EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 11 September  2018  
on amendments to the reform of popolari banks and cooperative banks   
(CON/20 18/42) 
 
Introduction and legal basis  
On 3 August  2018 the European Central Bank (ECB) received a request from the Minist ry of Economic 
Affairs and Finance for an opinion on Article 11 of Decree- Law No 91 of 25 July 2018 on the extension of 
deadlines for popolari  banks and cooperative banking groups  (hereinafter  the ‘Decree- Law’). 
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 sixth indent of Article 2(1) of Council Decision 98/415/EC1, as 
the Decree- Law relates 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 Central Bank, the Governing Council has adopted this opinion.  
 
1. Purpose of the  Decree -Law 
The Decree- Law introduces amendments to Decree- Law No 3 of 24 January  2015 on the reform of 
popolari banks2 (hereinafter ‘ Decree- Law 3/2015 ’) and to Decree- Law No 18 of 14 February  2016 on the 
reform of cooperative banks3 (hereinafter ‘ Decree- Law 18 /2016 ’), in order to extend the deadlines 
provided for in those laws . In addition, it introduces amendments to Legislative Decree No 385 of 
1 September 19934 (hereinafter the ‘ Consolidated Law on Banking’ ) that seek to (a) increas e cooperative 
banks ’ holdings  in the capital of their  parent companies ; (b) enhanc e the local character  and 
decentrali sed features  of cooperative bank ing groups ; (c) set a mandatory proportion of  the board  of 
directors to be appointed by cooperative banks (half plus two  of the overall number of directors) ; and 
(d) provide  cooperative banks that have  a lower risk profile with greater autonomy . 
                                                 
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  Decreto Legge 24 gennaio 2015, no. 3 “M isure urgenti per il sistema bancario e gli investimenti”  (GU Serie Generale 
no 19 of 24- 01-2015), converted into law by Legge 24 marzo 2015, no. 33 “Conversione in legge, con modifi cazioni, 
del decreto- legge 24 gennaio 2015, n. 3, recante misure urgenti per il sistema bancario e gli investimenti ” (GU Serie 
Generale no 70 of 25- 03-2015 – Suppl. Ordinario no 15).  
3  Decreto Legge 14 febbraio 2016, no. 18 “ Misure urgenti concernenti la riforma delle banche di credito cooperativo, la 
garanzia sulla cartolarizzazione delle sofferenze, il regime fiscale relativo alle procedure di crisi e la gestione 
collettiva del risparmio” (GU Serie Generale n.37 of 15-2-2016 ) , converted into law by Legge 8 aprile 2016 n. 49 
“Conversione in legge, con modificazioni, del decreto- legge 14 febbraio 2016, n. 18, recante misure urgenti 
concernenti la riforma delle banche di credito cooperativo, la garanzia sulla cartolarizzazione delle sofferenze, il 
regime fi scale relativo alle proc edure di crisi e la gestione collettiva del risparmio” (GU Serie Generale no 87 of 14-
04-2016).  
4  Decreto Legislativo 1 settembre 1993, n. 385 “Testo unico delle leggi in materia bancaria e creditizia” (GU Serie 
Generale n.230 of 3 0-9-1993 - Suppl. Ordinario n. 92) . 
ECB -PUBLIC  
2 1.1 Extension of deadlines for popolari  banks and cooperative banking groups  
1.1.1  Pursuant to Article 2(1) of Decree- Law 3 /2015 , popolari  banks with assets of mor e than 
EUR  8 billion are obliged either to convert to joint -stock companies, wind up,  or reduce their assets 
below that threshold within 18 months  from the entry into force of the Banca d’Italia implementing 
measures adopted pursuant to Article 29 of the C onsolidated Law on Banking. The Decree- Law 
postpones this deadline to 31 December 2018.  
1.1.2  Pursuant to Article 2(1) and (2) of Decree- Law 18/2016, a cohesion contract is to  be concluded 
among cooperative banks  and the parent company  within 90 days from the date on which 
authorisation is received from the competent authority  allowing the creation of a cooperative 
banking group. Subsequently, within 90 days from entering the cooperative banking group in the 
Italian company register , additional individual coopera tive banks may request  to sign the cohesion 
contract  on the same conditions as the initial signatories . The Decree- Law extends both deadline s 
to 180 days.  
1.2 Governance issues  
The Decree- Law amends Article 37- bis of the Consolidated Law on Banking, with reference to the 
regime applicable to cooperative banking groups . In particular, it provides for  the minimum 
shareholding in a cooperative parent company  held by cooperative banks  to be increased to 60 %. 
In addition, it provides  that cooperative banks are to be represented on the board of directors of the 
parent company of the cooperative banking group being assigned half of the total number of seats 
available, plus an additional two seats ( on the basis of  the ‘half plus two’  rule).  
1.3 Enhancement of the decentr alised features of the cooperative banking group      
The Decree- Law introduces a new paragraph 3-bis into Article 37- bis of the Consolidated Law on 
Banking. In particular, it increases the participation of individual cooperative banks in the 
formulation of the group’s strategic and operational  plan by means of  compulsory  consultations to 
take place at  ‘territorial meetings ’, which are held at local level . In addition, it allows cooperative 
banks with a lower risk profile (a) to autonomously define their st rategic and operational plans, in 
line with objectives and methodologies set by the parent  company ; and ( b) to autonomously 
nominate members of their b oards  of directors  and, in the event that the parent  company  disagrees 
with these nominations , to present  a list of three alternative candidates  from which the parent 
company  may choose one. 
 
2. The appropriate time to consult the ECB  
2.1 The ECB must be consulted at an appropriate stage in the legislative process. This should be a 
time that enables the ECB to adopt  its opinion in all required language versions and that enables  
the authority initiating the legislative provision to take the ECB’s opinion into account before it  
decides on the substance5. 
2.2 In the Italian legal system, a decree- law, adopted by the Governm ent, enters into force following 
publication in the Gazzetta Ufficiale  and must be submitted on the same day to Parliament for  
                                                 
5  See European Central Bank, Guide to consultation of the European Central Bank by national authorities regarding 
draft legislative provisions (October 2015), pp. 21- 22, available on the ECB’s website at www.ecb.europa. eu. 
ECB -PUBLIC  
3 conversion into law. If not converted within 60 days of publication, the decree -law is rendered  
invalid with retroactive applicat ion. In the light of the above, the ECB should be consulted before 
the adoption of a decree- law6. 
 
3. Observations   
3.1 With reference to the extension of the deadline set under Article 2(1) of Decree- Law 3 /2015 for the 
transformation of popolari banks into joint -stock companies , the ECB understands  that the need for 
this extension is based on  the constitutional review of Decree- Law 3/2015, which has now been 
concluded. In particular, the original  deadline was suspended by the Italian Council of State, 
pending a d ecision of the Italian Constitutional Court. As a result of the constitutionality of Decree-
Law 3/2015 having been upheld by the Italian Constitutional Court in  Decision No 99 of 
21 March 2018 (Decision 99/2018)7, and following an upcoming assessment by th e Council of 
State, time will start running again  in relation to the deadline . At that point, popolari banks will have 
less than two weeks to call an extraordinary general meeting and vote on the ir transformation into 
joint-stock companies .  
3.2 Against this b ackground, the postponement of the deadline to 31 December 2018 seems 
reasonable , as this  will allow popolari banks that  have not yet compl ied with Article 2(1) of Decree-
Law 18/2016 to do so within a feasible timeframe. Nonetheless, it is note d that Decis ion 99/2018 
upheld the constitutionality  of Decree- Law 3/2015 in allowing cooperative banks  to limit, even in 
full, the right of shareholders to have their shares redeemed in case of withdrawal from the 
company when this limitation is necessary to meet the own funds requirements. For this reason, 
from a prudential perspective,  the extension of this  deadline should not  be construed as allowing 
the postponement of  the adoption by popolari banks of any measures necessary  for their 
transformation into joint -stock companies.  
3.3 With reference to the extension of the deadlines  set under Article 2(1) of  Decree- Law 18 /2016 for 
the conclusion and signature of  the cohesion contract , the ECB would like to underscore that the 
swift adaptation of individual cooperative bank s and their integration within cooperative banking 
groups  as one of the foremost objectives of the reform should be preserved.  The ECB notes that 
the establishment of each group has already been authorised by the competent authorities, 
triggering the start  of the 180- day period within which the cooperative banks would be required to 
sign the cohesion contract.  
3.4 With reference to the mandatory proportion of directors o n the boards  of parent companies  that are 
appointed by  individual cooperative banks  of the group and the increase in the shareholdings  in the 
parent companies  owned by th ose individual cooperative banks , the ECB understands  that the se 
amendment s strengthen the position of individual cooperative banks within cooperative banking 
groups  in line wit h article 45 of the Italian Constitution.  
                                                 
6  See paragraph 2 of Opinion CON/2012/64. All ECB opinions are published on the ECB’s website at 
www.ecb.europa.eu.  
7  Sentenza 99/2018 (ECLI:IT:COST:2018:99) . 
ECB -PUBLIC  
4 3.5 As previously noted by the ECB8, the reform of Italian cooperative banks and the consolidation of 
individual cooperative banks within banking groups  are important  to address  the vulnerabilities of 
the Italian cooperative ba nking sector, in particular its capacity to absorb negative shocks and to 
provide  opportunities for enhanced efficiency and diversification of investment s. For this reason, it 
should be ensured that the fundamental objectives of the reform of the cooperative banking sector, 
namely  moderni sing and improv ing the business model utilised in  the cooperative sector and 
enabling parent companies to gain  access to capital markets , are not affected.  
3.6 Moreover, with regard to the increase to 60 % of the minimum shareholding in cooperative parent 
companies  that must at least be held by cooperative banks , the ECB understands  that the power 
entrusted to the Italian Prime Minister  to lower this threshold for the interest of financial stability  will 
be effectivel y used in case of need.  
3.7 As previously noted by the ECB9, a parent company’s powers to manage affiliated institutions and 
coordinate the cooperative banking group is key to the success of the reform. In this regard, it 
should be ensured that the obligation for  parent companies to consult individual cooperative banks 
on the definition of the group strategic and operational plan does  not have an impact  on the 
exercise  by the parent companies  of the power s of direction and coordination.   
3.8 Overall, the ECB is of the opinion that the amendments to the current legislation introduced by the 
Decree- Law should be consistent  with the objectives of the reform of the cooperative banking 
sector as introduced by Decree- Law 18/2016.  
 
This opinion will be published on the ECB ’s website.  
 
 
Done at Frankfurt am Main, 11 September  2018 . 
 
[signed]  
 
The President of the ECB  
Mario DRAGHI  
                                                 
8  See paragraph 3.1.3 of Opinion CON/2016/17.  
9  See paragraph 3.1.5 of Opinion CON/2016/17.