EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 23 July 2012 
on a stabilisation fund for banks 
(CON/2012/58) 
 
Introduction and legal basis 
On 19 June 2012, the European Central Bank (ECB) received a request from the Polish Minister for 
Finance for an opinion on a draft law amending the Law on the Bank Guarantee Fund and certain other laws (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/EC of 29 June 1998 on the consulta tion of the European Central Bank by national 
authorities regarding draft legislative provisions
1, as the draft law relates to the Narodowy Bank Polski 
(NBP) and to rules applicable to fi nancial 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, the Governing Council has adopted this opinion.  
 1.  Purpose of the draft law 1.1 The draft law aims at enhancing the Polish framewo rk for crisis management in the financial sector 
by establishing an industry-funded stabilisation f und for credit institutions, formed as a sub-fund 
under the management of the Bank Guarantee F und (‘BFG’), the operator of the Polish deposit 
guarantee scheme
2. An existing BFG sub-fund, which is de dicated to providing assistance to the 
banks covered by the deposit guarantee scheme, wi ll continue to exist in parallel to the newly-
created fund3.  
                                                 
1 OJ L 189, 3.7.1998, p. 42. 
2 To this end the draft law amends (a) the Law of 14 D ecember 1994 on the Bank Guarantee Fund, consolidated text 
published in  Dziennik Ustaw  (Dz. U.) of 2009 No 84, item 711 (hereina fter the ‘Law on BFG’); and (b) the Law of 
12 February 2010 on the recapitalisation of certain financial institutions, Dz. U. of 2010 No 40, item 226 (hereinafter ‘the 
Law on recapitalisation’). 
3  According to Article 4(2)(1) and (1a) in connection with Articles 19 and 20 of the Law on BFG, the existing assistance 
fund is used by the BFG to provide the entities covered by  the obligatory deposit guarantee scheme with returnable 
financial assistance (in the case of an insolvency threat or for the acquisition of banks’ shares), and for acquiring claims 
of banks threatened with insolvency. See also paragraphs  32(2) and 34 of the BFG’s Statute as introduced by the 
Regulation of the Minister for Finance of 14 September 2009 on establishing the Statute of the Bank Guarantee Fund 
(Dz. U. of 2009 No 164, item 1308). 
ECB-PUBLIC  
2 1.2 The proposed sources of financing of the stabili sation fund include: (a) a pre-defined proportion of 
the mandatory annual contributions of instituti ons covered by the obligatory deposit guarantee 
scheme; and (b) a one-off payment to be made by th ose institutions in the year of the draft law’s 
entry into force. The funds in the stabilisation fund  will primarily be used to finance or co-finance 
recapitalisation guarantees granted in accordance with the Law on recapitalisation and will be 
subject mutatis mutandis  to the application of the relevant  procedures and modalities laid down in 
that Law4. Moreover, the draft law expands the list of  eligible securities in which available BFG 
funds (not limited to those in the stabilisation f und) may be invested to include securities issued or 
guaranteed by governments or central banks of, inter alia , Union Member States5. 
1.3  In addition, the draft law amends informati on-sharing arrangements by: (a) enabling the NBP to 
effectively obtain from the BFG any information n ecessary for it to fulfil its financial stability 
mandate and introducing reciprocity6; and (b) enabling the sharing of  relevant information between 
the Polish Financial Supervision Authority and the BFG7. Finally, the draft law expands the 
membership of the Financial Stability Committee8 to include the President of the BFG9.  
 2.  General observations 
Assistance measures that may be offered by th e BFG through the stabilisation fund are presently 
defined in the Law on recapitalisation as measures aiming to address solvency problems at a failing 
bank. The ECB understands that the Polish authorities contemplate further expansion of the role of 
the BFG
10 which may in the future perform functions  of a resolution authority designated under a 
harmonised Union framework11. The ECB supports this intention to implement a fully-fledged 
bank resolution regime, in which the designated authority uses resolution tools harmonised under 
Union law, offering legally sound means of reso lving non-viable institutions. The implementation 
                                                 
4  Under the Law on recapitalisation, a recapitalisation guarantee may be granted to a distressed financial institution by the 
Minister for Finance, resulting in the State Treasury acquiring shares, bonds or other debt instruments issued by the 
recapitalised financial institution in cases where such instrume nts are not acquired by market entities. See in this respect 
Opinion CON/2009/19 (all ECB opinions are published on the ECB’s website at www.ecb.europa.eu). According to new 
Article 6(2a) of the Law on recapitalisation, inserted by Articl e 4 of the draft law, the Minister for Finance, having taken 
a decision to grant a recapitalisation guarantee, may reques t the BFG to provide financing or co-financing of the 
guarantee from the stabilisation fund. 
5 See Article 16(3) of the Law on BFG, as ame nded by Article 1(5)(c) of the draft law.  
6 See Article 38(4a) of the Law on BFG, inse rted by Article 1(9) of the draft law. 
7 See Article 17a of the Law of 21 July 2006 on  financial market supervis ion, Dz. U. of 2008 No 209, item 1317, inserted 
by Article 2 of the draft law 
8 Established by the Law of 7 November 2008 on the Financial Stability Committee, Dz. U. of 2006 No 157, item 1119. 
The Financial Stability Committee is a body currently comprisi ng: the Minister for Finance (as Chairman), the President 
of NBP and the Chairman of the Financial Supervision Authority. It is responsible  for the fostering and protection of the 
stability of the national financial system through the exchange  of information and coordinati on of activities in this area. 
See also Opinion CON/2008/39. 
9 See Article 4(1) of the Law on the Financial Stability Committee, as amended by Article 3(2) of the draft law. 
10  See p. 11 of the draft law a nd its explanatory memorandum. 
11  See the proposal for a dir ective of the European Parliament and of the Council establishing a frame work for the recovery 
and resolution of credit institutions and investment firms and amending Council Directiv es 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) (hereinafter the ‘proposed bank resolution directive’).  
ECB-PUBLIC  
3 of such a harmonised framework would achieve th e objective of ensuring financial stability while 
preserving a level playing field, limiting distortions to competition, and addressing stakeholder rights. At the present stage, the ECB invites the Po lish authorities to adopt a flexible approach in 
this respect, capable to adapting to the evolving Union framework. 
 3.  Specific observations 3.1  Financing of the BFG’s function related to deposit guarantees  
 Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 on 
deposit-guarantee schemes
12 requires that deposit guarantee schem es should be in a position to pay 
duly verified claims by depositors in th e periods specified by this Directive13.This implies that the 
deposit guarantee schemes should have adequate financial means at their disposal to realise this 
objective14. A deposit guarantee scheme’s deposit guarantee role and its assistance role should be 
well separated. Therefore, the financial resour ces available for paying guaranteed deposits should 
be ring-fenced and, if necessary, only used to cove r the part of the assistan ce cost that indirectly 
ensures the depositors’ protection15. This is crucial to ensure that the objective of the deposit 
guarantee scheme is fully respected. In this co ntext, the ECB welcomes the fact that the 
recapitalisation guarantees will be granted by the BFG at its discretion16, solely on the basis of the 
funds explicitly allocated to the stabilisati on fund in accordance with its financing regime17. 
3.2 Financing of the BFG’s function related to bank resolution  
 In accordance with its previous opinions18, the ECB invites the Polish authorities to consider 
introducing rules for replenishing the funds in the st abilisation fund where part or all of such funds 
are used to finance recapitalisation measures.  
3.3 Compliance with the monetary financing prohibition  
 At the same time, the ECB reiterates its positi on concerning the limited conditions under which 
central bank credit may be provided to deposit gua rantee schemes without breaching the monetary 
financing prohibition contained in  Article 123 of the Treaty in connection with Council Regulation 
(EC) No 3603/9319. As pointed out in the ECB’s convergence reports20 and several opinions 
                                                 
12 OJ L 135, 31.5.1994, p. 5. 
13 See Article 10(1) of Directive 94/19/EC. 
14 See recital 23 of Directive 94/19/EC specifying that the fi nancing capacity of deposit guarantee sche mes must be in 
proportion to their liabilities; see also paragraph 2.5 of Opinion CON/2007/26. 
15  See the European System of Central Ba nks contribution to the Commission’s public  consultation on the technical details 
of a possible EU framework for bank recovery and resolution,  May 2011, p. 18; see also Article 99(1) of the proposed 
bank resolution directive. 
16 See new Article 20e(1) of the Law on BFG, inse rted by Article 1(8) of the draft law.  
17 See Articles 7(2)(5a)(b) and 20c(1) of the Law on BFG, as amended by Articles 1(3)(a) and 1(8) of the draft law, and 
Article 5(4) of the draft law. 
18  See paragraph 3.6 of Opinion CON/2011/29 and paragraph 2.4 of Opinion CON/2011/66.  
19  Council Regulation (EC) No 3603/93 of 13 December 1993 specifyi ng definitions for the application of the prohibitions 
referred to in Articles 104 and 104b(1) of  the Treaty (OJ L 332, 31.12.1993, p. 1).  
ECB-PUBLIC  
4 directed to the Polish authorities, the NBP may only  extend credit to the BFG where such credit is 
provided for a short term, addresses urgent situations , with systemic stability aspects being at stake, 
and with decisions remaining at NBP’s discretion21. Presently the Polish law complies with those 
conditions as it provides for a possible extension by the NBP, under its discretion, of short-term 
credit to the BFG related to the financing of its de posit guarantee function, if a threat to financial 
stability arises and in view of its urgent needs22. In line with its previously stated position23, the 
ECB considers that provision of central bank credit to the national deposit guarantee fund for 
purposes not related to pay-outs of guaranteed deposits , but related to its recapitalisation functions, 
would constitute central bank fi nancing of a public sector function in breach of the monetary 
financing prohibition24.The ECB understands that the draft law complies with the monetary 
financing prohibition, as the financing of assist ance measures conducted through the stabilisation 
fund (i.e. the recapitalisation functions) is not linked to the mechanism for the activation of 
guaranteed deposits described in Article 16a of the Law on BFG. Therefore, the ECB understands 
that such assistance measures will not be finan ced by way of central bank credit extended to the 
BFG.  
3.4 Information sharing arrangements 
 In view of its previous recommendations25, the ECB welcomes the proposed amendment of 
Article 38(4a) of the Law on BFG as this will gi ve the NBP access to prudential information 
possessed, inter alia , by the BFG, which will allow the NB P to properly perform its financial 
stability role. 
3.5 The ECB understands that the inclusion of the BFG President in the composition of the Financial 
Stability Committee aims to reflect the new financ ial stability tasks, which are explicitly assigned 
to the BFG under the draft law26 and which the BFG will perform vis-à-vis the banks covered by 
the obligatory deposit guarantee scheme. The ECB welcomes this development as it reflects the 
rising role of the BFG in the financial safety ne t of the Polish financial system and ensures the 
involvement in the Financial Stability Committee’s work of all relevant bodies, thereby facilitating 
effective exchange of information and c oordination of financial stability activities. 
 
                                                                                                                                                             
20  See, for example, the ECB’s Conv ergence Report of May 2012, p. 30. 
21  See paragraph 2.1 of Opinion CON/2007/26, paragraph 2. 2 of Opinion CON/2008/5 and paragraph 2.2 of Opinion 
CON/2008/32. 
22  See Article 43 of the Law on Narodowy Bank Polski of 29 August 1997 (consolidated text: Dz.U. of 1 April 2005 No 1, 
item 2) together with Article 16a(5) of the Law on BFG. See also paragraph 2 of Opinion CON/2010/64. 
23  Cf. paragraph 2.6 of Opinion CON/2008/32. 
24  Cf. Article 1(1)(ii)(b) of Regulation (EC) No 3603/93.  
25 See paragraph 3.2 of Opinion CON/2010/64.  
26 See new Article 4(4) of the Law on BFG, ad ded by Article 1(2)(b) of the draft law. 
ECB-PUBLIC  
5 This opinion will be published on the ECB’s website. 
  Done at Frankfurt am Main, 23 July 2012. 
 
[signed] 
 
The Vice-President of the ECB 
Vítor CONSTÂNCIO