EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 12 December 2011 
on the establishment and financing of a resolution fund and on the amended calculation of 
contributions to the deposit guarantee scheme 
(CON/2011/103) 
 Introduction and legal basis
 
On 30 November 2011, the European Central Bank (E CB) received a request from the Nationale Bank 
van België/Banque Nationale de Belgique (NBB), on behalf of the Belgian Ministry for Finance, for an 
opinion on a draft law establishing a financial stabilit y contribution and creating a resolution fund, on the 
one hand, and amending the calculation of contributi ons to the Belgian deposit guarantee scheme, on the 
other hand1 (hereinafter the ‘draft law’), and on two draft royal decrees implementing these two chapters 
of the draft law (hereinafter respectively th e ‘draft Royal Decree on the Resolution Fund’2 and the ‘draft 
Royal Decree on the calculation of contributions to the DGS’3 and, together, the ‘draft royal decrees’). 
The ECB was requested to deliver an opinion under extreme urgency.  
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 consul tation of the European Central Bank by national 
authorities regarding draft legislative provisions4, as the draft law and the draft royal decrees relate to 
NBB 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 Central Bank, th e Governing Council has adopted this opinion. 
 
                                                 
1  Draft law establishing a financial stability contri bution and amending the Royal Decree of 14 November 2008 
implementing the Law of 15 October 2008 on measures to promote financial stability and, in particular, to set up a State 
guarantee for loans granted and other transactions in the c ontext of financial stability, as regards the protection of 
deposits, life insurance and the capital of authorised coope rative societies, and amending the Law of 2 August 2002 on 
the supervision of the financial sector and on fina ncial services. 
2  Draft Royal Decree on the organisation and functioning of th e Resolution Fund and defining the terms for payment of the 
contributions. 
3  Draft royal decree implementing Article 8, § 1, 1° bis, of the Royal Decree of 14 November 2008 implementing the Law 
of 15 October 2008 on measures to promot e financial stability and, in particul ar, to set up a State guarantee for loans 
granted and other transactions in the co ntext of financial st ability, as regards  the protection of deposits, life insurance and 
the capital of authorised cooperative so cieties, and amending the Law of 2 August 2002 on the supervision of the 
financial sector and on financial services. 
4  OJ L 189, 3.7.1998, p. 42. 
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2 1.  Purpose of the draft law and the draft Royal Decrees 
1.1 The draft law establishes a Resolution Fund destin ed to ensure the financing of measures reducing 
the impact of a credit institutio n’s default on the financial syst em and economic and social well-
being in Belgium5. The Resolution Fund does not aim at preventing the failure of a credit 
institution6 but rather at resolving ailing entities at th e lowest economic and social cost. For this 
purpose, the Resolution Fund will finance reso lution measures such as, according to the non-
exhaustive list in the Explanatory Memorandum to the draft Royal Decree on the Resolution Fund7: 
(i) a bridge bank, with the resolution authorit y taking over the bank, to allow an insolvent 
institution’s operations to continue, (ii) a total or  partial transfer of assets and/or liability from the 
ailing entity to a third party, (iii) a good bank/ba d bank split, or (iv) administrative, legal and 
advisory expenses and the need to preserve certain  vital functions of the banks, such as payment 
systems. The King will adopt a royal decree deliberated in the Council of Ministers, after 
consulting the NBB8, to activate the Resolutio n Fund, i.e. to finance a resolution measure.  
 Belgian credit institutions will pay an annual fi nancial stability contribution to finance the 
Resolution Fund9. It will amount to 0.022 % of the credit institution’s total liabilities at 
31 December of the preceding year, after deduction of (i) the deposits eligible for reimbursement 
by the Belgian deposit guarantee scheme (hereinafter  the ‘eligible deposits’), and (ii) its regulatory 
capital10. The ECB understands that the basis for calcu lating the financial stability contribution, 
which excludes eligible deposits, is conceived as an incentive to limit systemic risk related to the 
financing structure of credit institutions11. The amount used to calcul ate the credit institution’s  
annual financial stability contribution is communi cated to the Resolution Fund by the NBB on 
request12.  
 The Resolution Fund will be established w ithin the Deposit and Consignment Office ( Deposito- en 
Consignatiekas/Caisse des dépôts et consignations ), a government department without legal 
personality under the Minister for Fi nance. The Resolution Fund will book the financial stability 
contributions in a resolution reserve, whose amount  will be disclosed in the annual report on the 
Resolution Fund13. The Resolution Fund will transfer the a nnual financial stability contributions to 
the Belgian Treasury14. The draft law imposes a sanctioned15 duty of confidentiality for the Deposit 
                                                 
5  Article 2 of the draft law.  
6 Explanatory Memorandum to the draft Royal Decree on the Resolution Fund, comment on Article 1, p. 2. 
7  Explanatory Memorandum to the draft Royal Decree on the Resolution Fund, comment on Article 2, p. 2. 
8  Second paragraph of Article 2 of the draft law. 
9  Third paragraph of Article 2 and Article 3 of the draft law.  
10  Second paragraph of Article 3 of the draft law. 
11  Explanatory Memorandum to the draft law, pp. 2 and 3. 
12  Article 7 of the draft law; Explanatory Memorandum to the draft law, comment on Article 7, p. 10. 
13  Articles 3 and 4 of the draft Royal Decree on the Resolution Fund. 
14  Article 3 of the draft law. These amounts will thus be in tegrated in the resources of the Belgian State (Explanatory 
Memorandum to the draft law, comment on Article 3, p. 10).  
15  Article 458 of the Criminal Code. 
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3 and Consignment Office agents who may not discl ose the confidential information obtained when 
cooperating with the Resolution Fund.  
1.2 The draft law also amends the method for calcu lating the annual contribution to the Belgian deposit 
guarantee scheme16 (hereinafter the ‘contribution to the DGS’); that contribution was annulled by 
the Belgian Constitutional Court with effect from 1 January 201217. The Constitutional Court’s 
decision is based notably on the consideration that: (i) the amount of deposits collected from the public is not, as such, an indicator of difficulties likely to trigger the DGS’ intervention, and (ii) the 
uniform calculation of the contribution to the DGS , notably the absence of weighting according to 
the risk profiles of the credit institutions, create d a disproportionate prejudice for institutions that 
mainly finance themselves through deposit-taking activ ities, compared to those that have recourse 
to wholesale financing.  
 The draft law replaces the curre ntly applicable flat fee with an annual contribution to the DGS 
amounting to 0.10 % of the credit ins titution’s stock of eligible deposits at 31 December of the 
preceding year
18 and will be risk-weighted based on  three types of risk f actors: capital adequacy, 
quality of assets and liquidity19. The draft Royal Decree on the calculation of contributions to the 
DGS further defines the risk indicators, as well as the scores that will be applied to each of them.  
 
2. General observations  2.1 The ECB welcomes the establishment in Belgium of a resolution fund financed by contributions 
from Belgian credit institutions and the amendment of the calculation of the contribution to the 
DGS, as part of a broader range of initiatives st rengthening financial stability. The Fund regime 
entails the further disengagement of the State in fa vour of restructuring primarily financed by the 
banking sector
20. 
2.2 The ECB understands that the provisions submitted by the Belgian authorities concerning the 
Resolution Fund (paragraph 1.1) and the amended contribution to the DGS (paragraph 1.2) were 
drafted in the light of the corresponding Union legislative initiatives21, in accordance with the 
general principle of sincere cooperation and loya lty pursuant to the Treaty on European Union. 
This approach reduces the risk of significant divergences in national legal frameworks and the 
corresponding counterproductive effects. It is crucia l to strive for consistency and a level playing 
field across the Union and to minimise market distortions by national approaches to resolution 
funds. Therefore, it is important to ensure that th e national regime fits well into the evolving Union 
                                                 
16  Special Fund for Protection of Deposit and Life Insurances  organised by the Royal Decree of 14 November 2008 and 
amended by the Law of 23 December 2009. 
17  Constitutional Court, 23 June 2011, N°115/2011; Explanat ory Memorandum of the draft law, pp. 4 and following. 
18  Article 8 of the draft law. An additional 0.13% contribution to the DGS w ill be collected in 2012. 
19  Article 8 of the draft law; Explanatory Memorandum to  the draft law, comments on Article 8, pp. 11 to 15. 
20 See Opinions CON/2010/45 and CON/2010/83. 
21  These initiatives are (i) the proposal fo r a directive…./…../EU of the European Parliament and of the Council on Deposit 
Guarantee Schemes [recast], COM(2010) 368, and (ii) the Communication from the Commission to the European 
Parliament, the Council, the European Economic and Social  Committee and the European Central Bank, Bank Resolution 
Funds, 26.05.2010, COM(2010) 254 final. 
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4 framework and to provide for the possibility to  adapt it to future Union and international 
developments. 
2.3 In addition, the ECB welcomes that the draft law and the draft royal decrees accommodate several 
recommendations in previous ECB opinions on resolutions funds. First, the risk of double charging
22 is avoided since only credit institutions in corporated in Belgium are subject to the 
payment of the financial stability contribution, wh ich does not apply to branches of foreign credit 
institutions in Belgium23. Second, there is no automatic relati onship between the financial stability 
contributions and pay-out by the Resolution Fund24. The draft royal decree on the Resolution Fund 
provides that the financial stability contribution cr eates neither an entitlement by the paying credit 
institution to intervention by the Resolution Fund, nor a duty for the Resolution Fund to 
intervene25. 
 3. Resolution measures that may be financed by the Resolution Fund
26 
The ECB welcomes the Resolution Fund’s objective of financing resolution measures to reduce the 
impact of a credit institution’s default on the financ ial system and on economic and social well-being in 
Belgium27.  
The draft law does not specify the resolution measures that may be financed by the Resolution Fund.  
Only the Explanatory Memorandum to the draft royal decree on the Resolution Fund contains a non-exhaustive list of potential measures, such as financing of a bridge bank, a total or partial asset transfer or 
a good bank/bad bank split
28. The ECB recommends setting out, either  in the draft law or in the draft 
Royal Decree on the Resolution Fund, th e different types of resolution me asures that may be financed by 
the Resolution Fund. This would enhance legal certai nty and hence also benefit financial stability. The 
necessary flexibility can be maintained if the list of potentially eligible resolution measures is non-
exhaustive.  
The financing of resolution measures through the Reso lution Fund is subject to strict conditions under the 
Union State aid framework29, which applies to the Resolution Fund’s interventions. In particular, while it 
might be useful to have recourse to the Re solution Fund for the management of bad assets30, this is 
                                                 
22  CON/2011/66, paragraph 2.1, and the reference to the Eu ropean Council’s call for ‘further coordination between the 
different levy schemes in order to a void double-charging’ (conclusions of the European Council of 28-29 October 2010, 
available on the Council’s website  at www.consilium.europa.eu). 
23  Third paragraph of Article 2 of the draft law and Article 2 of the draft royal decree on the Resolution Fund. Explanatory 
Memorandum to the draft law, p. 3. 
24  CON/2011/29, paragraph 3.2; CON/2011/66, paragraph 3.2.2. 
25  Article 2 of the Draft Royal Decree on the Resolution Fund.  Explanatory Memorandum to the draft law, pp. 4 and 7.  
26  CON/2010/83, paragraphs 6.2 and 6.3; CON/2011/29, paragraphs 3.2 and particul arly 3.4; CON/2011/93, paragraph 5.2. 
27  Article 2 of the draft law.  
28  Explanatory Memorandum to the draft royal decree on  the Resolution Fund, comm ent on Article 2, p. 2. 
29  See in particular the latest Communication from the Commi ssion on the application, from 1 January 2012, of State aid 
rules to support measures in favour of  banks in the context of the financial crisis, (OJ C 356, 6.12.2011, p. 7). 
30  Explanatory Memorandum to the draft royal decree on  the Resolution Fund, comm ent on Article 2, p. 2. 
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5 subject to strict conditions under the framework, especia lly regarding the pricing of the assets, in order to 
avoid a bailout of shareholders or creditors of the ailing bank. 
 4. Funding and replenishment of the Resolution Fund The ECB welcomes an ex ante levy on the financial industry, as this protects public funds and reduces 
moral hazard, and is in line with the countercycli cal approach of building up funds before a crisis.  
However, funds provided ex ante may be insufficient in a crisis situation a nd public funds may also 
become necessary. In such a case, the banking sector should be called on to reimburse the State. The principle of ex post recovery from the banking sector should promote additional market discipline and address moral hazard risk
31. The same principles apply to any full or partial replenishment of the 
Resolution Fund by the national authorities. The ECB stresses that the central bank may not finance the 
Resolution Fund, in line with the prohibition of monetary financing32. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 12 December 2011. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI 
                                                 
31  CON/2010/83, paragraph 6.3. 
32  CON/2008/59, paragraph 3.2, CON/2011/39, paragr aph 3.6, and CON/2011/93, paragraph 4.3.