EN ECB-PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 13 February 2012 
on the management of liquidity in the Treasury accounts at the Banca d’Italia and the selection of 
counterparties for related operations 
(CON/2012/9) 
 
Introduction and legal basis  
On 7 November 2011, the ECB received a consultati on request from the Italian Ministry of Economic 
Affairs and Finance on a Ministerial Decree concerni ng the use of liquidity in the payment account and 
similar accounts held by the Treasury at the Banca d’ Italia, as well as for the selection of counterparties 
eligible for related operations1 (hereinafter the ‘Ministerial Decree’). The Ministerial Decree was adopted 
on 25 October 2011. 
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/EC of 
29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions2, as the draft legislation concerns the Ba nca d’Italia. 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 Ministerial Decree 
1.1 The Ministerial Decree regulates the system fo r managing liquidity held by the Treasury in 
accounts at the Banca d’Italia and selecting count erparties for this purpose. The liquidity is 
managed through lending or borrowing on the mone y market and by recourse to other financial 
market operations. In addition, the Ministerial Decr ee allows the Ministry to place liquidity into 
fixed term deposits with the Banc a d’Italia, pursuant to the Agreement between the Ministry and 
the Banca d’Italia of 22 March 2011 for the manage ment of the payment account for receipts and 
disbursements and similar accounts held by the Treasury at the Banca d’Italia
3 (hereinafter the 
‘Agreement’), without prejudice to the possibilit y of terminating any of the abovementioned 
operations. The Ministerial Decree also defines whic h counterparties are eligible for operations and 
the procedures the Banca d’Italia is to follow wh en carrying out these operations on behalf of the 
Treasury. It allows the Banca d’Italia to re quire counterparty compliance with technical 
                                                 
1  Ministerial Decree of 25 October 2011 ( Gazzetta Ufficiale No 254, 31.10.2011). 
2  OJ L 189, 3.7.1998, p. 42.  
3  Some of the provisions contained in the Agreement ar e further specified in non-public technical protocols. 
ECB-PUBLIC  
2 agreements, sets out rules for the management of credit risk in lending opera tions and refers to a 
separate decree in relation to the fra mework applicable to collateral. 
1.2 The Ministerial Decree implements the second sente nce of Article 5(5) of the Law on consolidation 
of legislative provisions and regulations on public debt4, as amended by Article 47(1) of Law 
No 196/20095. According to the Ministerial Decree, the procedure for liquidity management and 
selecting counterparties is to be established by a separate Ministerial decree on detailed rules on the 
operations, based on transparency, efficiency and competitiveness, and in accordance with an 
agreement between the Ministry and the Banca d’Italia. 
 2. General observations  2.1 The obligation to consult the ECB 
The Ministerial Decree is part of a single broader framework of acts aimed at implementing the 
legislative provisions set out in Article 47 of Law No 196/2009. The Ministry adopted two Ministerial Decrees
6 for the execution of the Agreement, the first regulating accounting methods 
and criteria concerning transactions connected to the Treasury accounts at the Banca d’Italia7 and 
the second containing detailed rules on operations for managing liquidity held by the Treasury in its 
accounts at the Banca d’Italia8. In addition, a Ministerial decree was adopted on planning related to 
public administration financial needs in the cont ext of managing the Treasury accounts at the Banca 
d’Italia9. The ECB was not consulted on any of these acts.  As a result, the ECB is not in a position 
to give a full assessment of the Ministerial Decree.  
2.2 The appropriate time to consult the ECB   
The consultation request on the Ministerial Decr ee was received by the ECB after it was adopted10. 
The ECB stresses that even in cases of extreme ur gency national authorities are not relieved from 
their duty to consult the ECB and to allow suffici ent time to take its views into account as laid 
down in Articles 127(4) and 282(5) of the Treaty. The second sentence of Article 4 of Decision 98/415/EC provides that the ECB must be  consulted ‘at an appropriate stage’ in the 
legislative process. This implies that the consulta tion should take place at a point in the legislative 
                                                 
4  Presidential Decree No 398 of 30 December 2003 ( Gazzetta Ufficiale No 57, 9.3.2004, Supplemento ordinario No 37 ). 
5  Law No 196 of 31 December 2009 ( Gazzetta Ufficiale  No 303, 31.12.2009, Supplemento ordinario No 245).  
6  Ministerial Decree of 29 July 2011 ( Gazzetta Ufficiale No 190, 19.8.2011) and Ministeria l Decree of 29 September 2011 
(Gazzetta Ufficiale No 231, 4.10.2011).  
7  Ministerial Decree of 11 November 2011 ( Gazzetta Ufficiale No 276, 26.11.2011), implemen ting Article 47(5) of Law 
No 196/2009. 
8  Ministerial Decree of 28 November 2011 ( Gazzetta Ufficiale No 279, 30.11.2011), implementing Article 6(2) of the 
Ministerial Decree, on which the ECB has adopted this Opinion. 
9  Ministerial Decree of 13 July 2011 ( Gazzetta Ufficiale No 178, 2.8.2011), implementing Article 47(5) of Law 
No 196/2009. 
10  It should also be noted that the consultation request sent  by the Italian authorities did not set any time limit and 
announced the adoption of further decrees on the same matt er. As underlined in several ECB Opinions, Article 3 of 
Council Decision 98/415/EC specifies that consulting author ities may set a time limit for the submission of an ECB 
opinion, but this time limit may not be le ss than one month, unless a shorter time limit is justified w ith reasons for the 
extreme urgency.  
ECB-PUBLIC  
3 process that affords the ECB suffici ent time to examine the draft legislative provisions and to adopt 
its opinion in all required language  versions, and also enables the relevant national authorities to 
take the ECB’s opinion into account before the pr ovisions are adopted. Article 3(4) of Decision 
98/415/EC obliges Member States to suspend the process of adoption of draft legislative provisions pending receipt of the ECB’s opinion. On this occasion, the Ministry failed to comply with the consultation obligation pursuant to Council Decision 98/415/EC. 
 3. Prohibition of monetary financing  The Ministerial Decree establishes the procedure to be used by the Banca d’Italia when managing the 
liquidity held by the Treasury on its accounts at the Banca d’Italia. It specifies that management 
operations do not give rise to fees or commissions payable by the Ministry
11. Moreover, the Banca d’Italia 
is to manage the operation of credit lines and guarantees, although there is no specific mention of 
remuneration of the Banca d’Italia by the Ministry in the Ministerial Decree.  
Taking into account the express recognition in Article 21.2 of the Statute of the European System of 
Central Banks and of the European Central Bank of the provision of fiscal agency services as a legitimate function traditionally performed by cen tral banks, the ECB notes that provision by central banks of fiscal 
agency services
12 complies with the monetary financing prohi bition, provided that such services remain 
within the scope of the fiscal agency function and do not constitute central bank financing of public sector 
obligations vis-à-vis third parties13 or central bank crediting of the public sector outside the narrowly 
defined exceptions specified in Regulation (EC) No 3603/9314. The ECB considers that the provision 
without remuneration by the Banca d’Italia of fiscal  agent services under the Ministerial Decree does not 
raise monetary financing concerns, provided they are core fiscal agent services. 
 4. Monetary policy implementation In Opinion CON/2009/69, the ECB highlighted that Government deposits held with the Eurosystem 
reduce the amount of liquidity available to the euro  area banking sector. Therefore, the deposits have to 
be forecasted when calibrating the ECB’s open mark et operations, and the precision of the forecasts 
provided by the national central banks of the Member States whose currency is the euro to the ECB is, to 
                                                 
11  See Article 3(2) of the Ministerial Decree. 
12  See the ECB’s Convergence Report of May 2010, p. 25, sta ting that ‘The purpose of Article 21.2 of the Statute is, 
following transfer of the monetary policy competence to the Euro system, to enable NCBs to continue to provide the fiscal 
agent service traditionally provided by central banks to governments and other public entities without automatically 
breaching the monetary financing prohibition.’ See also, e. g., Opinion CON/2009/23. All ECB opinions are published on 
the ECB’s website at www.ecb.europa.eu. 
13  i.e. one of the prohibited forms of mone tary financing; see Article 1(1)(b)(ii) of 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). See the ECB’s C onvergence Report of May 2008, p. 233, which states with 
reference to the provision by Česká národní banka of administrative and fina ncial support to the Financial Arbitrator, an 
administrative body entirely independent from the central bank,  ‘constitutes a form of central bank financing of the public 
sector’s obligations’. 
14  See Article 4 (non-extendable intra-day credits), Article 5 (crediting, under specified conditions, the public sector’s 
account with cheques issued by third parties) and Article 6 (holding, within specified limits, coins issued by and credited 
to the public sector) of Re gulation (EC) No 3603/93.  
ECB-PUBLIC  
4 a large extent, dependant on the procedures for managi ng government deposits. In this context, the ECB 
welcomed the introduction of the provision, la ter confirmed by Article 47 of Law No 196/2009, 
stipulating that deposits in excess of a threshold ag reed between the Ministry and the Banca d’Italia, 
would no longer be remunerated. Th is measure was expected to provide  an incentive for the Ministry to 
transfer funds in excess of the threshold to the ba nking sector, and thus reduce forecasting errors in the 
liquidity management transactions procedures.  
As noted in paragraph 2.1, the Ministerial Decree is part of a wider framework, thus it is an insufficient 
basis for assessing whether the measures to be implemented for managing government deposits will reduce forecasting errors and improve the overall sch eme for the management of government deposits as 
outlined above. In particular, pursuant to Article 2(4)  of the Ministerial Decree, the detailed rules have 
been laid down in specific non-public protocols betw een the Ministry and the Banca d’Italia, and in a 
separate Ministerial decree
15, on which the ECB was not consulted. Since the details contained in the 
technical decree are outside the scope of the present consultation, the ECB is unable to conclusively 
assess future government deposit procedures in Italy. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 13 February 2012. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI 
 
                                                 
15  Ministerial Decree of 28 November 2011.