft law, the proposal for combined coverage of deposits and 
investment services provided by credit institutions has been put forward by the Bank of Greece, the Hellenic Bank 
Association and the HDGF itself, as an ar rangement which has also been adopted by  other EU legislators (e.g. Austria, 
Luxembourg, the Netherlands and Sweden). 
7  The HDGF, established under Article 2 of Law 2832/2000, is a legal person governed by private law and supervised by 
the Minister for Economy and Finance.  
8  Law 2533/1997 on the stock exchange derivates market and other provisions (FEK Vol. Α 228, 11.11.1997) established 
the ASEMGF as a legal person governed by private law and supervised by the Hellenic Capital Market Committee. Its 
provisions replaced those of Legislative Decree No 3078 of 11 October 1954 establishing the ASEMGF’s predecessor 
fund, by restructuring and renaming it in order to bette r meet the needs of investment protection and ensure 
harmonisation with Directive 97/9/EC of the European Pa rliament and of the Council of 3 March 1997 on investor-
compensation schemes (OJ L 84, 26.3.1997, p. 22). 
3 Greece’s power to decide on the equivalence of coverage of Greek branches of credit 
institutions having their registered office out side the EU under the respective home country 
scheme; (ii) closer cooperation between th e Bank of Greece and the EU supervisory 
authority concerned in the event of non-complia nce by a Greek branch of a credit institution 
with a registered office in a Member State; and (iii) enhanced representation of the Bank of 
Greece on the Fund’s Board. 
1.2 Moreover, under the draft amendment on the amount of guaranteed deposits, the deposit guarantee 
will increase from EUR 20 000 to EUR 100 000, with  the rates for calculating credit institutions’ 
contributions to the deposit-guara ntee scheme being adjusted accordi ngly. This arrangement will be 
valid until 31 December 2011 and may be extended by a decision of the Minister for Economy and Finance  
 2. General observations 
2.1 The ECB welcomes the consolidation of compensat ion schemes for both deposits and investment 
services provided by credit institutions in Greece,  as it will increase operational efficiency and 
enhance the confidence of credit institutions’ client s in the scheme responsible for compensation in 
case of insolvency. However, it is noted that a ccording to the draft law’s final and transitional 
provisions, credit institutions that, at the time of entry into force of the draft law, are already 
members of the ASEMGF will continue as such and will have no obligation to join the Investors’ 
Cover Branch (ICB). This means that some credit institutions will not join the ICB of the Fund. 
The ECB notes that to ensure a leve l playing field, all credit institu tions should be subject to the 
same regime as regards the calculation of contri butions payable to the compensation scheme.  
2.2 Moreover, the ECB welcomes the draft amendm ent on the amount of guaranteed deposits 
increasing the guaranteed amount for deposits to EUR 100 000 in accordance with the conclusions 
of the Ecofin Council held on 7 October 2008
9. This proposed measure should facilitate prevention 
of the financial turmoil’s impact on the real economy in Greece, while improving the stability of 
the banking system and protecting the deposits of individuals.   
 3. Financing of the Fund   
3.1 The initial capital of the Fund will be taken over from the HDGF, to which the Fund is the 
universal successor, and which has had its capital covered as to 60 % by the Bank of Greece and as 
to 40 % by those credit institutions which are members of the Hellenic Bank Association
10. The 
Fund’s assets will be grouped in two distinct branches, namely the Depositors’ Cover Branch 
                                                 
9  The Council (Ecofin) agreed in its 7 October meeting that ‘all Member States would, for an initial period of at least one 
year, provide deposit guarantee protection for individuals for an amount of at  least EUR 50 000, acknowledging that 
many Member States determine to rais e their minimum protected amount to EUR 100 000’. See the press release of the 
2894th Council meeting (13784/08), av ailable on the Council’s we bsite, www.consilium.europa.eu. 
10  See Article 2(5) of the draft law. 
4 (DCB) and the ICB and will be exclusively dedicat ed to serving their respective purposes, i.e. 
compensation payments to depositors and investors concerned11.The Fund’s operating costs 
relating to the DCB and the ICB will be determined  on an annual basis by a decision of the Board. 
Specifically, the costs incurred by the ICB will be allocated to each partic ipating credit institution 
in proportion to the value of its participation12. 
3.2 Article 4 of the draft law lists the DCB’s resources13 and Article 4(4) specifies the amount of a 
credit institution’s regular annual contribution and the details of its calculation on the basis of 
scales. By decision of the Fund’s Board, the contribution calculated will be adjusted, from 
1 January 2009 onwards, using a coefficient rangi ng from 0.90 to 1.10, according to the ranking 
which, solely for the purposes of the application of the draft law’s provisions establishing the Fund, 
will be attributed to the credit institution con cerned by a decision of the Bank of Greece. The 
ranking will take into account the criteria of capital adequacy, liquidity and adequacy of internal 
audit systems, as reflected in Law 3601/2 007 implementing Directives 2006/48/EC and 
2006/49/EC14. In this respect the ECB welcomes the pr inciple of risk-based premiums, which will 
align the calculation of a credit institution’s c ontributions to the Fund to its risk profile. 
 4. Governance of the Fund  
4.1 Article 23 of the draft law introduces certain ch anges to the current regime, namely it proposes an 
increase to the number of members of the Fund’s  Board from seven to nine. The Board will 
continue to be chaired by one of the Deputy G overnors of the Bank of Greece, the other members 
coming from the Ministry of Economy and Finance (one member), the Bank of Greece (three members as opposed to two under the current re gime), the Hellenic Bank Association (three 
members) and the Association of Cooperative Ba nks of Greece (one member). It also introduces 
the possibility to renew the Board’s five-year mandate more than once and enables the Board 
Chairman to delegate representation of the Fund befo re any authority or third party, judicially and 
extra-judicially to another Board member, the Director or another officer of the Fund. The ECB 
                                                 
11  In accordance with Article 2(6) of the draft law, the Fund’ s DCB assets are clearly distinct from its ICB assets, as 
specified in the draft law. Moreover, in accordance with Articl e 4(10) of the draft law, contributions to the DCB’s initial 
capital and any other form of contribution made by a credit institution to the DCB do not c onstitute assets of the credit 
institution and may not be refunded. To contrast, Article 5(2) stipulates that ICB assets constitute a ‘group of assets’ 
managed by the Fund, the individual compone nts of which shall be jointly owned by  the participating credit institutions 
in proportion to their participation therein. Consistently, Arti cle 8 specifies that in the ev ent that a credit institution 
withdraws from the ICB, for any legal reason, its individual sh are’s value, as assessed at the time of withdrawal, will be 
refunded to it in cash. 
12  See Article 24(4) of the draft law. 
13  These include the following: (i) initial and annual regular co ntributions of credit institutions participating in the DCB; 
(ii) an additional contribution levied in the event that D CB resources are insufficient to cover compensation payments; 
(iii) donations; and (iv) revenue deriving from liquidation of  claims and management of DCB assets. Similarly, ICB 
resources are listed in Article 6 of the draft law.  
14  Directives 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 institutions (recast) (OJ L 177, 30.6.2006, p. 1) and 2006/49/EC on the capital adequacy 
of investment firms and credit institutions (recast) (O J L 177, 30.6.2006, p. 201), implemented by Law 3601/2007 on the 
taking up and pursuit of the business of credit institutions, on capital adequacy of credit institutions and investment firms 
and other provisions (FEK Vol A 178/1.8.2007). 
5 further notes that the draft law, as referred to in paragraph 1.1(ii) above, transfers certain 
supervisory powers previously entrusted to the HDGF15 to the Bank of Greece. The ECB welcomes 
these proposed amendments to the extent that they  maintain a significant level of central bank 
involvement. 
4.2 As a general point, the ECB repeats its earlier ob servation that central banks are in general in the 
best position to take on responsibility for financia l stability, given their insight into money and 
financial market developments and their involve ment in payment systems and monetary policy 
operations16. At the same time, as deposit-guarantee schemes in particular are a key element of the 
financial safety net, the governance framework shoul d ensure that the important function of such 
schemes is carried out professionally and efficiently17. Moreover, effective coordination with the 
overall role of central banks in safeguarding financ ial stability should be ensured. This aim may be 
achieved, inter alia, through maintaining an adequa te level of involvement of the central bank in 
the governance and regulation of natio nal deposit-guarantee schemes.  
 5. Concluding remarks  
For reasons of consistency and to ensure clarity and legal certainty, the ECB recommends that the two 
sets of provisions, namely the draft law and the dr aft amendment on the amount of guaranteed deposits, 
should be properly aligned. In pa rticular, as the latter amends Law 2 832/2000 and will be adopted prior to 
the draft law, which in turn will replace Law 2832/2000 itself, the draft law should be amended to reflect 
the exceptional nature and, thus, the limited life of  the draft amendment on the amount of guaranteed 
deposits, for example by including a transitional provision or by any other means that the Greek legislator considers appropriate.  
 This opinion will be published on the ECB’s website.  
Done at Frankfurt am Main, 17 October 2008. 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
15  See Article 3(4) and Article 22(2) of the draft law. 
16  See e.g. paragraph 7 of ECB Opinion CON/2001/10 of 25 May 20 01 at the request of the Austrian Ministry of Finance on 
a draft Federal law establishing and organising the financial ma rket supervisory authority. 
17  See Financial Stability Forum, ‘Guidance for Devel oping Effective Deposit Insuran ce Systems’, September 2001, 
point V.1(c) (‘Basic governance arrange ments’), p. 19. According to these recommendations, the governing body of a 
deposit-guarantee scheme should include individuals with the requisite knowledge  to allow them to understand the 
environment in which the scheme operates.