EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 23 June 2014 
on measures accompanying the SSM Regulation 
(CON/2014/43) 
 Introduction and legal basis 
On 15 April 2014, the European Central Bank (ECB) re ceived a request from the Austrian Ministry of 
Finance for an opinion on a draft law amendi ng several legal acts including the Law on banking1, the Law 
on financial conglomerates2 and the Law on the Financial Market Authority3 (hereinafter the ‘draft 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 third and sixth indents of Article 2(1) of Council 
Decision 98/415/EC4, as the draft law relates to the Oeste rreichische Nationalbank (OeNB), to the 
prudential supervision of credit institu tions and to rules applicable to fi nancial institutions insofar as they 
materially influence the stability of financial ins titutions 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 implements legal provisions on macroprudential tasks and tools, procedural and 
federal state liability issues relating to Council Regulation (EU) No 1024/2013
5 (hereinafter the 
‘SSM Regulation’), and aims to smoothly inte grate the Austrian national banking supervisory 
system into the Single Supervisory Mechanism (S SM). Although the Austrian Financial Market 
Authority (FMA) is established as an integrated s upervisory institution, supervising all significant 
financial service providers in Austria, the FMA shares responsibilities with the OeNB in 
connection with banking supervision. For instance,  while the OeNB is ta sked with fact-finding, 
                                                 
1  Bundesgesetz über das Bankwesen (Bankw esengesetz), BGBl 532 /1993, as amended. 
2  Bundesgesetz über die zusätzliche Be aufsichtigung der Kreditinstitute, Vers icherungsunternehmen und Wertpapierfirmen 
eines Finanzkonglomerats (Finanzkonglomerat egesetz), BGBl I 70 /2004, as amended. 
3  Bundesgesetz über die Errichtung und Organisation der Fi nanzmarktaufsichtsbehörde (Fin anzmarktaufsichtsbehördenge-
setz), BGBl I 97/2001, as amended. 
4  Council Decision 98/415/EC of 29 June 1998 on the consulta tion of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 
5  Council Regulation (EU) No 1024/2013 of October 15 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). 
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2 including on-site and off-site analysis of banks, the FMA is tasked with decision-making and has 
therefore been designated as the competent authorit y in the area of banking supervision. The FMA 
is the national competent authority (NCA) w ithin the SSM framework and the addressee of 
instructions issued by the ECB under Article 6(3) of the SSM Regulation. 
1.2 In connection with the macroprudential tasks a nd tools under Article 5 of the SSM Regulation, the 
draft law obliges the FMA to notify the Austrian Fi nancial Market Stability Board (FMSB) prior to 
proposing, to the ECB, the application of higher requirements for capital buffers under Article 5(2) 
and (3) of the SSM Regulation. The FMA is to give the FMSB the opportunity to make a recommendation within a reasonable period of time. If the FMA does not comply with this recommendation, it must provide reasons to the FM SB. A similar obligation to notify arises if the 
ECB informs the FMA of its intention to appl y higher requirements for capital buffers in 
accordance with Article 5(2) of the SSM Regulation.  Moreover, the FMA is to notify the FMSB if, 
under Article 5(4) of the SSM Regulation, the ECB raises objections to planned decisions by the 
FMA to apply higher requirements for capital bu ffers, including countercyclical buffer rates and 
any other measures aimed at addressing systemic or macroprudential risks. 
1.3 The draft law clarifies the division of tasks within the SSM between the FMA and the OeNB, on 
the one hand, and the ECB on the other hand. To th is end, the draft law provides that the FMA and 
the OeNB are only required to execute tasks, powers and duties assigned to them under the Law on 
banking to the extent that the execution of sa me is not reserved for the ECB under the SSM 
Regulation
6. Furthermore, the draft law clarifies th at the procedures outlined by the Law on 
banking shall not apply to the ECB in connection with the application of national legislation by the ECB in the area of banking supervision, as provide d for by Article 4(3) of the SSM Regulation
7. In 
order to effectively carry out the tasks and power s assigned to them within the scope of the SSM, 
the FMA and the OeNB must also coordinate their activities within the SSM and provide each 
other with all information, appli cations and requests without delay8. 
1.4. The draft law also sets out the partial disc ontinuation of the obligation on both the FMA and the 
OeNB to input data into a shared national supe rvisory database established by the OeNB under the 
Law on banking9. Within the scope of the SSM, the ECB will also operate a database for banking 
supervision purposes. According to the explanator y memorandum to the draft law, the data to be 
entered into the ECB database will overlap with the data to be entered into the national database. 
The Austrian Ministry of Finance considers that , with the commencement of the SSM, there will no 
longer be any need to input data into the national database if it has alread y been entered into the 
ECB database. Accordingly, the draft law provi des that the FMA and the OeNB are no longer 
obliged to input overlapping data in to the national database, provided  that the data stored in the 
                                                 
6  See Article 1(74) of the draft law, which introduces Article 77d(1) to the Law on banking. 
7  See Article 1(74) of the draft law, which introduces Article 77d(2) to the Law on banking. 
8  See Article 1(74) of the draft law, which introduces Article 77d(3) to the Law on banking. 
9  See Article 1(74) of the draft law, which introduces Article 77d(4) to the Law on banking. 
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3 ECB database is accessible by both th e FMA and the OeNB at any time. 
1.5 The SSM Regulation provides for the ECB’s par ticipation in supplementary supervision of a 
financial conglomerate in relation to the credit institutions included therein10. Accordingly, 
Article 4 of the draft law clarifies that the scope of the tasks and powers assigned to the FMA by the Law on financial conglomerates
11 is to be confined within th e scope of the SSM Regulation. 
The FMA is only required to carry  out the tasks, powers and duties that are assigned to it under the 
Law on financial conglomerates to the extent that the execution of same is not reserved to the ECB 
under the SSM Regulation. 
1.6 The draft law restricts federal state liability for damage caused by the FMA when cooperating with, 
exchanging information with and supporting the ECB in relation to the SSM Regulation. This also 
applies to the FMA’s involvement in the E CB’s decision-making process and in the ECB’s 
preparations under the SSM Regulation. In the Austrian Ministry of Finance’s opinion, as 
expressed in the explanatory memorandum to the draft law, the transfer of special tasks to the ECB 
under Article 127(6) of the Treaty and under the SSM  Regulation represents an objective reason for 
the express exemption from liability for damage caused  by national authorities, to the extent that 
this may arise at all, as well as the fact that the ECB has a specific liability under Article 340 of the 
Treaty. The ECB notes that, in accord ance with the wording of draft Article 3(6) of the Law on the 
Financial Market Authority (as introduced by Artic le 5 of the draft law a nd as amended by a draft 
bill tabled in Parliament on 3 June 201412), a claim for compensation is to be excluded in respect of 
damage caused by acts of the FMA, incl uding its executive bodies and employees, when 
implementing or fulfilling an instruction of the EC B, preparing or executing decisions of the ECB, 
and when cooperating with, exchanging informatio n with and providing other support for the ECB. 
For the OeNB, its executive bodies and employees, an identical exemption from liability has been 
included in draft Article 79(7) of the Law on banking, as introduced by Article 1(114) of the draft law. The ECB understands that according to Ar ticle 3 of the Law on the Financial Market 
Authority, the Austrian Federation is currently liable, pursuant to the provisions of the Law on public liability
13, for damage caused by bodies within the FMA and by FMA employees when 
enforcing, inter alia, the Law on banking and th e Law on financial conglomerates. Such liability 
only exists in relation to supervi sed institutions and third parties, e.g. depositors may not claim any 
compensation from the Austrian Federation14. However, federal state liability is not limited to 
intent or gross negligence. The Austrian Federa tion is entitled to claim reimbursement from those 
persons acting as agents of the FMA in committing or causing a violation of the law with intent or gross negligence, provided it has indemnified the in jured person under the provisions of the Law on 
                                                 
10  See Article 4(1)(h) of the SSM Regulation. 
11  See Article 12a of the La w on financial conglomerates. 
12  Regierungsvorlage 162 der Beilagen zu den Sten ographischen Protokollen de s Nationalrates XXV. GP. 
13  Bundesgesetz über die Haftung der Gebietskörperschaften und der sonstigen Körperschaften und Anstalten des öffentli-
chen Rechts für in Vollziehung der Gesetze zugefügte Schä den (Amtshaftungsgesetz), BGBl 20/1949, as amended. 
14  See Article 3(1) of the Law on the Financial Market Authority. 
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4 public liability15. 
 2. General observations The ECB takes note that the draft law aims to smoothly integrate the Austrian national banking 
supervisory structure into the SSM and to ensure  that no legal obstacles arise under national law in 
relation to the performance by the ECB, with the ass istance of the NCA, of its banking supervisory tasks 
under the SSM Regulation
16. The ECB understands that the rules ar e not intended to narrow or amend the 
scope of the SSM Regulation, which is directly applicable. 
 3.  Macroprudential tasks and tools 3.1 Article 1(31) of the draft law which, inter a lia, inserts a new Article 24b(3) into the Law on 
banking, contains two incorrect references. Th e reference to Article 5(4) seems erroneous; 
reference should be made to Article 5(1) of th e SSM Regulation as only this provision provides the 
ECB with the right to object to an intended nati onal macroprudential decision under Article 5(1) of 
the SSM Regulation. Furthermore, the second refere nce to Article 23c appears to be in error and 
should be replaced by Article ‘23d’. 
3.2 In addition to the FMA (in its role as NCA), the FMSB is also involved in the application of 
macroprudential tasks and tools pursuant to Article  5 of the SSM Regulation. The ECB understands 
that the FMSB has been established within the Au strian Ministry of Finance to promote financial 
market stability, reduce systemic threat and lower systemic and pro-cyclical risks
17. While the 
FMSB is involved in macroprude ntial oversight issues under the SSM Regulation due to the 
FMSB’s national tasks, the ECB also highlights th e tight time frame under Article 5(4) of the SSM 
Regulation. If the ECB intends to apply higher national capital buffers and duly notifies the FMA 
ten working days prior to taking such action, the FMA may provide a reasoned written objection to 
the ECB within five working days. The ECB takes note of the amendment made by the draft law to 
Article 24b(2) of the Law on banking accordin g to which the FMSB is to provide its 
recommendation to the FMA ‘in compliance with the time limit indicated in Article 5(4) of Regulation (EU) No 1024/2013’. The ECB understands  that the time limit for the FMA’s response 
to the ECB’s notification under Article 5(2) of the SSM Regulation will not be delayed by the 
FMA’s consultation with the FMSB. 
 
                                                 
15  See Article 3(3) of the Law on the Financial Market Authority. 
16  See Article 6 of the SSM Regulation.  
17  See Article 13 of the Law on the Financial Ma rket Authority. 
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5 4.  Procedural issues 
It is essential for the smooth functioning of the SSM  that there is full cooperation between the ECB and 
the NCAs and that they exchange all information that  may have an impact on their respective tasks, in 
particular all information that the NCAs avail of regarding procedures that may have an impact on the 
safety and soundness of a supervised entity or that inte ract with the supervisory procedures in relation to 
such entities18. Against this background, the ECB welcomes th at the consulting authority aims to clarify 
the extent of the NCA’s competence under the SSM Regulation. The ECB also supports the fact that the 
draft law excludes the ECB from the application of pr ocedural laws when applying national legislation 
exercising Member State options under Union law19. Due to the dual banking supervisory structure in 
Austria, it is important to ensure that the FMA a nd the OeNB coordinate their activities within the SSM 
and provide each other with all information,  applications and requests without delay. 
 5.  Restrictions on federal state liability  5.1 The ECB understands that it is in principle a matter for Austrian national law to determine the 
scope of the federal state liability of the FMA a nd the OeNB for damage caused by their acts and 
omissions, including the acts and omissions of their executive bodies and employees. The ECB recognises that the liability of NCAs is not ha rmonised across the Union and that different 
supervisory liability regimes may presently exist at national level. The ECB, itself, is liable for the 
acts of its servants pursuant to Article 340 of the Treaty. Moreover, existing decisions of the Court of Justice of the European Union (CJEU) appear  to provide scope for a restriction of national 
liability where the NCA is merely required to implement a binding instruction of a Union institution without any margin of discretion
20. On the other hand, NCAs may be liable for their 
actions within the SSM framework where an availa ble margin of discretion is in fact exercised21. 
Accordingly, the Union legislator has clarified in  recital 61 of the SSM Regulation that the ECB’s 
liability in relation to actions undertaken within  the SSM framework ‘should be without prejudice 
to the liability of national competent authorities to make good any damage caused by them or by their servants in the performance of their duti es in accordance with national legislation’.  
5.2 The wording of draft Article 3(6) of the Law on the Financial Market Authority and draft Article 
79(7) of the Law on banking could be understood as effectively placi ng liability for damage caused 
by the acts and omissions of the FMA and the OeNB, including their executive bodies and 
employees, occurring within the SSM framework, ex clusively and categorically on the ECB in all 
                                                 
18  See recital 11 of Regulation (EU) No 468/2014 of the Europ ean Central Bank of 16 April 2014 establishing the frame-
work for cooperation within the Single Supervisory Mechan ism between the European Central Bank and national compe-
tent authorities and with national designated authoritie s (SSM Framework Regulation) (ECB/2014/17) (OJ L 141, 
14.5.2014, p. 1). 
19  See, for example, Article 4(3) of the SSM Regulation. 
20  See, for example, Case 175/84 Krohn v Commission  [1986] ECR 753, paragraph 23. 
21  See Case T-146/01 DLD Trading v Council  [2003] ECR II-6005, paragraphs 79 to 80. 
ECB-PUBLIC 
6 cases. This could lead to an unclear legal situati on with the potential of negatively impacting on the 
efficient and effective functioning of the SSM, in pa rticular having regard to the direct applicability 
of the SSM Regulation. Therefore, it would be advisab le to amend the part of Article 5 of the draft 
law that introduces the new Article 3(6) to the Law on the Financial Market Authority, as well as 
draft Article 79(7) of the Law on banking, in order to ensure that the proposed exemptions from the 
national liability framework are in compliance with  Union law and are without prejudice to the 
allocation of liability under the SSM framework.  
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 23 June 2014.  
[signed] 
 
The President of the ECB 
Mario DRAGHI