EN ECB -PUBLIC  
 
 
 OPINION OF THE EUROPEAN CENTRAL BANK  
of 10 June  2013  
on recovery and resolution plans  
(CON/2013/ 42) 
 
Introduction and legal basis  
On 31 May  2013, the European Central Bank (ECB) received a request from the Nationale Bank van 
België/Banque Nationale de Belg ique (NBB), acting on behalf of the Belgian Ministry of Finance, for an 
opinion on a draft law amending the Law of 22 March 1993 on the legal status and supervision of credit 
institutions and the Law of 22 February 1998 establishing the Organic Statute of the Nationale Bank van 
België/Banque Nationale de Belgique (hereinafter the ‘draft law’). The ECB was requested to deliver an 
opinion as a matter of extreme urgency to allow for this element of the Belgian crisis management 
framework to be adopted before t he Belgian Parliament’s summer recess.  
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 law relates to the NBB  and contains rules 
applicable to credit institutions  which materially influence the stabilit y 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 draft law  
1.1 The draft law aims to strenghten the ability of Belgian credit institutions and public authorities to 
prevent future financial crises, or to prevent such crises from  intensif ying, and to react promptly in 
the event of a crisis , by introducing into Belgian law a framework governi ng the establishment and 
the assessment of recovery and resolution plans for credit institutions . Pending the designation of a 
resolution authority  in Belgium , the draft law temporarily grants the NBB , in its capacity as 
supervisory authority , certain powe rs concerning  recovery and resolution plans2. 
1.2 Under the draft law, all Belgian credit institutions must establish  and keep up to date a recovery 
                                                      
1  OJ L 189, 3.7.1998, p. 4 . 
2  Explanatory memorandum, general introduction.  
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2 plan detailing  the measures susceptible of be ing taken by the institution or its shareholders to 
correct a significant deterioration in its financial position , without having any significant adverse  
effect s on the Belgian or the international financial system3. These measures  may take various 
forms, and can include increasing the credit institution’s own funds  or reduc ing its risk profile by 
selling off branches, lines of business or subsidiaries, but they may not allow for any form of 
exceptional financial support from public authorities or the central banks.  To ensure th at this 
prohibition  is fully effective , the concept of ‘public authorities’ is to be understood in the widest 
sense  and cover s, for example , the deposit guarantee scheme, the resolution fund, and the State in 
its capacity as shareholder  of a credit institution4. The credit institutions must test their recovery 
plans by comparing them with  various crisis scenario s, ranging from a  crisis that is specific to a n 
institutio n to a one that is systemic. Recovery plans are to be submitted to t he NBB , which will  
assess the ir compliance with the standards set out in the draft law , taking into account  the fact that 
other institutions might also implement a recovery plan in the same period5. The NBB will require 
an institution to revise its recovery plan within three  months if it is found to have  shortcomings  or 
if there are obstacles to its implementation . If the shortcomings are not remedied within the 
deadline  provided , the institution  will be requ ired to take any measures that the NBB deem s 
necessary to remedy the situation , such as  facilitate a reduction of the risk profile of the credit 
institution concerned, or modify its governance structure . Finally, if a credit institution is found to 
be in breach of regulatory requirements , if the manner in which it is manage d or its financial 
situation adversely aff ect the proper fulfilment  of its commitments  or do not offer sufficient 
guarantees in terms of its solvability, liquidity or profitability, and  where the credit institution 
concerned  has no  measures in place to  remed y the situation as requ ired by the NBB, the NBB  has 
the power to request the  credit  institution to implement all or part of its recovery plan6. 
1.3 The NBB must establish , and keep up to date, resolution plans  in respect of all Belgian credit 
institutions , which are to outline  the measures to be taken in the event of a credit institution’s 
failure in order, in particular , to safeguard the continui ng operation  of its critical functions7, to 
avoid adversely affecting financial stability , and to protect the assets of the depositors covered  by 
the de posit guarantee scheme8. Simplified resolution plans may be drawn up depending on (i) the 
potential  impact of a n institution ’s failure on financial stability , or (ii) the existence of a plan at 
group level. The measures  outlined  in the resolution plan may not take  any account of the 
possibility of  exceptional  financial support by public authorities or the central banks . The NBB will 
be responsible for assessing  the r esolvability of credit institutions. If the NBB  finds that there are 
obstacles to resol vabil ity, and if it considers  the remedial actions propose d by a credit institution 
                                                      
3  Article 6 of the draft law  (new Article 45/1  of the Law of 22 March 1993 ).  
4  Explanatory memorandum, comment on Article 6. 
5  Article 8 of the draft law (new Article 45/2 of the Law of 22 March 1993).  
6  Article 14 of the draft law (new Article 57/1 of the Law of 22 March 1993 , referring to Article 57 §1 ). 
7  Critical functions are defined as any activities, services and operations the interruption of which is likely to disrupt the 
economy or the finan cial system (Article 3 of the draft law, new Article 3  §1 26° of the Law of 22 March 1993 ). 
8  Article 11 of the draft law  (new Article 55/1 of the Law of 22 March 199 3). 
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3 unsatisfactory, it will have the authority  to impose certain measures on the institution  in question, 
requiring it, for example,  to enter into  contracts  for services , to limit r isk exposure, to assign certain 
assets  or to change  its legal or operational structure. Where the institution concerned fails to  
comply with the NBB’s request, it will be considered to be in breach of regulatory requirements 
such that the NBB will have the  power to require  it to implement its recovery plan9. Until  the 
European Commission’s p roposal for a  Directive on the recovery and resolution of credit 
institutions and  investment firms  dated 6 June 201210 (hereinafter the ‘BRRD’) is fully transposed , 
the resolution plans will not be submitted to the Ministry of Finance as t his would conflict with the 
professional secrecy  obligations  which the NBB is bound by  in its capacity as supervisory  
authority11 pursuant to Directive 2006/48/EC of the European Parliamen t and of the Council of 
14 June 2006 relating to the taking up and pursuit of the business of credit institutio ns12. 
 
2. General observation s 
2.1 The ECB welcomes the draft law as it strengthens the tools and procedures available to the national 
authorities  for planning the recovery and resolution of credit institutions . The approach taken is  in 
line with the Financial Stability Board’s (FSB) Key Attributes of Effective Resolution Regimes for 
Financial Institutions13 and the BRRD , whereby recovery and resolut ion plans are a key element of 
preparation for possible crisis scenarios and for taking swift and effective remedial action.  
2.2 The ECB notes that the Belgian authorities have decided , in advance of  the adoption of the BRRD,  
to transpose the provisions which they consider  to be close to finalisati on and which d o not r equire 
institutional reform . The ECB understands that the responsibilities entrusted to the NBB by the 
draft law do not take into account  the designation of a resolution authority in Belgium , which will 
be done at a later stage once the BRRD is adopted. Any resolution power s vested in  the NBB 
would need to be functionally separate from its current  supervisory tasks, in order to ensure 
independence and avoid conflicts of interest14. In the event that the NBB  is not ultimately 
designated  as the resolution authority, it is important that the designated resolution authority 
engage s in an adequate exchange of information with the NBB in its capacity as central bank as 
well as supervisory authority15. In addition, th e ECB understands that , once the BRRD is adopted , 
the framework established under  the draft law will be reviewed in order to ensure full consistency 
                                                      
9  Article 14 of the draft law (new Article 57/1 of the Law of 22 March 1993 , referri ng to Article 57 §1 ). See point 1.2 
above.  
10  Proposal for a Directive of the European Parliament and of the Council establishing a framework for the recovery and 
resolution of credit institutions and investment firms and amending Council Directives 77/91/ EEC and 82/891/EC, 
Directives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC and 2011/35/EC and Regulation (EU) 
No 1093/2010, COM  (2012) 280 final.  The ECB commented on this proposal in its Opinion CON/2012/99 . All ECB 
opinions are published on  the ECB’s website at www.ecb.europa.eu.  
11  Explanatory memorandum, general introduction . 
12  OJ L 177, 30.6.2006, p. 1.  
13  Key Attributes of Effective Resolution Regimes for Financial Institutions, October 2011, Financial Stability Board. 
Available on the  FSB’s website at www.financial stabilityboard.org.  
14  See also Opinion CON/2013/28 , paragraph 2.3.  
15  See Opinion CON/2012/99 , paragraph 3.1.  
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4 with developments at Union level.  
 
3. Credit institutions subject to the establishment of rec overy and resolution plans  
3.1  The ECB welcomes the broad scope of application of the draft law , which will cover all Belgian 
credit institutions, inclu ding their branches and subsidiaries both in Belgium and abroad , in terms 
of the requirement for  recove ry and resolution plans16. This will allow all credit institutions  to 
benefit from a clear plan for remedial action in the event of emerging difficulties , and w ill provide 
clarity regarding their resolvability. The existence of such plans for all credit ins titutions  also 
address es potential concerns as regards ensuring a level playing field. The ECB notes that , to 
balance the extent of the scope of application  against the necessary proportionality , the NBB will 
have the power to grant exempt ions from the req uirement to establish a recovery plan , based on t he 
impact that the  failure of an institution would have on financial stability or because the institution is 
part of a group for which the competent authorities have already communicated a recovery plan to 
the NBB17. It is important to conduct a rigorous assess ment as to  why no potential threat  to the 
system  is considered likely in the event of the failure of  an institution, demonstrating fully in the 
case in question why recovery planning is considered unnece ssary18.  
3.2 The ECB notes that the NBB’s power to lay down t he minimum content of recovery plan s in a 
regulation  will allow  developing  international and European standards , in particular  
Recommendation of the E uropean Banking Authority on the development of recovery plans  
(EBA/REC/2013/02) dated 23 January 2013 , to be taken into account19. 
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 10 June 2013.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI  
 
                                                      
16  Article s 6 and 11 of the draft law  (new Article s 45/1 and 55/1 of the Law of 22 March 199 3). 
17  Article 6 of the  draft law  (new Article 45/1  §5 of the Law of 22 March 1993 ). 
18  See Opinion CON/2013/28 , paragraph 2.1.  
19  Explanatory memorandum, co mment on Article 6. See also Article 5(7) of the BRRD .