EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 2 December  2015  
on the legal framework for home savings banks  
(CON/20 15/53) 
 
Introduction and legal basis  
On 1 November  2015 the European Central Bank (ECB) received a request from the German Federal 
Ministry of Fina nce for an opinion on a draft law amending the German Bausparkassen Act1 (hereinafter 
the ‘draft law’).   
The ECB’s competence to deliver an opinion is based on Article s 127(4)  and 282(5) of the Treaty on the 
Functioning of the European Union and Article  2(1) of Council Decision 98/415/EC2 as the draft law 
contains draft legislative provisions within the ECB’s field of competence pursuant to Article 127(6) of the 
Treaty and rules applicable to financial institutions insofar as they materially influence the s tability 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. Main p urpose of the draft law  
1.1 Taking account of the challenges created by the current environment of low interest rates, the draft 
law introduces provisions aimed at secur ing and strengthen ing the manner in which profits are 
generated by Bausparkassen according to the German Bausparkassen Act (for  the purposes of the 
present opinion referred to as home savings banks ) and proposes measures to s trengthen the risk 
management of home savings banks . The main purposes of the draft law are to: (a) amend the 
Bausparkassen Act  so that it  allocat es supervisory competences to the ECB and the Federal 
Financial Supervisory Authority (BaFin) pursuant to Council Regulation (EU) No 1024/2013; and ( b) 
ensure that the typical risks that  home savings banks  face while conducting their business activities 
are managed by  the home savings banks themselves and not by other units of the banking group 
within which home savings banks are often included.  
1.2 The draft law specifies the requirements that  home savings bank s must fulfil when carrying out 
their business  activities . In particular, Tier 1  capital needs to amount to at least EUR  20 million . 
Further more, suitable regulations and instruments to manage, monitor and control the specific risks 
that home savings banks face in their business  activities must be implemented and a business plan 
                                                 
1  Bausparkassen Act (‘Gesetz über Bausparkassen’) of 15 February 1991 (BGBl. I p. 454) , as amended by 
Article  6(14) of the Law of 28 August 2013 (BGBl. I p. 3395).  
2  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) . 
ECB -PUBLIC  
2 must be presented to BaFin that sets out  the manner in which these business activities will be 
carried out on a regular and sustainab le basis3.  
1.3 The draft law introduces a requirement that , in the event of a home savings bank’s banking license 
expir ing or being  withdrawn by the competent authority, all building loan agreements , including all 
related assets and liabilities , must be transferred to another home savings bank. If the bank does 
not comply with this requirement, BaFin may ord er the business  to be wound up4. 
1.4 The draft law reinforces the principle that a home savings bank may not be managed by an y other 
type of  entity by stipulating that any contract or agreement  that places a home savings bank’s 
management under the control  of a different entity  is invalid , unless this entity is recognised as a 
home savings bank5. 
1.5 The draft law introduces a requirement  to put in place a specific and independent  risk management  
system , significant elements of which – in particular collect ive management and the management 
of risks related to the collective home savings business -  may not be transferred to third parties6.  
1.6 The draft law extends the possibility of home savings banks to grant ‘other building loans ’. Other 
building loans ar e granted in order to finance housing expenditures without being linked to a home 
savings contract . The draft law , on the one hand,  increases the total limit on other building loans 
from 75% to 100% of home savings  loans and loans for pre-  and interim financing7, and, on the 
other hand,  allows home savings banks to use the funds from home savings deposits that  are 
temporarily  not being us ed to grant home saving loans for the purpose of granting other building 
loans8. 
1.7 The current L aw on home savings bank s does not allow home savings banks to issue covered 
bonds. Subject to the conditions set out in the Law on covered bonds9, the draft law grants home 
savings banks the possibility to issue covered bonds in order to grant home saving loans and other 
buildin g loans and to raise funds required by it t o carry out  its business  activities10. 
1.8 The draft law provides that the special items fund in the form of a technical reserve may be used to 
secure the collective caused interest margin, and if necessary to guar d against  any specific risk  
that the business activities might not be sustainable as they are carried out by the home savings 
banks.11 
 
                                                 
3  Section 2 of the draft Bausparkassen Act . 
4  
Section 2(5) and (6) of the draft Bausparkassen Act . 
5  Section 2a of the draft Bausparkassen Act . 
6  Section 8(1) and (2) of the draft Bausparkassen Act . 
7  Section 4(2) of the draft Bausparkassen Act . 
8  Section 6(1) No (2) of the draft Bausparkassen Act . 
9  Law on covered bonds ( ‘Pfandbriefgeset z’) of 22 May 2005 (BGBl. I p . 1373), as amended by Article 5 of the Law of 
2 November 2015 (BGBl. I p . 1864).  
10  Section 4(1) of the draft Bausparkassen Act . 
11  Section 6(2) No 2 of the draft Bausparkassen Act . 
ECB -PUBLIC  
3 2. General observations  
The draft law provides home savings banks with more flexibility to operate profitably, in particu lar 
by allowing them to issue covered bonds.  
 
3. Specific observations  
3.1 Special provisions on risk management  
The ECB acknowledges that the draft law aims at strengthening the risk management of home 
savings banks. In view of establishing a level playi ng field, however, outsourcing (parts) of the risk 
management should not be restricted by special provisions for home savings banks as provided 
under the draft law. The existing legal framework transposing Directive 2013/36/EU of the 
European Parliament an d of the Council12 already requires that the risks stemming from 
outsourcing are mitigated by a proper risk s trategy, processes and controls . Moreover, the current 
legal framework already requires that the risk management of any credit institution including home 
savings banks needs to be adequate for the credit institution’s specific type of business, risk profile 
and complexity.13 
3.2 Allocation of competences  
3.2.1 Member States may issue legislation that specifically addresses the business model of home 
savings banks . Such legislation has to comply with Union law, in particular Directive 2013/36/EU  
and Directive 2014/59/EU of the European Parliament and the Council14. However, w here national 
legislation creates competences  that are directly related to compet ences  conferred on the ECB, 
such competences established by national legislation should be applied by the ECB , provided that 
the relevant  provisions can be construed as implementing Union legislation .  
3.2.2 In particular, noting that the ECB has the exclu sive competence  to grant authorisations  within the 
Single Supervisory  Mechanism , the ECB understands that it will receive the  business plan 15 when 
going through the procedure to obtain an authorisation16. 
3.2.3 Similarly, where the draft law includes  a requirement that home savings banks must submit  a 
collective status report annually  to BaFin17, the ECB notes that the respective information is subject 
to the general obligation to submit information to the ECB18. It contains  data, for example,  on the 
banks’ capacity to meet liabilities, the amount of their assets and other data relevant to assess their  
                                                 
12  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 i nvestment firms, amending 
Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).  
13  Section 25b of the German Banking Act (‘Kreditwesengesetz’).  
14  Directive 2014/59/EU of the European Parliament and of the C ouncil 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).  
15  Section 2(1) No 5 of the draft Bausparkassen Act . 
16  Article 14(1) SSM Regulation.  
17  Section 4(5) of the draft Bausparkassen Act . 
18  Article 6(2) SSM Regulation, Article 21 SSM Framework Regulation.  
ECB -PUBLIC  
4 financial situation and stability19, and such data is essential for the ECB to be able to carry out 
supervision in accordance with the tasks conferred on it by  Council Regulation (EU) 1024/2013.  
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 2 December  2015.  
 [signed]  
 
The President of the ECB  
Mario DRAGHI  
                                                 
19  Section 3(5) of the draft Bausparkassen Act .