EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 28 May 2019 
on judicial relief granted to former holders of qualified bank credit  
(CON/201 9/20) 
 
Introduction and legal basis  
On 12  April 2019  the European Central Bank (ECB) received a request from the Vice -President of the 
Slovenian National Assembly  for an opinion on a draft law on judicial relief granted to  former  holders of 
qualified bank credit  (hereinafter the ‘ draft law ’) prepared by the National Council of the Republic of 
Slovenia . 
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  indent s of Article 2(1) of Council Decision 
98/415/EC1 as the draft law relates to Banka Slovenije,  rules applicable to financial institutions insofar as 
they materially influence the stability of financial institutions and markets  and the tasks conferred upon the 
ECB pursuant to Article 127(6) of the Treaty . 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 remedy the unconstitutionality , as declared by the 
Constitutional Court  of the Republic of Slovenia ( hereinafter the ‘Constitutional Court’)  in Decision 
No U -I-295/13- 260 of 19 October 2016 (hereinafter the ‘Constitutional Court’s Decision ’)2, of 
certain provisions of the Law on banking (hereinafter the ‘ZBan- 1’)3 governing Banka Slovenije ’s 
liability for damages with respect to extraordinary measures imposed by Banka Slovenije. The 
provisions  assessed by the Constitutional Court4 authori sed Banka Slovenije to adopt extraordinary 
measures to write -down or conver t qualified liabilities during the reorgani sation of a bank  that failed 
or was likely to fail , to meet  minimum requirements for capital and liquidity , to an extent that could 
result in the withdrawal of their  banking authorisation .  
                                                 
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         Odločba o ugotovitvi, da je bil 350.a člen Zakona o bančništvu v neskladju z Ustavo, Odločba o ugotovitvi, da je bil  
265. člen Zakona o reševanju in prisilnem prenehanju bank v neskladju z Ustavo, Odločba o ugotovitvi , da členi 253, 
253a, 253b, 261a, 261b, 261c, 261d, 261e, drugi odstavek 262.b člena, ter členi 346, 347 in 350 Zakona o 
bančništvu nisi bili v neskladju z Ustavo, Odločba o ugotovitvi, da 41. člen Zakona o spremembah in dopolnitvah 
Zakona o bančništvu ni bil v neskladju z Ustavo, Uradni list Republike Slovenije št. 71/16.  
3 Zakon o bančništvu, Uradni list Republike Slovenije št.  131/06.  
4  Articles 253, 253.a, 253.b,260.a, 260.b, 261.b, 261.c, 261.d, 261.e, 262.a, 262.b(2), 346, 347, 350 and 350.a of 
ZBan -1.  
ECB -PUBLIC  
2 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 line with the C onstitution  of the Republic of Slovenia5, it held that  the provisions 
of Article 350.a of the ZBan -1 providing for judicial relief to be unconstitutional. This conclusion was 
based on the Constitutional  Court’s finding that exercising judicial relief under Article 350.a of the 
ZBan -1 did not afford effective judicial protection to former holders of qualified bank credit  affected 
by Banka Slovenije’s extraordinary measures. The Constitutional Court decided that the legislator 
must remedy the unconstitutionality within six months  of the publication of the Constitutional 
Court’s decision and provided the legislator  with further guidance on how best  to ensure more 
effective judicial protection.   
1.3 The main purpose of the draft law is to remedy the unconstitutionality of the judicial relief afforded 
to former holders of qualified bank credit affected by Banka Slovenije ’s extraordinary measures , as 
declared by the Constitutional Court.  
1.4 The draft law codifies special procedural  rules of judicial redress for the former  holders of qualified 
bank credit, which deviate from the general rules and, inter alia, enable legal proceedings against a 
particular decision on extraordinary measures  to be reviewed in a “sample procedure” , meaning 
that the court reviews one claim, while other procedures are put on hold and a decision is then 
applied to other claims. Any action for compensation may be filed at the latest within twelve  months 
from the entry into force of the draft law.   
1.5 The draft law regulates those proceedings in which the former  holders of qualified bank credit are 
seeking judicial protection under civil law on the bas is of Article 350.a of the ZBan -1.  
1.6 Article 350.a of the ZBan -1 stipulates that shareholder s, creditors, and other persons whose rights 
are affected due to the effects of an order by Banka Slovenije on  an extraordinary measure may 
claim damages from Banka Slovenije in accordance with Article 223.a of the ZBan -1, if they prove 
that the loss that has arisen due to the effects of the extraordinary measure is higher than it would 
have been had the extraordi nary measure not been adopted.  Article 223.a of the ZBan- 1 stated  
that Banka Slovenije and all of the persons acting on its behalf should be acting with the diligence 
of a good expert when exercising thei r supervisory functions.  As confir med by the Constitutional 
Court , the liability  of Banka Slovenije under  Article 350.a of  the ZBan -1 is a sui generis  liability 
(specially determined liability)6.  
1.7 The draft law refers  to the provisions of the ZBan- 1 for the criteria  by which  the court establish es 
whether a claimant has a right to compensation. It provides guidelines for  the court on how to 
establish a right to compensation. When determining whether a claimant  has a right to 
compensation, the court should primarily establish  whether extraordinary measures relating to 
qualified liabilities were adopted by the Banka Slovenije in accordance with,  and subject to the 
fulfillment of , the conditions laid down in the ZBan- 17. The court should , verify whether (a) the 
                                                 
5  Ustava Republike Slovenije, Uradni list Republike Slovenije št. 33/91- I. 
6  See paragraph 120 of the Constitutional Court’s Decision.  
7        Article 253.a(1) and Articles 261.a to 261.d ZBan- 1. 
ECB -PUBLIC  
3 assessment of  the fulfillment of the conditions for adoption of extraordinary measures was 
incorrect, (b) the obligations were not treated in line with the provisions of the ZBan- 1, and (c) the 
assessment was not in line with the International Financial Reporting Standards ( hereinafter the 
‘IFRS ’)8 and the relevant legislation applicable at th at time.  
1.8 To determine whether the conditions laid down in the ZBan- 19 were accurately assessed , the main 
aspects that the court should verify, are whether : (a) the method and the premise underlying the 
method used in the assessment  were  in breach of the relevant  provisions  of the ZBan -1 applicable 
at that time,  Law on companies10 or Law on measures to s trengthen the s tability of b anks11; (b) the 
methods and premise underlying the methods  used in the assessment were in breach of the IFRS 
or other  legislation  applicable at that time; (c) the method of obtaining the data used in the 
preparation of the assessment gives rise to a reasonable doubt as to whether correct source data 
were used and whether this affected the assessment; ( d) the data used in the assessm ent was 
used incorrectly and whether this affected the assessment, and ( e) there is reasonable doubt 
concerning the professionalism of the person who performed the valuation of the assets of the 
bank that was used for the assessment to such an extent that it would be an unsuitable basis for a 
decis ion12.  
1.9 To determine whether th e valuation of liabilities was performed in line with the provisions of the 
ZBan -1 applicable at that time13, the main aspects that the court should verify  are whether: ( a) the 
method and the premise underlying the method used in the assessment , to an extent that 
impacted the assessment, were in breach of the  provisions of the ZBan -1 applicable at that time, 
Law on Companies , Law on m easures  to strengthen the s tability of b anks , the IFRS and other 
relevant legislation  applicable at that time ; (b) the methods and premise underlying the methods  
used in the assessment were used wrongly or in breach of the relevant legislation applicable at that 
time; (c) the method of obtaining the data used in the preparation of the assessment gives rise to a 
reasonable doubt as to whether original  source data were used and whether this affected the 
assessment; (d) the data used in the assessment was used incorrectly and whether this affected 
the assessment , and (e) the assessment of the premise and capital requirements, which were the 
basis for the preparation of the assessment, were in breach of the IFRS or the relevant legislation , 
as applicable at that time14.  
                                                 
8   Available on the IFRS  Foundation’s website at www.ifrs.org.  
9        The conditions laid down in Article 253.a of ZBan- 1 are as follows: (a ) an increase in risk is prevailing in relation to 
the bank;  (b) there are no circumstances indicated showing that the reasons for this increased risk are likely to be 
eliminated within an appropriate time, (c ) it is not likely that Banka Slovenije could take other measures on the basis 
of this act for the bank to achieve short -term and long- term capital adequacy or to achieve an appropriate liquidity 
position within an appropriate time; and (d ) extraordinary measures are in the public interest to prevent a threat to 
the st ability of the financial system.  
10        Zakon o gospodarskih družbah, Uradni list Republike Slovenije št. 65/09.  
11  Zakon o ukrepih Republike Slovenije za krepitev stabilnosti bank , Uradni list Republike Slovenije št. 105/12.  
12   See Article 9(2) of the draft law.  
13      Pursuant to Article 261.b of ZBan- 1 the assessment of a bank’s assets is based on the following: i ) the amount of the 
repayment of qualified liabilities from the bank’s assets is based on the presumption of a non-going concern bank  ii) 
the issue value of shares to be issued for the increase of the bank’s initial capital through the conversion of the 
qualified liabilities is based on the presumption of a going concern bank .  
14   See Article 9(3) of the draft law.  
ECB -PUBLIC  
4 1.10 If the court establishes that the conditions for the imposition of extraordinary measures were not 
fulfilled or that qualified liabilities were not treated correctly , the court would have to establish what 
would have been the most likely treatment of quali fied liabilities  had they been treated correctly or 
had no extraordinary measures been imposed, and the difference in value of qualified liabilities in 
such a case in comparison with their actual treatment.  
1.11 Thereby, the damages are set as the difference between the actual and most likely treatment of the 
qualified liabilities15. The basis for damages to be calculated by the court will include the amount of 
unpaid principal in qualified liabilities that had a due date,  or the book value of qualified liabilities  
without a due date,  and the prescribed interest rate16.  
1.12 The draft law regulates claims for damages filed against Banka Slovenije pursuant to the relevant 
provisions of the ZBan -1 by the former holders of qualified liabilities, who were worse off due to the 
adoption of the extraordinary measures . According to the explanatory memorandum17, any  
compensation will be paid solely by Banka Slovenije. The draft law also provides for the Republic 
of Slovenia,  in its role as a former holder of qualified liabilities , to make a claim against Banka 
Slovenije through the State Attorney’s office.  
1.13 The draft law also lays down rules for the disclosure of documents and information in relation to 
any decision on extraor dinary measures adopted by  Banka Slovenije. Banka Slovenije must 
establish a virtual data room for each bank in respect of which an extraordinary measure was 
adopted and disclose to the former holders of qualified liabilities and their advisers in full , in the 
original language as well as in Slovene,  documents which were considered by Banka Slovenije in 
the adoption of the extraordinary measures. In particular , the following documentation must be 
disclosed: (a) the decision on extraordinary measures with  all appendices and documents 
referenced in the decision, (b) the assessment of the relevant bank’s assets, (c ) all asset quality 
review ( AQR ) and stress tests, (d) the contract between the evaluator and Banka Slovenije and/or 
the relevant bank , (e) all documentation dealing with the Slovene economy prepared by Roland 
Berger and Oliver Wyman for the period between September 2013 and June 2014 which are in the 
possession of Banka Slovenije, (f) all minutes of the steering committee and operating comm ittee, 
(g) loan files with an explanation how they were used in the valuation, (h) samples of real estate 
valuations and (i) other documents used in the assessment18. Access to such  documents will be 
subject to confidentiality requirements.  
1.14 The draft law pr ovides that the costs of legal proceedings will be paid by the State.  
2. Observations    
2.1 Prohibition of monetary financing  
2.1.1  The ECB has already delivered opinions on three earlier versions of the draft law  prepared by the 
                                                 
15        See Article 10 of the draft law.  
16        See Article 11 of the draft law.  
17        See point 3 of the introductory part of the explanatory memorandum.  
18        See Article 4 of the draft law.  
ECB -PUBLIC  
5 Government of the Republic of Slovenia19. Under the first version of the draft law , compensation for 
damages incurred as a result of the extraordinary measures was required to be paid either by 
Banka Slovenije or the State, and if no liability could be attributed to Banka Slovenije, 
compensation was required to be paid by the State20. Under the second version of the draft law , 
even though Banka Slovenije would be liable for damages, provision was also made for Banka 
Slovenije to file an action against the State in order to prove in a separate cour t procedure that 
Banka Slovenije was not liable for the damages resulting from the imposition of the extraordinary 
measures21. The third version of the draft law did not make any reference to the liability of the 
State22. Similarly to the latter, t he current version of the draft law  does not make any reference to 
the liability of the State.  It however stipulates  that the costs of legal proceedings will be paid by the 
State.  
2.1.2  Against this background, the ECB reiterates the observations made in its previo us opinion  on this 
matter23. As noted therein24, a requirement that Banka Slovenije must pay compensation for 
damages, to the extent that it results in Banka Slovenije assuming the liability of the Republic of 
Slovenia , would not be in line with the monetary  financing prohibition laid down in Article 123 of the 
Treaty25.  As repeatedly noted by the ECB, w hile resolution tasks may be considered to be central 
banking tasks, provided that they do not undermine the independence of a national central bank 
(NCB) in accordance with Article 130 of the Treaty, the discharge of these tasks by NCBs  may not 
extend to the financing of resolution funds or other financial arrangements related to resolution 
proceedings as these are governmental tasks26. In this respect , it is noted that Directive 
2014/59/EU of the European Parliament and of the Council27 provides that the resolution financing 
arrangements may be used to pay compensation to shareholders and creditors if the valuation 
carried out for the purposes of assessi ng whether shareholders and creditors would have received 
better treatment if the institution under resolution had entered into normal insolvency proceedings 
determines that any shareholder or creditor has incurred greater losses than t hey would have 
incur red under normal insolvency proceedings28. It is also noted that Regulation (EU) No 806/2014 
of the European Parliament and of the Council29 envisages that, on the one hand, the resolution 
                                                 
19  See Opinion CON/2017/16, Opinion CON/2017/41 and Opinion CON/2019/13.  
20       See paragraph 1.4 of Opinion CON/2017/16.  
21       See par agraph 1.4 of Opinion CON/2017/41.  
22       See paragraphs 1.6 and 2.1.1 of Opinion CON/2019/13.  
23       See paragraph 2.1.2 of Opinion CON/2019/13.  
24       See also paragraph 2.1 of Opinion CON/2017/16 and paragraph 2.1 of Opinion CON/2017/41.   
25  For the purposes of the monetary financing prohibition, 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)  defines ‘other type of credit facility’, inter alia, as ‘any financing of the 
public sector’s obligations vis -à-vis third parties’.  
26  See, e.g. paragraph 3.2.3 of Opinion CON/2016/28 and paragraph 2.1.2 of Opinion CON/2019/13.  
27  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).  
28  See Articles 75 and 101(1)(e) of Direct ive 2014/59/EU.  
29   Regulation (EU) No 806/2014 of the European Parliament and of the Council of 15 July 2014 establishing uniform 
 
ECB -PUBLIC  
6 fund may be used to pay compensation to shareholders or creditors if,  following a valuation, they 
have incurred greater losses than they would have incurred under normal insolvency proceedings  
while on the other hand, in the case of non- contractual liability, the Single Resolution Board would 
compensate for any damage caused by it or by its staff in the performance of their duties30. The 
draft law should establish liability arrangements which clarify that Banka Slovenije is not liable to  
pay compensation for damages  in circumstances that mirror the compensati on provided for  under 
Directive 2014/59/EU and Regulation (EU) No 806/2014 to be paid from resolution financing 
arrangements to shareholders or creditors when a second independent valuation (carried out after 
resolution actions have been effected) determines that shareholders or creditors have incurred 
greater losses than they woul d have incurred under normal insolvency proceedings, as otherwise,  
Banka Slovenije would  de facto finance extraordinary measures akin to resolution proceedings . 
Banka Slovenije may not finance a government task.  
2.1.3  In addition, the ECB notes that Article 258 of the Treaty empowers  the European Commission to 
bring a case before the Court of Justice of the European Union where a Member State has failed to 
fulfil an obligation under t he Treaties, e.g. by way of enacting national legislation incompatible with 
the Treaties. S uch action for infringement of Union law by a Member State covers also infringement 
proceedings in connection with the prohibition on monetary financing laid down in  Article 123 of the 
Treaty. In addition, under Article 271(d) of the Treaty the Governing Council of the ECB has in 
respect of NCBs  the same powers as those conferred upon the Commission in respect of Member 
States by Article 258 of the Treaty . Consequently, if the ECB considers that a n NCB  has infringed  
an obligation under the Treaties,  including where the monetary financing prohibition is concerned31, 
the ECB may bring an action for failure to fulfil obligations against that NCB  before the Court32.  
2.2 Financial independence of Banka Slovenije  
 As the ECB has repeatedly stated33, Member States may not put their central banks in a position 
where they have insufficient financial resources and inadequate net equity to carry out their ESCB 
or Eurosystem -related tasks, as well as their  national tasks . Consequently, the impact  of the draft 
law on the financial resources of Banka Slovenije and its financial independence should be 
carefully considered  should there be a possibility that  Banka Slovenije could lose a significant 
amount of its reserves due to compensation for damages to be paid under the draft law .  
2.3 Professional secrecy  
2.3.1  As noted by the ECB in its opinions on earlier versions of the draft law , national legislation should 
be compatible with obligat ions to maintain professional secrecy imposed by Union law, in particular 
                                                                                                                                                             
rules and a uniform procedure for the resolution of credit institutions and certain investment firms in the framework of 
a Single Resolution Mechanism and a Single Resolution Fund and amending Regulation (EU) No 1093/2010 (OJ L 
225, 30.7.2014, p. 1).  
30  See Articles 76(1)(e) and 87(3) of Regulation (EU) No 806/2014.  
31        See paragraph 2 of Opinion CON/2005/50 and paragraph 3.2.2 of Opinion CON/2010/30.  
32        Article 35.6 of the Statute of the ESCB and of the ECB . See also Recital 9 of  Council Regulation (EC) 3603/93 
according to which,  notwithstanding the role assigned to the Commission pursuant to Article 258 of the Treaty, it is 
for the ECB, pursuant to Article 271(d ) of the Treaty, to ensure that NCBs honour the obligations laid down by the 
Treaty.  
33  See paragraph 3.3 of Opinion CON/2014/24, paragraph 2.2 of Opinion CON/2014/27, paragraph 3.1.1 of Opinion 
CON/2014/56, paragraph 2.3 of Opinion CON/2017/17 and paragraph 2.2 of Opinion CON/2019/13.  
ECB -PUBLIC  
7 by Article 53 of Directive 2013/36/EU of the European Parliament and of the Council34. In this 
respect , the ECB considers that except for the outcome of stress tests , the publication of which is 
explicitly permitted under Article 53(3) of Directive 2013/36/EU,  the stress test reports , AQR and 
asset valuations  relating to individual supervised banks are to be regarded as confidential 
information.  Disclosure of such conf idential information can generally only be permitted in cases 
specified in  Article 53(1) of Directive 2013/36/EU, which does not include disclosure to all the 
claimants envisaged under the draft law as disclosure is only permitted in cases of civil 
proceed ings in connection with cases where a credit institution has been declared bankrupt or  is 
being compulsorily wound up35. 
2.3.2  In order to ensure the adequate protection of confidential supervisory information, the disclosure of 
stress test reports  and minutes of  the steering and operating committees  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 Court36 should be done 
without confidential information being disclosed.  
2.4 Miscellaneous  
2.4.1  Finally , as previously noted by the ECB37, pursuant to Article 33 of Council Regulation (EU) No 
1024/201338, from 3 November 2013 onwards, in view of the imminent assumption of its prudential 
supervisory tasks under Regulation (EU) No 1024/2 013, the ECB was authorised to require the 
national competent authorities, including Banka Slovenije, together with credit institutions, financial 
holding companies, mixed financial holding companies and mix ed-activity holding companies of 
euro area Member States, as well as persons belonging to these entities and third parties to whom 
these entities had outsourced functions or activities, to provide all relevant information for the ECB 
to carry out a comprehensive assessment, including a balance- sheet assessment, of credit 
institutions in euro area Member States. The comprehensive assessment conducted by the ECB in 
this context comprised two components, including an AQR , which was a point -in-time assessment 
of the accuracy of the carrying value of banks’ assets as on 31 December 2013. The AQR was 
undertaken by the ECB and the national competent authorities, including Banka Slovenije, and was 
based on a uniform methodology and harmonised definitions. The comprehensive assessment was 
based on Regulation (EU) No 575/2013 of the European Parliament and of the Council39 and 
                                                 
34  
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 credit 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).  
35  
See the judgement of the Court of Justice of 19 June 2018, Baumeister , C-15/16, ECLI:EU:C:2018:464; the 
judgement of the Court of Justice of 13 September 2018, UBS Europe and Others , C-358/16, ECLI:EU:C:2018:715; 
and the judgement of the Court of Justice of 13 September 2018, Buccioni , C-594/16, ECLI:EU:C:2018:717.  
36  See paragraph 123 of the Constitutional Court 's Decision.  
37  See paragraph 2.9 of Opinion CON/2017/41 and paragraph of 2.4.2 of Opinion CON/2019/13.  
38  Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank 
concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63).  
39  Regulation (EU) No 575/2013 of the European Parliament and of the Counci l of 26 June 2013 on prudential 
requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 
27.6.2013, p. 1).  
ECB -PUBLIC  
8 Directive 2013/36/EU40. The ECB notes that the judicial review  of the comprehensive assessment, 
including the underlying uniform methodology, cond ucted by  the ECB in this respect falls outside 
the competence of the national courts, and falls exclusively  within the competence of the Court of 
Justice of the European Union. It would be useful, to avoid any possible doubt on this issue, to 
introduce a provision into the draft law to clarify this particular point, so that any possible 
discrepancies between the draft law and Union law in this respect can be avoided.  
 
This opinion will be published on the ECB’s website.  
 
Done at Frankfurt am Main, 28 May 2019.  
 
 [signed]  
 
The President of the ECB  
Mario DRAGHI  
                                                 
40  See pages 2 to 4 of the European Central Bank, Aggregate Report on the Comprehensive Assessment: Summary 
(October 2014), available on the ECB’s website at www.ecb.europa.eu.