EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 20 July 2015  
on recovery and resolution of credit institutions and investment firms  
(CON/20 15/25) 
 
Introduction and legal basis  
On 19 July 2015 the European Central Bank (ECB) received a request from the Greek Minist ry of Finance 
(MoF) for an opinion on a draft law on the recovery and resolution of credit institutions and investment 
firms1 (hereinafter the ‘draft law’).  The MoF asked for the adoption of the ECB’s opinion on an urgent 
basis.  
The ECB’s competence to del iver an opinion is based on Articles  127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and on the third and sixth indents of A rticle  2(1) of Council 
Decision  98/415/EC2, as the draft law relates to the Bank of Greece and to rules app licable to financial 
institutions insofar as they materially influence the stability of financial institutions and markets. For 
elements of the draft law the exclusive purpose of which is the transposition of Union law, the ECB’s competence to deliver an opinion is based on Article 25.1 of the Statute of the European System of 
Central Banks and of the European Central Bank. 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 purpose of the draft law is to implement into Greek law Directive 2014/59/EU of the European 
Parliament and of the Council (the Bank Recovery and Resolution Directive, or ‘BRRD’)
3, thereby 
aligning t he Greek legal framework for the recovery and resolution of certain types of entities active 
in financial markets, including credit institutions, investment firms, and financial holding companies that have their head office in Greece with the existing Unio n legislation in this field.  
1.2 Greece has enacted comprehensive legislation that introduced mechanisms to resolve failing 
institutions since 2011, prior to the adoption of the BRRD
4, on which the ECB has been consulted5. 
                                                 
1  Draft law on the recovery and resolution of credit institutions and investment firms (transposition of Directive 
2014/59/EU) and other provisions.  
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) . 
3  Directive 2014/59/EU of the European Parliament and of the Council 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).
 
4  See Articles 19, 62, 145 et seq.  of Law 4261/2014 (former ly Law 3601/2007) and secondary legislation, Decisions of 
the Credit and Insurance Committee No 21/4.11.2011,  77/30.5.2013 . 
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2 This framework authorised the Greek resolution and supervisory authorities to take action in order 
to prevent systemic crises, protect depositors, safeguard public confidence in the banking system 
and promote financial stability. Following the establishment of the new European framework for the recovery and resolution of credit institutions and investment firms it was necessary to replace the 
existing Greek legislation with a new framework addressing in a uniform manner all issues 
associated with the potential failure of financial sector enti ties. 
1.3 The draft law comprises 20 chapters which in particular  regulate the preparation of recovery and 
resolution plans, the provision of intragroup financial support, the exercise of early intervention 
powers, the adoption of resolution measures and their  objectives, the powers of the resolution 
authorities, the provision of public financial support, the protection of the rights of shareholders and 
creditors in the context of resolution, and the use of resolution financing arrangements. The draft 
law also introduces necessary amendments to relevant existing legislation in order to ensure its  
compatibility with the new framework.  
1.4 The main provisions of the draft law are as follows : 
- The Bank of Greece, which is  the national  competent authority for supervising Greek credit 
institutions , in accordance with Regulation (EU) 575/2013
6 (the Capital Requirements 
Regulation, or  ‘CRR ’) and Council Regulation 1024/20137 (the ‘SSM Regulation’) , is 
designated as the national resolution authority for those institutions ; and the Hellenic Capital 
Markets Commission, which is  the competent authority for supervising Greek investment 
firms, is designated as the national resolution authority for those firms. The Greek resolution 
authorities shall exercise their resolution tasks s eparately and independently from their 
supervisory tasks8.  
- The MoF is designated as the competent ministry under the draft law. The resolution 
authorities are required to inform the MoF  of their decisions pursuant to the draft law and 
have its consent bef ore adopting any decision:  (a) to transfer to a purchaser  shares or other 
ownership instruments issued by an institution under resolution,  or all or any assets, rights or 
liabilities of an institution under resolution under the sale of business tool9; (b) to transfer to a 
bridge institution shares or other ownership instruments issued by an institution under 
resolution , or all or any assets, rights or liabilities of an institution under resolution under  the 
bridge institution tool10; (c) to transfer assets, rights or liabilities and contractual 
arrangements of an institution under resolution or a bridge institution to one or more asset 
                                                                                                                                                             
5  See Opinions CON/ 2011/72, CON/2011/107, CON/2012/14, CON/2012/25 and CON/2012/39.  All ECB opinions are 
available on the ECB website at www.ecb.europa.eu.  
6  Regulation (EU) No. 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential 
requirement s for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 
27.6.2013, p. 1).  
7  Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank 
concerning policies relat ing to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p.  63). 
8  See Article 4(10)  of Law 4261/2014 implementing Article 4(7) of Directive No. 2013/36/EU of the European 
Parliament and of the Council of 26 June 2013 on access to t he activity of credit institutions and the prudential 
supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 
2006/48/EC and 2006/49/EC  (CRDIV ) (OJ L 176, 27.6.2013, p. 338) . 
9  See Article 38(1)  of the draft law.  
10  See Article 40( 1) of the draft law.  
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3 management vehicles under the asset separation tool11; (d) to give effect to the bail -in tool12; 
(e) to make a determination that, unless the write down or conversion power is exercised in 
relation to a subsidiary, the group will no longer be viable; and ( f) having  a direct fiscal 
impact  or systemic  implications . 
- Competent authorities (as defined in the C RR13) are authorised to adopt early intervention 
measures and to appoint a commissioner  in cases where there is a significant deterioration 
in a credit institution’s  financial situation or where there are serious infringements of law, 
regulations or the statutes of the institution, or serious administrative irregularities.  The 
commissioner ’s expenses must be  covered by the c redit institution . However in cases where 
the credit institution is not able to discharge such obligations , the Bank of Greece must  step 
in to cover the expenses14. The Bank of Greece will have a claim against the institution in 
accordance with Article 55E of its Statute.  
- Resolution authorities may apply four resolution tools individually or in combination. These 
tools are the sale of business tool , the bridge insti tution tool , the asset separation tool , and 
the bail -in tool.  It is worth noting that the provisions on the bail -in tool , along with the power s 
of write down and conversion  associated with the bail -in tool , will be applicable in Greece  
only from 1 January 201615. 
- When exercising their powers, the resolution authorities are required to ensure the full 
protection of the deposits of the Greek State in any appropriate way.  
- The bridge institution shall be a legal person wholly or partially owned by one or more public 
authorities , which may include the resolution financing arrangement or the resolution 
authority , and shall be controlled by the resolution authority. In this respect, the draft law 
deviates from the existing resolution framework which provides that a bridge institution shall 
be owned and controlled by the Hellenic Financial Stability Fund  (HFSF)16. 
- Public financial support may be provided through the adoption of the public equity support 
tool or the temporary public ownership tool . 
- In accordance with the no creditor worse off principle, shareholders or creditors that have 
incurred greater losses in a resolution than they would have incurred in a winding- up under 
normal insolvency proceedings are entitled to the payment of the difference from the resoluti on financing arrangement.  
- Procedural requirements are established to ensure that resolution actions are properly 
notified and that resolution authorities are subject to an adequate confidentiality regime. 
Resolution authorities, competent authorities and t he MoF  are also required to provide one 
                                                 
11  See Article 42(1)  of the draft law.  
12  See Article 43(1)  of the draft law.  
13   Article 2, point 5 of the draft law . 
14   Article 137 of Law 4261/2014 as amended by A rticle 120 of the draft law . 
15  Article 132(1) of the draft law . 
16  The exercise of shareholder rights in bridge institutions is one of the HFSF’ s tasks under Article 2  of the HFSF 
Statute (Law 3864/2010).   
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4 another upon request with all the information relevant for the other authority to carry out its  
tasks.  
- The Resolution Branch of the Deposit Guarantee Scheme is designated as the resolution 
financing arrangement for c redit institutions. The Resolution Branch of the Investment 
Guarantee Fund is designated as the resolution arrangement for investment firms.  
- Competent authorities and resolution authorities are authorised to impose administrative measures and administrati ve sanctions.  
- With regard to the a ppointment of a commissioner
17, as outlined above, where the removal 
of the senior management or the executive board of an institution is deemed to be 
insufficient to restore that institution’s  financial situation, the competent authority may appoint 
one or more commissioners  to the institution. This complements the framework under which 
the commissioners  are appointed18. 
- The civil liability of resolution authorities towards third parties for actions or omissions in the 
performance of their duties under the draft law is  limited to gross negligence and wilful 
misconduct. Resolution authorities are liable for damages  suffered as a result of a decision 
that was annulled19. The civil liability of the governor, the deputy governors,  all members of 
collective bodies and members of staff of the Bank of Greece towards third parties  for 
actions or omissions in the performance of their duties related to any competence  exercised 
by the Bank of Greece in its capacity  as a public authority  has been amended. The new 
provision will expose these officers and staff of the Bank of Greece to liability  not only for 
wilful misconduct , but also for gross negligence20. 
- The ranking of creditors in the context of any future special liquidation of credit i nstitutions 
has been amended so as to rank claims in the following order21: (a) preferential claims 
arising out of insolvency proceedings22 and clai ms in case the public equity support tool or 
the temporary public ownership tool are exercised23; (b) claims ar ising out of deposits 
guaranteed under the deposit guarantee scheme;  (c) general claims of the State;  (d) the 
following claims will be satisfied o n a pro- rata basis : (i) claims of the  Resolution Fund, 
(ii) deposits above the guaranteed threshold for private individuals and micro, small and 
medium -sized enterprises ; and (e) claims arising out guaranteed investment services.  
 
2. General observations  
2.1 The draft law arises out of  the Euro Summit Statement of 12 July 2015, pursuant to which the 
Greek author ities committed to enact a series of measures  by 22 July , including the transposition of 
                                                 
17  Article 29 of the draft law and amendments to Article 137 of Law 4261/2014.  
18  Article 137 of Law 4261/2014,  as amended by the draft law . 
19  Article 110(3)  of the draft law.  
20  Amendment to Article 62(4) of Law 4261/2014.  
21  Article 120 of the draft law, inserting a new Article 145a in Law 4261/2014.  
22  Article 154 of the Insolvency Code . 
23  Under A rticles 57 and 58 of the draft law  respectively.  
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5 the BRRD, with support from the European Commission.   
2.2 The ECB would like to stress that, given the very short time in which it has considered this 
important legisl ation, it has not been possible to assess all of the many legal and regulatory issues 
which this draft law undoubtedly raises.  
2.3 The ECB welcomes the draft law, as it strengthens the tools and procedures available to the Bank 
of Greece to carry out  effec tive preventive, early intervention and effective resolution measures in 
line with the common framework of intervention powers, rules and procedures laid down in the 
BRRD.  
2.4  The ECB stresses, however, that it does not opine on whether the draft law effectively discharges 
the obligations of the Greek State to implement the BRRD in Greek law . Rather , the ECB focuses 
primarily  on those provisions that may impact on the role and tasks of the Bank of Greece as a 
central bank and as a member of the European Sy stem of Central Banks (ESCB).  
2.5 It is worth noting that t he ECB has developed guidance, in the form of general and specific 
considerations, on the basis of which it may decide whether a new task conferred on an ESCB 
national central bank (NCB) is to be c onsidered a central banking task or a government task for the 
purposes of assessing such conferral against the prohibition of monetary financing under 
Article  123 of the Treaty24. This guidance applies to genuinely new tasks that either did not exist in 
the past or did not form an integral part of the central banking tasks assigned to the NCB in the 
past. The tasks currently discharged by an NCB  as central banking tasks are not reviewed and re-
categorised, but may be reassessed if they are subject to legislative amendments of substance.  
The ECB has clarified that resolution tasks can be considered central banking tasks , provided that 
they do not undermine an NCB’s independence in accordance with Article 130 of the Treaty25. In 
this respect, i t is not ed that th e Bank of Greece h as already been conferred with extensive powers 
to take specific resolution measures vis -à-vis credit institutions since 201126. Hence, the draft law  
does not constitute a substantive change in the supervisory, financial stability, and res olution tasks 
carried out by the Bank of Greece and is expected to have a limited  impact on the overall functions 
carried out by it.  
2.6 It is clear that the draft law  does  not authorise the Bank of Greece to provide any loan or financing 
under any circums tance to the Resolution Fund27. The provision of such financing to the Resolution 
Fund would constitute a government task, and any such loan or financing by the Bank of Greece  
would therefore breach the prohibition of monetary financing under the Treaty28.  
 
                                                 
24  See Opinion CON/2015/22.   
25  See paragraph 2.3.2 of Opinion CON/2015/22. This position departs from the one set out in Opinions CON/2015/3 
and CON/2015/2.  
26  ibid. See also Opinion CON/2011/ 72. 
27  Article 18(3)(b) of the draft law.  
28  ibid. 
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6 3. Specific observations  
3.1 Consent of the MoF  
3.1.1  The ECB notes that the Resolution Committee of the Bank of Greece is required, before deciding 
to take a resolution measure, to obtain the prior consent  of the MoF  in a broad range of 
circumstances.  This provision purports to implement Article 3(6) of the BRRD.  However, by 
requiring the MoF’s prior consent  for all decisions pertaining to the sale of a business, the setting-
up of a bridge bank, asset separation, bail -in, write down or conversion29, regard less of whether 
they have a direct fiscal impact or systemic implication, the draft law seems to go beyond Article 
3(6) of  the BRRD.  Further, it is important that the Bank of Greece should have ultimate control over 
any decision related to a resolution mat ter that could affect the Bank of Greece’s financial 
independence30. 
3.1.2  Moreover, in requiring the Bank of Greece as the resolution authority to obtain the MoF’s prior 
consent  before taking resolution actions in a broad range of circumstances, the quest ion arises as 
to whether the MoF may be considered to be a second resolution authority alongside the Bank of 
Greece. The consulting authority is invited to consider whether  the MoF’ s prior consent  should be  
more appropriately limited to those cases in whic h the resolution measures have a direct fiscal 
impact or systemic implications , as required by Article 3(6) of the BRRD . This would avoid the MoF 
acting de facto as a joint resolution authority alongside the Bank of Greece, since if this were the 
case the MoF would need to ensure the operational independence of its resolution function31. 
3.2  Conflicts of interests with other  tasks of the Bank of Greece  
3.2.1  The ECB has repeatedly noted32 that, in line with the BRRD33, staff involved in carrying out the 
functions of a resolution authority in accordance with the Directive must be structurally separate 
and subject to separate reporting lines from thos e involved in carrying out prudential banking 
supervision tasks pursuant to applicable EU legal acts34 or with regard to the other functions of the 
relevant authority. The BRRD ‘exceptionally’ allows one authority to carry out both resolution and 
supervisory functions on the condition that adequate structural arrangements are put in place in 
order to ensure operation al independence and to avoid conflicts of interest between that authority’s 
resolution function and its other functions. For example, the BRRD envisages structural separation 
being achieved by keeping the reporting lines for staff involved in carrying out resolution tasks 
separate from those used by staff involved in supervision activities35. That separation should not, 
however, prevent the resolution function from having access to any necessary information which is 
available to the supervisory function36. 
                                                 
29  See Articles  38(1), 40(1), 42(1),  43(1) and 59(7) of the draft law.  
30  See paragraph 3.3 of Opinion CON/2015/2 and paragraph 3.2.2 of  Opinion CON/2015/22.  
31  See paragraph 3.3 of Opinion CON/2015/22.  
32  See paragraph 3.2.6 of Opinion CON/2015/ 22, paragraph 4.3 of Opinion CON/2015/2, paragraphs 5.1 and 5.2 of  
Opinion CON/2015/3 and paragraph 3.1 of Opinion CON/2014/67.  
33  See the second subparagraph of Article 3(3) BRRD.  
34  See the CRR ; and CRDIV . 
35  See paragraph 3.1 of Opinion CON/2014/67.  
36  See paragraph 4 of Opinion CON/2015/2.  
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7 3.2.2 Pursuant to  existing law and the draft law, the Bank of Greece is required to ensure the operational 
and organisational independence of the department carrying out resolution functions and its staff to 
ensure there is no conflict of interest and to provide for the separation of tasks relating to the resolution function from the Bank of Greece’s other tasks . The ECB welcomes these provisions, as 
they appear to adequately address potential conflicts of interest between the resolution function 
and the Bank  of Greece’s  other tasks and functions.  
3.3  Liability of the Bank of Greece 
3.3.1  With regard to the provisions in the draft law on the liability of the Bank of Greece
37, the ECB notes 
that the Bank of Greece, as resolution authority, will now be held liable for gross negligence and wilful misconduct . It is not obvious why the Bank of Greece should assume the burden of those 
potential liabilities when the draft law requires it  to obtain prior consent  from the MoF before taking 
resolution actions in a broad range of circumstances
38. Against this backdrop, the ECB notes that, 
under the prohibition of monetary financing laid down in the Treaty, national legislation may not 
require an NCB to finance the public sector’s obligations vis -à-vis third parties39. Given  that 
potential liability issues represent substantial financial risks for the Bank of Greece40, this should be 
taken into account  in determining the entity that is liable to pay damages to third parties and in 
assessing the Bank of Greece’s ability  to recover its resolution- related expenses.  
3.3.2  The draft law contains provisions  on the personal liability of the members of the decision- making 
bodies and the staff of the Bank of Greece. There may be concerns as to the proportionality of 
such liability, in particular, given that staff of other Greek public authorities  are not subject to such 
personal liability in relation to third parties41. 
3.4  Ownership of bridge institutions and asset management vehicles  
3.4.1  With regard to the bridge institution tool and the asset separation tool, the draft law sets out that the 
bridge institution or asset management vehicle must be wholly or partially owned by one or more 
public authorities which may include the resolution authority or the Resolution Fund.  
3.4.2  While this provision implements the BRRD42, where a central bank acts as resolution authority, it 
should be clarified , for the avoidance of doubt, that the central bank will in no event assume or 
finance any obligation of these entities. A central bank’s role as owner of such an entity must 
remain consistent under all circumstances with the prohibition on monetary financing under Article 
123 of the Treaty, as supplemented by Council Regulation (EC) No 3603/9343. This prohibits, inter 
alia, any financing by a central bank of the public sector’s obligations vis -à-vis third parties. 
Moreover, this role must be performed without prejudice to central bank independence, in particular 
                                                 
37  Article 72(4) of the draft law.  
38  See paragraph 3.2.10 of Opinion CON/2015/22.  
39  See the ECB’s 2014 Convergence Report, p. 29.  
40  See paragraph 3.2.9.3 of Opinion CON/2015/22.  
41  See Article 38 of the Civil Servants Code (Law 3528/2007) .  
42  See Articles 40(2)(a) and 42(2)(a) BRRD.  
43  Council Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the 
prohibitions referred to in Artic les 104 and 104b (1) of the Treaty (OJ L 332 , 31.12.1993, p. 1).  
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8 its financial and institutional independence44. The principle of financial independence requires 
NCBs to have sufficient means to carry out not only their ESCB -related tasks from an operational 
and financial point of view, but also their national tasks45. For that reason, it should be ensured that  
if the Bank of Greece, as resolution authority, decides to become owner of such an entity, it is 
provided with sufficient financial and human resources to address the operational burden 
associated with it.  
3.4.3  It is also worth noting that under the existing law, the HFSF is conferred with the role of 
shareholder of bridge institutions, and may be best placed in terms of expertise and resources to 
exercise the role of shareholder of bridge institutions and asset management vehicles under the draft law . 
3.5 Cooperation and exchange of information between  the Bank of Greece and other relevant 
authorities, including the Hellenic Capital Markets Commission  
3.5.1 The ECB notes that the draft law provides  for cooperation between the Bank of Greece, which is 
the resolution authority for credit institutions , and other relevant authorities, including the Hellenic 
Capital Markets Commission, which is the resolution authority for investment firms , in performing 
their respective tasks, each keeping in mind the impact of their performance on the other.  
3.5.2 The ECB welcomes these  provisions as they will enable the relevant entities to perform their 
statutory tasks in a coordinated fashion. In particular, they  will facilitate the Bank of Greece’s 
performance of its financial stability mandate. Such arrangements are al so in line with current ECB 
doctrine and the requirements under the BRRD , pursuant to which Member States must ensure 
that, where the central bank is not itself the resolution authority, the competent authority (i.e. the authority responsible for the prude ntial supervision of institutions) and the resolution authority 
engage in an adequate exchange of information with the NCB
46. 
3.6 Resolution planning  
The draft law  provides that recovery plans and resolution plans drawn up and maintained by an 
institution s hall not assume any access to or entitlement to extraordinary public financial support 
beyond that granted by the R esolution Fund. However, they shall include, where applicable, a 
forward- looking analysis of how and when an institution may apply for the us e of central bank 
liquidity in stressed conditions and what collateral is to be used i n respect of such47. While these 
provisions appear to be in line with the requirements of the BRRD, the ECB emphasises that they do not in any way affect the competence of  the Eurosystem to decide independently and in its full 
discretion on the provision of central bank liquidity, based on the existing legal framework and  
within the limitations imposed by the monetary financing prohibition under the Treaty
48. 
                                                 
44  See paragraph 3.3 of Opinion CON/2012/99, paragraph 5 of Opinion CON/2011/84 and paragraph 3.6 of Opinion 
CON/2011/39.  
45  See the ECB’s 2014 Convergence Report, p. 25.  
46  See paragraph 3. 1 of Opinion CON/2012/99.  
47  Article 18( 4) of the draft law . 
48  See paragraph 3.2 of Opinion CON/2012/99,  paragraph 3.3 of Opinion CON/2014/67 and paragraph 3.4 of Opinion 
CON/2015/22.  
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9 3.7 Withdrawal of authorisation  
With regard to Article 32(5) of the draft law, the SSM Regulation confers on the ECB the power to 
withdraw a credit institution’s  authorisation. This applies both to institutions under the ECB’s  direct 
supervision and to institutions under  the supervision of the Bank of Greece. The drafting of 
Article  32(5) of the draft law should be clarified to reflect this.  
 
This opinion will be published on the ECB’s website.  
  Done at Frankfurt am Main,  20 July 2015.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI