EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 23 October 2015  
on the  preliminary assessment of conditions related to the resolution of  
credit institutions and investment firms  
(CON/20 15/38) 
 
Introduction and legal basis  
On 22 September  2015 the European Central Bank (ECB) received a request from the Magyar Nemzeti 
Bank  (MNB) for an opinion on the MNB ’s draft decree on the methodology for the preliminary assessment 
of the realisation of resolution objectives  (hereinafter the ‘draft decree ’). 
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 sixth indent of Article  2(1) of Council Decision 98/415/EC1, as 
the draft  decree relates to rules applicable to financial instituti ons insofar as they materially influence the 
stability of financial institutions and markets.  In accordance wit h 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 decree  
1.1 In 2014 t he Hungarian Parliament adopted Law XXXVII of 2014 related to the resolution of credit 
institutions and investment firms (hereinafter  the ‘Law on resolution’ )2 in order to transpose 
Directive 2014/59/EU of the European Parliament and of the Council3 into Hungarian law , in 
relation to which t he ECB adopted  Opinion CON/2014/624. The Law on resolution, inter alia,  lays 
down the conditions under which MNB , acting as a resolution authority , may initiate a resolution 
actio n5. One condition is that resolution has to serve the public  interest6. According to Article 17(5) 
of the Law on resolution7, a resolution action should be considered to be in the public interest  if: 
(a) it is necessary  for the achievement of , and is proportionate to one or more of the resolution 
objectives  referred to in the Law on resolution, and (b) winding up of the institution under normal 
insolvency proceedings would not meet those resolution objectives to the same extent . 
                                                 
1  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) . 
2  Published in Magyar Közlöny 2014/98.  
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
  All ECB opinions are published on the ECB’s website at www.ecb.europa.eu.  
5  Article 17(1) of the Law on resolution transposing Article 32(1) of Directive 2014/59/EU . 
6  Article 17(1) c) of the Law on resolution transposing Article 32(1) (c) of Directive 2014/59/EU . 
7  This provision t ranspos es Article 32(5) of Directive 2014/59/EU . 
ECB -PUBLIC  
2 1.2 Based on the powers dele gated to MNB’s  Governor by Article 145(2)( f) of the Law on resolution,  
the draft decree lays down specific criteria concerning each resolution objective listed in the Law on 
resolution , whereby the MNB examines the extent to which the concerned resolution objective can 
be better achieved through the winding up of an institution under normal insolvency proceedings or 
through resolution. The MNB assesses  with equal weighing,  both individually  and collectively , the 
expected level of the realisation  of the resolution objectives  and the public interest in accordance 
with the nature and circumstances of the given case.  The weight to be assigned to the public 
interest in this respect is not further specified i n the draft decree. O n this basis the MNB will decide 
whether the condition of acting in the public interest which is required to initiate a resolution,  is met. 
 
2. Observations  
2.1 In accordance with Article 1(2) of Council Decision 98/415/EC, this Opinion only addresses issues 
that go beyond the mere transpos ition of Directive 2014/59/EU  into Hungarian law.  The ECB also 
stresses that this Opinion does not constitute an assessment of whether Hungary has effectively 
discharged its obligations to implement Directive 2014/59/EU . 
2.2 The ECB welcomes that the MNB i ntends to enhance transparency and legal certainty for market 
participants by laying down criteria concerning resolution objectives , whereby the MNB examines 
the extent to which a resolution objective can be achieved through the winding up of an institution 
under normal insolvency proceedings and/or through resolution.  
2.3 The consulting authority may wish to consider however whether the draft decree might unduly 
constrain the MNB’s discretion as the resolution authority, beyond what is contemplated by 
Directive 2014/59/EU . 
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 23 October 2015.  
 
[signed]  
 The President of the ECB  
Mario DRAGHI