EN ECB -PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 6 August 2013  
on the special liquidation of credit institutions  
(CON/2013/57 ) 
 
Introduction and legal basis  
On 3  July 2013 the European Central Bank (ECB) received a request from the Greek Ministry of Finance 
for an opinion on draft legislative provisions on the special liquidation of credit institutions (hereinafter 
the ‘draft provisions ’). 
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 Europe an Union and the  third and  sixth indent s of Article  2(1) of Council Decision 
98/415/EC of 29  June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions1, as the draft provisions relate  to the B ank of Greece and to  rules 
applicable to financial institutions insofar as they materially influence 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 Centra l Bank, the Governing Council has adopted this opinion.  
 
1.  Purpose of the draft provisions  
1.1 The draft provisions  amend the legal framework governing the special liquidation of credit 
institutions2, in line with the commitment to improve the management  of assets in liquidation  
undertaken by  the Greek government during the second review of the Second Economic 
Adjustment Programme for Greece. To this end, the draft provisions introduce amendments to Law 
3601/2007  on the taking up and pursuit of the busine ss of credit institutions, capital adequacy of 
credit institutions and investment firms and other provisions3 and authorise the Bank of Greece to 
adopt implementing measures , as necessary.  
1.2 The draft provisions specify that the special liquidator appoin ted by the B ank of Greece  may be a 
natural or a le gal person and may liquidat e several credit institutio ns, if this proves necessary to 
better serve the purposes of the special liquidation . 
1.3 In addition , the draft provisions create an advisory  Special L iquidation Committee  (SLC)  with five 
members , who are appointed by the B ank of Greece for a three -year term of office . The special 
liquidator is required to request the SLC’s consent to c arry out specific  liquidation tas ks, namely  
                                                 
1  OJ L 189, 3.7.1998, p.  42. 
2  The special l iquidation framework contains the relevant provisions of Law  3601/2007 on the taking up and pursuit of the 
business of credit institutions, capital adequacy of credit institutions and invest ment firms and other provisions , the 
relevant provisions of the Law on b ankruptcy (Law 3588/2007) and the relevant acts of the Bank of Greece’s Credit and 
Insurance Committee No 21/4.11.2011 and No 77/30.5.2013.  
3  FEK A 178/1.8.2007 . 
ECB -PUBLIC  
2 settlement of claims  and debt restructuring  as well as sales of immovable property and debt 
instruments , where the amount of the claim or the value of the asset concerned  exceed s certain 
thresholds.  
1.4 Finally , the draft provisions: (a) specify the Bank of Greece’s scope of super vision o ver the special 
liquidator; (b) limit the special liquidator’s and the SLC’s liability for debts incurred by the credit 
institution under liquidation with regard to the time period prior to their appointment (c) specify the 
means of notification  for certain cases in special liquidation  proceedings . 
 
2. Appropriate time to consult the ECB  
2.1 According to Article 4 of Decision 98/415/EC, the ECB must be consulted at an appropriate stage 
in the legislative process , which gives the ECB sufficient time to adopt its opinion  and also enables 
the consulting authority to take the ECB’s opinion into consideration before the draft provisions are 
adopted.  In th is case, the ECB was consulted at a point in the legislative process that did not give 
the consulting authority  enough time to introduce  substantive amendments to t he draft provisions. 
Furthermore, the Greek Parliament adopted the draft provisions shortly  after the submission of the 
request for  the ECB’s opinion.  
2.2 The ECB understands that the framework for the special liquidation of credit institutions in Greece 
is evolving , particular ly due to the  framework’s relevance for restructuring the Greek banking 
sector. Therefore, the ECB considers that th is opinion , despite being  publi shed following  adoption 
of the draft provisions,  can serve as guidance f or future  amendments to th is framework. However , 
the ECB stresses that even cases of particular urgency do not relieve national authorities of their 
duty to consult the ECB at an appropriate stage in the legis lative process and to allow sufficient 
time to take into account its views in accordance with Decision 98/415/EC.  
 
3. General observations  
3.1 The ECB welcomes the draft provisions to the extent that they seek to amend the current 
framework on the special liquidation of credit institutions in line with the financial sector 
objectives outlined by the Greek authorities in the Memorandum of Economic and Financial 
Policies4. In relation to the development of the a bovementioned framework , the ECB refers to its 
previous relevant opinion s5. 
3.2 The ECB understands that the main purpose  of the draft provisions  is to ensure timely and cost-
effective dispos al of and/or restructur ing of  assets in liquidation  and to  also take advantage of  
synergies by centralising the  administration of assets . Given  the high financial stakes involved in 
the liquidation of credit institutions, the ECB notes  that establish ing sound , efficient and orderly 
liquidation procedures based on  international practices  is essential. Therefore,  the E CB considers  
                                                 
4  Annex V to Law No 4046/2012 on the approval of the draft financing agreements betwee n the European Financial 
Stability Fund, the Hellenic Republic and the Bank of Greece and of the draft Memorandum of Understanding between 
the Hellenic Republic, the European Commission and the Bank of Greece and other provisions of utmost importance for 
reducing the public debt and saving the national economy (FEK A 28/14.12.2012) . 
5  See, in particular, Opinion CON/2011/72. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.  
ECB -PUBLIC  
3 that further developing  the Greek legal and supervisory framework governing the special 
liquidation of credit institutions is an important step towards  increas ing the  protect ion o f the value 
of assets in liquidation and , ultimately , of credito rs’ interests . Furthermore, w hen significant public  
sector claims are involved in the special liquidation  procedure , a well -designed  framework  is 
necessary in order to minimise  taxpayer exposure to costs.  
3.3 The ECB notes that proper and swift implementat ion of the envisaged framework by the special 
liquidator , the SLC and other competent authorities  is of crucial importance for achiev ing the 
abovementioned objectives . Proper implementation of the envisaged framework involves, 
inter  alia, ensuring complian ce with the principles of legal certainty, transparency and 
predictability regarding the treatment of creditors, as well as with the principle of equal treatment 
of creditors.  
 
4. Interaction of the draft provisions with other provisions  of the special liq uidation framework  
The ECB notes that the inter action  between the draft provisions , the Law on b ankruptcy6 and 
secondary legislation governing the special liquidation of credit institutions7 should be clear and 
ensure that the framework as a whole is consi stent, comprehensive and, thus, enforceable. The ECB 
recommends that the interaction between these provisions be clarified, e.g. in an explanatory note 
to the draft provisions.  
 
5. Development  of the  framework to support and oversee the special liquidator  
5.1 The ECB welcomes that the draft provisions develop  the framework to support and  oversee the 
special liquidator  appointed by the B ank of Greece . The re is merit in appoint ing the same special 
liquidator for more than one credit institution under liquidat ion. At the same time, the ECB stresses 
that the draft provisions should include safeguards to avoid conflicts of interests , to ensure that 
control over the special liquidator is neither  arbitrary nor excessive  and to specify that this 
appointment for mult iple credit institutions should be based on specific  objective  criteria, such as 
the siz e of the institutions  concerned . Furthermore, the ECB understands that, under  the draft 
provisions , allowing the special liquidator to carry out  liquidation of several entities  does not affect  
the insolvency  estate of each entity and that  each respective procedure remain s separate.  
5.2 It would be beneficial to  provide more detailed guidance to the special liquidator and the SLC for 
the performance of their tasks in the draft provisions. The special liquidator and the SLC should be 
support ed by specialised and impartial advisers when assess ing the value of assets  under 
liquidation, e.g. by provi ding non-binding evaluation s from  independent evaluato rs. As regards  the 
thres holds  that trigger the SLC’s involvement , the ECB stresses the need for their adequate 
justification , taking into consideration the inherent aim of maximising t he proceeds of the 
liquidation.  
                                                 
6  Law 3588/2007, FEK A 153/10.7.2007.  
7  Acts of the Bank of Greece’s Credit and Insurance Committee No 21/4.11.2011 and No 77/30.5.2013 . 
ECB -PUBLIC  
4 5.3 It would be useful to further specify the scope of the contr ol exercised over the special liquidator . 
In line  with its previous opinions, t he ECB welcomes the B ank of Greece  playing the central role in 
the special liquidation  procedure , as a means to reinforce the financial stability framework8. At the 
same time, i t is equally crucial to ensure clarity and legal certainty as regards the procedure for 
judicial review of the decisions  made by  the special liquidator and the SLC. 
 
6. The SLC  and B ank of Greece ’s role  
6.1 The ECB welcomes the creation of the SLC as a mea ns to reinforc e the framework to oversee the 
special liquidation of credit institutions  and to enhance  the smooth and efficient conduct  of the 
special liquidation  procedure . At the same time , in order to enable the SLC to fulfil its role in a 
satisfactory manner,  the draft provisions should ensure that there is no ambiguity in the SLC’s 
status, role and powers under Greek law . 
6.2 The ECB recommends  that the draft provisions clarify whether the SLC is considered  an internal  
body of the B ank of Greece  or whe ther it has the same status as the special liquidator.  This is also 
relevant with respect to who should be held accountable for SLC decisions. The Greek legislator 
should set up an appropriate accountability framework.  
 
7. Relationship between the Bank of Greece and the SLC  
The draft provisions provide that the Bank of Greece is to provide secretarial support to the SLC, 
decide on the  qualifications and the selection criteria for SLC members, and nominate and 
remunerate SLC members. The ECB understands that  these rights and obligations relate to the 
Bank of Greece’s mandate in the special liquidation process for credit institutions, which is already 
controlled by the Bank of Greece, i.e. opening of the liquidation process, appointment of the 
special liquidat or, and control of the liquidator’s activities. In this regard, the draft provisions do 
not breach the monetary financing prohibition which prevents central bank financing of the public 
sector. At the sam e time, the draft provisions should clarify that the  SLC’s tasks are related to the 
Bank of Greece’s competences in the process of special liquidation of credit institutions.  
 
8. Independence  
The ECB has consistently noted that the principle of central bank independence requires Member 
States to ensure that  NCBs have sufficient financial resources to perform their Eurosystem -related 
tasks as well as their own national tasks. In this respect,  any remuneration paid to the SLC 
members by the Bank of Greece should be determined in a manner that is fully compatib le with the 
Bank of Greece’s institutional and financial independence.  
 
                                                 
8  See in particular Opinions CON/2004/9 and CON/2004/18.  
ECB -PUBLIC  
5 This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 6 August 2013.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI