EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 27 August 2013 
on the macro-prudential mandate of the Banco de Portugal 
(CON/2013/66) 
 
Introduction and legal basis 
On 17 July 2013, the European Central Bank (ECB) received a request from the Portuguese Minister of 
State and for Finance for an opinion on two draft decree-laws, one amending the Organic Law of the 
Banco de Portugal (hereinafter the ‘draft decree -law on the BdP’) and the other amending Decree-Law 
No 228/2000 of 23 September 2000 that established the National Council of Financial Supervisors 
(NCFS) (hereinafter the ‘draft decree-law on the NCFS’) (hereinafter collectively the ‘draft decree-laws’). 
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 and sixth indents 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 decree-laws relate to the Banco de Portugal (BdP) and 
to rules applicable to financial institutions insofar as  they materially influence the stability of financial 
institutions and markets. In accordance with the first sen tence 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 decree-laws 
1.1 The draft decree-law on the BdP amends the Organic Law of the Banco de Portugal
2 in order to, 
inter alia : (a) provide for the BdP’s participation in the Single Supervisory Mechanism; 
(b) expressly state the banking resolution respons ibilities that the Legal Framework of Credit 
Institutions and Financial Companies already conferred on the BdP3; and (c) nominate the BdP as 
the competent authority to implement macro-pruden tial policy. In particular, the draft decree-law 
implements Recommendation ESRB/2011/3 of the Eur opean Systemic Risk Board of 22 December 
2011 on the macro-prudential ma ndate of national authorities4. 
1.2 The draft decree-law on the NCFS amends D ecree-Law 228/2000 of 23 September 2000 in order 
to, inter alia , expressly give the NCFS advisory functions to the BdP, and in the exercise of these 
                                                 
1  OJ L 189, 3.7.1998, p. 42. 
2  Law No 5/98 of 31 January 1998. 
3. Decree-Law No. 298/92 of 31 December 1992, as amended. 
4  OJ C 41, 14.2.2012, p. 1. See also recital 24 of Regulation (EU) No 1092/2010 of  the European Parliament and of the 
Council of 24 November 2010 on European Union macro-prudentia l oversight of the financia l system and establishing a 
European Systemic Risk Boar d (OJ L 331, 15.12.2010, p. 1). 
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2 functions, to: (a) identify, monitor and evaluate ri sks to the stability of the financial system and 
(b) assess concrete proposals of macro-prudential po licy aimed at mitigating or reducing systemic 
risks, in order to strengthen the stability of the financial sector. The main purpose of the draft 
decree-law on the NCFS is to implement Recommendation ESRB/2011/3. 
 2. Macro-prudential mandate of the Banco de Portugal 2.1 The ECB supports the effective design of macr o-prudential policy framewo rks within the Member 
States, in line with the guiding principles expressed in Recommendation ESRB/2011/3. Moreover, the ECB considers that the ECB and national centr al banks should play a leading role in macro-
prudential oversight, given their expertise and current responsibilities in the area of financial 
stability
5. 
2.2 In the light of the above, the ECB welcomes the arrangement whereby the BdP is the national 
authority responsible for the c onduct of macro-prudential policies6, with the NCFS serving as 
advisor, thus acting in cooperation with other aut horities whose actions have a material impact on 
financial stability, in particular the Portuguese Securities Market Commission and the Insurance 
and Pension Funds Supervisory Authority. 
3.4 At the same time, the ECB notes that the BdP s hould perform its macro-prudential tasks in such a 
way to not affect: (a) the BdP’s institutional, functional and financial independence; or (b) the 
performance by the European System of Central Ba nks of its tasks under the Treaty and the Statute 
of the European System of Central Banks and of the European Central Bank7. 
2.4 While acknowledging the limited scope of the draft decree-law on the BdP, the ECB recommends 
that either the draft-decree law on the BdP or ot her relevant legal acts should expressly mandate the 
BdP, in its capacity as a macro-prudential authority,  to cooperate with the European Systemic Risk 
Board (ESRB) and, where needed, with the macro- prudential authorities of other Member States, in 
particular as regards the exchange of information8. 
2.5 The ECB notes the absence, in the draft decree- law on the BdP, of a specific provision regarding 
the implementation of Recommendation D4 of  Recommendation ESRB/2011/3, which calls for 
legal protection of the macro-prudential authorities and their staff when acting in good faith in the 
context of its macro-prudential mandate. This lega l protection should either be provided for in the 
                                                 
5  See paragraph 5.1 of Opinion CON/2012/44, paragraph 3.1 of Opinion CON/2012/55, paragraph 2.1 of Opinion 
CON/2013/30 and paragraph 2.1 of Opin ion CON/2013/45. All ECB opinions are published on the ECB’s website at 
www.ecb.europa.eu. 
6  See Article 12(c) and (d) of draft decree-law on the Orga nic Law and Article 2(1) of draft decree-law on the NCFS. 
7  See paragraph 3.2 of Opinion CON/2012/55, paragraph 2.3 of Opinion CON/2013/30 and paragraph 2.2 of Opinion 
CON/2013/45. 
8  See paragraph 5.3 of Opinion CON/2012/44, paragraph 4.1 of Opinion CON/2012/55 and paragraph 2.3 of Opinion 
CON/2013/30. Recommendation B4 of Recommendation ESRB/ 2011/3 also proposes mandating the macro-prudential 
authority for cross-border cooperation and information exchan ge, in particular by informing the ESRB of the actions 
taken to address systemic risks at national level. 
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3 draft decree-law  on the BdP or, if it is already contained in other laws9, the ECB recommends that 
clarification be provided on how these laws s hould apply to macro-pr udential supervision. 
2.6 The ECB welcomes the specific provisions of the draft decree-law on the BdP which, when read in 
conjunction with existing provisions10, state the BdP´s independence with regard to macro-
prudential policy decisions. 
2.7 This opinion does not prejudice the conclusi ons of the follow-up assessment of the above 
mentioned recommendations that the ESRB will issu e in accordance with Article 17 of Regulation 
(EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union macro-prudential oversight of the financial system and establishing a European Systemic Risk Board
11. 
 3.  Extension of NCFS functions 3.1 The ECB welcomes the extension of the NCFS func tions which, in line with the implementation of 
Recommendation B2 of Recommendation ESRB/2011/3
12, will include coordinating between the 
financial system supervisory authorities when they  regulate and supervise their respective financial 
entities. 
3.2 The ECB also welcomes that the BdP, in its ro le as the national authority defining and carrying out 
macro-prudential policy for the national financia l system, will benefit from the NCFS’s advice, 
i.e. in identifying, monitoring and assessing risks to the stability of the financial system, as well as 
from the NCFS’s macro-prudential policy proposals th at are specifically aimed at mitigating or 
reducing systemic risks, in order to reinforce the stability of the financial system13. 
  4.  Other issues 4.1 The ECB welcomes the specific provisions intende d to safeguard the BdP´s participation in the 
Single Supervisory Mechanism
14 and notes the redrafting of the provisions referring to the 
designation of the BdP as the national resolution au thority, which now include specific references 
                                                 
9  See Article 12(3) of the Legal Framework of Credit Institu tions and Financial Companies. The same reservations were 
raised in paragraph 2.6 of Opinion CON/2013/45.  
10  See Article 16A of draft decree-law on the BdP and Artic le 27(2) of the Organic Law of the Banco de Portugal. 
Recommendation B3 of Recommendation ESRB/2011/3 suggests th at Member States ensure the central bank plays a 
leading role in the macro-prudential po licy and that macro-prud ential policy does not unde rmine its independence in 
accordance with Article 130 of the Treaty. Recommendation E1 of that same Recommendation advises that the macro-
prudential authority, in the pursuit of its  objective, should be as a minimum operati onally independent, in particular from 
political bodies and from the financial industry, and Recomme ndation E2 proposes that organisational and financial 
arrangements do not jeopardise the conduct of macro-prudential policy. 
11  OJ L 331, 15.12.2010, p. 1. 
12  According to Recommendation B2 of Recommendation ESRB/2011/3,  if a single institution is designated as the macro- 
prudential authority, Member States should establish mechanisms  for cooperation among all au thorities whose actions 
have a material impact on financial stability, without prejudice to their respective mandates.  
13  See Article 2(1) and (3) of draft decree-law on the NCFS. 
14  See Article 17(2) of draft decree-law on the BdP. 
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4 to the tasks of drawing up resolution plans, applying resolution measures, and arranging for the 
removal of potential obstacles to the application of such measures15. 
4.2 The ECB noted in its Convergence Reports16 that financing by an NCB granted independently and 
at its full discretion to credit institutions would be incompatible with the monetary financing 
prohibition if it would be granted other than in  connection with central banking tasks (such as 
monetary policy, payment systems or temporary liquidity support operations), in particular the support of insolvent credit and/or other financial institutions. To this end, the ECB advised that 
inserting references to Article 123 of the Treaty s hould be considered. Ac knowledging that Article 
12(c) of the Organic Law of the Banco de Portuga l currently in force already expressly safeguards 
«the requirements derived from its participation in the ESCB»  when entrusting on BdP the task to 
«provide for the stability of the national financial system, performing for the purpose, in particular, 
the function of lender of last resort», the ECB would recommend inserting a reference to 
Article 123 of the Treaty in order to avoid an y possible incompatibility with the monetary 
financing prohibition.   
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 27 August 2013. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI 
                                                 
15  See Article 17_A of draft decree-law on the BdP. 
16. See pp. 29-30 .