EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 26 November  2021   
on the modification  of Swiss franc loan  agreements 
(CON/20 21/36) 
 
Introduction and legal basis  
On 15 April 2021 the European Central Bank (ECB) received a request from the National Assembly of 
the Republic of Slovenia for an opinion on a draft law on relations between lenders and borrowers 
concerning credit agreements in Swiss francs (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/EC1, as the draft law relates to Banka Slov enije , rules applicable to financial institutions insofar 
as they materially influence the stability of financial institutions and markets , and the ECB’s tasks 
concerning the prudential supervision of credit institutions pursuant to Article 127(6) of the T reaty . 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 restructure consumer loans  denominated in Swiss francs 
(hereinafter ‘CHF’) or containing a currency clause in CHF  that were  concluded between 
28 June 2004 and 31 December 2010  (hereinafter ‘ Swiss franc loans ’).  
1.2 According to the explanatory memorandum  accompanying the draft law, t he draft law aims to 
place borrowers of Swiss franc  loans in a position to limit the ir exchange rate risk and to enable 
them to repay the ir loans under conditions that , according to the explanatory memorandum,  they 
could reasonably expect  when acting in good faith when concluding loan agreements2. The draft 
law further aims to protect consumers , prevent unfair business practices by credit institutions and 
prevent  a debt crisis3. 
1.3 To achieve these  aims , the draft law requires lenders to introduc e an exchange- rate cap clause 
in relation to all agreements for Swiss franc loans  concluded between 28 June 2004 and 
31 December  2010. Such an exchange rate cap will be activated when the change in the 
exchange rate causes:  (1) the actual credit balance to differ by more than 5% from the credit 
 
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  Explanatory memorandum no. 413 -01-1/2021/4 of 14 April 2021 (hereinafter the ‘explanatory memorandum’), p.  8. 
3 Explanatory memorandum, p. 8.  
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2 balance calculated based on the exchange  rate applicable at the date of drawdown; or (2) the 
actual instalment to differ by more than 5% from the instalment calculated based on the exchange  
rate applicable at the date of drawdown.  When the exchange rate cap is activated, the instalments 
and other payments based on the loan agreement are calculated taking into account the currency 
exchange rate at which the exchange rate cap is activated.  
1.4 The draft law requires lenders  – defined as credit institutions that concluded Swiss franc loans 
with borrowers during the period 28 June 2004 to 31 December 2010 –  to prepare  the following 
documentation within 60 days after the draft law takes effect : (1) a draft agreement on the 
settlement of mutual claims in the form of  an annex to a valid loan agreement or in the form of a 
separate agreement if the loan agreement has already been terminated or has expired;  (2) a new 
repayment plan that reflect s the exchange rate cap; and (3) a recalculation of the remaining debt  
taking account of the exchange rate cap . In the preparation of the new repayment plan and the 
recalculation of the remaining debt, the cumulat ive amount of instalments paid in excess of the 
amount of the instalments as calculated under the exchange rate  cap must be used for the 
repayment of the remainin g unpaid instalments.  All the documentation must be prepared without 
any costs for the borrower and submitted to the borrower with in 75 days.  If the calculations based 
on the exchange rate cap show that all the obligations under a loan agreement have already  been 
discharged in full, the lender must return any overpayment to the borrower within 30 days.  In case 
of overpayment where any part of the obligations under a loan agreement were paid by a 
guarantor , the guarantor must be reimbursed before the borrower. If, however,  the obligations 
under the loan agreement have not yet been discharged in full, the relationship continues under 
the amended conditions and pursuant to the new repayment plan.  
1.5 The draft law also regulates a number of specific situations that may occur after the conclusion 
of agreements for Swiss franc loans . In particular , if the Swiss franc loan agreement has been 
terminated by the lender , the following applies : (1) the lender must  prepare a new repayment plan 
and an agreement on the settlement of mutual claims for the period when the loan agreement 
was valid and effective ; (2) if the amounts already paid are insufficient  to discharge all the 
obligations under the loan agreement, the parties may agree that the outstanding debt is to be 
repaid under the terms of the credit agreement subject to the exchange rate cap;  and (3) if the 
amounts already paid exceed the total amount payable , the excess amount must be repaid to the 
borrower.  
1.6 If the receivables from Swiss franc  loans  have been  assigned to a third party,  the following 
applies:  (1) the original lender must prepare a new repayment plan for the period until the 
assignment  and an agreement on the settlement of mutual claims ; (2) If the borrower still has any 
outstanding debt towards the transferee, the original creditor and the transferee may agree to 
reduce the amount of the borrower’s outstanding debt for the amount of overpayments. The 
original lender is obliged to inform the borrower and provide him with evidence of debt reduction; 
(3) If the payments until the transfer exceed the total amount due under the loan agreement taking 
into account the currency cap, t he lender must return overpayments to the borrower within 30 
days of receipt of the signed agreement on settlement of mutual claims. In the same deadline, 
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3 the lender must also return to the borrower the countersigned agreement on settlement of mutual 
claim s.  
1.7 The draft law provides  that the general legal protection available to any of the parties is not 
compromised by the provisions of the draft  law. However, the draft law does not entitle the lender 
to avoid an amendment to loan agreement s by proving that the borrowers  were appropriately 
informed of  the risks.  
1.8 The draft law provides  that Bank a Sloveni je is responsible for (1 ) overseeing the implementation 
of the law and (2 ) conducting misdemeanour  procedures . If breaches are identified, Bank a 
Sloveni je can impose monetary penalties  or even initiate the procedure  for withdraw al of the 
banking licence.  The draft law specifies that if a lender fails to eliminate in a timely manner the 
identified irregularities in more than 10 cases, Banka Slovenije must initiate the process for the 
withdrawal of the lender’s banking licence.  
 
2. Withdrawal of the banking licence  
2.1 The Slovenian Law on banking specifies that the authori sation to provide banking services may 
be withdrawn, among other  reasons, if a credit institution does not act in accordance with the 
order and does not eliminate the violations or does not implement the measures required by  
Banka Slovenije and if identified violations  cannot be rectified by implementing other supervisory 
measures4. Under  the draft law , however,  Banka Slovenije is obliged to initiate the process for 
the withdrawal of the lender’s banking licence if a lender fails to eliminate in a timely manner the 
identified irregularities in more than 10 cases. Further, the draft law does not provide for a 
requirement that the identified irregularities cannot by rectified by implementing other supervisory 
measures. The explanatory memorandum does  not identify reasons  justify ing the stricter 
approach taken under the draft law compared to the Law on b anking. In those circumstances , the 
ECB invites the consulting authority to ensure that the measures provided for in  the draft law are 
proportionate  and suitable for the ir purpose5.  
2.2 Further, in view of the primacy of Union legislation, the ECB also notes that when Banka Slovenije 
considers that it is necessary to initiate the process for withdrawal of a banking licence, it must 
have full regard to Articles  4(1)(a) and 14(5) of Council Regulation (EU) No 1024/20136, which 
assign to the ECB the exclusive competence, for prudential supervisory purposes, to withdraw 
the authorisation of both significant and less significant credit instituti ons. Under Regulation (EU) 
No 468/2014 of the European Central Bank (ECB/2014/17)7, if Banka Slovenije, as the relevant 
national competent authority in the Single Supervisory Mechanism, considers that a credit institution’s authorisation should be withdrawn in whole or in part in accordance with relevant 
 
4  Article 293 of the Law on banking (Official Gazette of the Republic of Slovenia no. 92/21 as amended).  
5  See paragraph 3.1 of Opinion CON/2016/40.  
6  Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring speci fic tasks on the European Central 
Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63).  
7   Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014 establishing the framework for 
cooperation within the Single Supervisory Mechanism between the European Central Bank and national 
competent authorities and with national designated authorities (SSM Framework Regulation) (ECB/2014/17) (OJ L 141, 14.5.2014, p. 1).  
ECB -PUBLIC  
4 Union or national law, it must submit to the ECB a draft decision proposing the withdrawal of the 
authorisation. In that case, the ECB will take a decision on the proposed withdrawal of 
authorisation, taking into account the justification for withdrawal put forward by Banka Sloveni je 
and the safeguards under Union law , including the principle of proportionality8. Against this 
background, Banka Slovenije should be in a position to consider in its draft decision submitted to the ECB that the withdrawal of an authorisation is appropriate for attaining the legiti mate 
objectives pursued by the legislation and does not exceed the limits of what is necessary in order 
to achieve those objectives, also considering any reasonable prospect for alternative measures 
to remediate the breaches committed.  
 
3. Restructuring of Swiss franc loans  
3.1 In 2018 and 2019 t he ECB issued two opinions  on earlier draft Slovenian law s concerning Swiss 
franc loans , which w ere, however,  not enacted into law
9. 
3.2 Prior to the global financial crisis, borrowing in foreign currencies by households and non- financial 
corporations was popular in several Member States10. As previously noted by the ECB11, the 
lower interest rates applicable to foreign currency loans compared to loans in the domestic 
currency increased the demand for such loans. According to the explanatory memorandum  
accompanying the draft law , most of the Swiss franc  loans in Slovenia are long-term mortgage 
loans . 
3.3 According to the draft law , the restructuring of Swiss franc loans whether still outstanding, already 
terminated or sold will be compulsory for credit institutions . The draft law does not provide for any 
possibility for credit institutions to avoid or challenge the restructuring , even if the y can prove that 
the borrower took  the Swiss franc  loan on the basis of informed consent . 
3.4 Legal aspects concerning retroactivity  
3.4.1  As previously noted by the ECB12, introducing measures with retroactive effect undermines legal 
certainty and is not in line with the principle of legitimate expectations and may also interfere with 
acquired rights.  
3.4.2  The existing provisions of the Slovenian Law on c onsumer credit13, which applies from 2 March 
2017, enable consumers holding mortgage loans denominated in a foreign currency or containing 
a foreign currency clause to request conversion into EUR if the  change in the exchange rate 
exceeds 10%. In such a case, the banks are obliged to convert such loans at the exchange rate 
applicable at the date the consumer  makes the request . According to the explanatory 
 
8  See Art icle 52(1) of the Charter of Fundamental Rights of the European Union, Article 5 of the Treaty on European 
Union, and judgment of the General Court of 6 October 2021, Ukrselhosprom , T-351/18 and T -584/18, 
ECLI:EU:T:2021:669, paragraphs 307 to 345.  
9  See O pinion CON/2018/21 and Opinion CON/2019/27. All ECB opinions are published on EUR -Lex. 
10 For further information on lending in foreign currencies in the Union see the Annex to Recommendation 
ESRB/2011/1 of the European Systemic Risk Board of 21 September 2011 on lending in foreign currencies (OJ C 
342, 22.11.2011, p. 1).  
11  See, for example, paragraph 2.1 of Opinion CON/2018/21 and paragraph 2.2. of Opinion CON/2019/27.  
12  See, for example, paragraph 2.2 of Opinion CON/2018/21 and paragraph 2.3 of Opinion CON/2019/27.  
13  Article 52 of the Law on consumer credit (Official Gazette of the Republic of Slovenia no. 77/16 as amended).  
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5 memorandum, the draft law provides for a similar mechanism14 which is to be applied 
retroactively . However, the draft law introduces a much lower threshold for restructuring, requiring 
a change in the exchange rate in excess of  5%. 
3.4.3  Article 23(1) of Directive 2014/17/EU of the European Parliament and of the Council15, which 
applies to credit agreements that enter int o existence from 21 March 201616, specifies that 
Member States must  ensure that an appropriate regulatory framework is in place for credit 
agreements in respect of foreign currency  loans to ensure,  at a minimum , that (a) the consumer 
has a right to convert the credit agreement into an alternative currency under specified conditions , 
or (b) there are other arrangements in place to limit the exchange rate risk to which the consumer 
is exposed under the credit agreement. Article 23(5) of Directive 2014/17/EU allows Member 
States to further regulate foreign currency loans provided that  such regulation is not applied with 
retroactive effect. The retroactive effect of the draft law is contrary to the general aim of Article 
23(5) of Directive 2014/17/EU17, reflect ing one of the general principles of Union law, namely the 
principle of legal certainty18 which supports the limitation of  retroactiv e laws19. 
3.4.4  It is for the Slovenian  authorities to assess whether the retroactive character of the draft law also 
complies  with Slovenian  legal and constitutional principles20. 
3.5 Eligibility criteria  
 The draft law does not prescribe specific criteria for borrowers to be eligible to participate in the 
restructuring other than specifying that the Swiss franc loan should have been approved between 
28 June 2004 and 31 December 2010. This raises some concer ns with regard to the purpose of 
the draft law. In particular, as the ECB has previously  noted21, the application of certain targeted 
eligibility criteria , such as, for example, linking the right to restructure to the borrower’s actual 
income position or the loan -to-value (LTV) ratio,  may be appropriate.  
3.6 Effects on the banking sector  
3.6.1  As previously noted by the ECB22, the implementation of the draft law is ex pected to entail 
financial costs for the Slovenian banking sector. Credit institutions may be affected to different 
degrees depending on the extent to which they  concluded Swiss franc loans between 28 June 
2004 and 31 December 2010. This, in turn, is expected to have a negative impact on the 
profitability, capitalisation and future lending capacity of the banking sector as a whole23. 
 
14  Explanatory memorandum, p. 13.   
15  Directive 2014/17/EU of the European Parliament and of the Council of 4 February 2014 on credit agreements for 
consumers relating to residential immo vable property and amending Directives 2008/48/EC and 2013/36/EU and 
Regulation (EU) No 1093/2010 (OJ L 60, 28.2.2014, p. 34).  
16  See Article 43(1) of Directive 2014/17/EU.  
17  See the paragraphs referred to in footnote 12 . 
18 See, for example, judgment of the Court of Justice of 10 March 2009, Heinrich, C -345/06, ECLI:EU:C:2009:140.  
19 See, for example, judgment of the Court of Justice of 16 May 1979, Tomadini , 84/78, ECLI:EU:C:1979:129.  
20  See paragraph 2.2.3 of Opinion CON/2018/21 and paragraph 2.3.3 of Opinion CON/2019/27.  
21   See, for example, paragraph 3.3 of Opinion CON/2015/32.  
22   See paragraph 3.2.1 of Opinion CON/2019/27.  
23  See paragraph 3.2.1 of Opinion CON/2018/21 and paragraph 3.2.1 of Opinion CON/2019/27.  
ECB -PUBLIC  
6 3.6.2  The exact impact on the banking sector is unknown since the draft law does not include any 
impact assessment. Further, even if such assessment existed, it would be difficult to predict the 
possible future impact since this is dependent on the CHF exchange rate. In addition, the timing 
and scale of loan restructuring envisaged under the draft law could introduce longer -term 
uncertainty into credit institutions’ business planning.  
3.6.3  As previously noted by the ECB24, the restructuring will lead to a one- off incr ease in operational 
costs for affected credit institutions in Slovenia, in particular due to the restructuring of existing 
hedges, refinancing measures, and the costs associated with the obligation to recalculate Swiss franc loans and notify each borrower individually thereof
25. 
3.6.4  The ECB already emphasi sed26 its additional concern related to the placing of  the main burden 
of the restructuring of Swiss franc loans on the originator credit institutions , envisaged under the 
draft law,  even if the originators have  already transferred the loans ( e.g. as non- performing loans, 
‘NPLs’) to third parties, as is the case with numerous Slovenian credit institutions. Such provisions 
in the draft law represent an important impediment to the effective resoluti on of NPLs as the 
originator credit institutions would not be able to effectively transfer NPLs off their balance sheet. The reasoning behind NPL transfers is , amongst other things,  to remove uncertainty with regard 
to potential future losses associated wi th the transferred assets. In particular, it is unknown what 
the impact of such restructuring of loans  already transferred would mean for the contractual 
agreements between the originator credit institutions and third- party purchasers (e.g. whether 
such retroactive adjustment would invalidate the contracts and/or the exposures would need to 
be repurchased by the originators). The draft law does  not provide certainty with respect to its 
implementation in relation to  assets  already transferred.  
3.6.5  As previously noted by the ECB
27, the ECB has been a strong proponent of the development of 
secondary markets for credit institution assets, particularly NPLs, as reflected in the action plan 
agreed by the Council  of the EU  to tackle NPLs in Europe28. As part of a comprehensive solution 
to NPL resolution, the development of secondary markets may contribute to reducing NPLs. 
Looking ahead, well -functioning secondary markets may also prevent stocks of NPLs building up 
in the future. Moreover, a well -functioning secondary market may have a posi tive effect on 
financial stability to the extent that it could facilitate the transfer of the risks of NPLs off credit 
institutions' balance sheets. The presence of significant volumes of NPLs on credit institutions' 
balance sheets reduces their ability to fulfil their function as providers of credit to the real economy 
and hampers the operational flexibility and overall profitability that are essential to a well -
functioning banking sector. It is essential that the legal framework applicable to secondary 
markets enables the efficient transfer of NPLs off the balance sheet of credit institutions, an aspect with regard to which the draft law may introduce uncertainty
29. 
 
24  See paragraph 3.2.2 of Opinion CON/2019/27.  
25  See paragraph 3.2.2 of Opinion CON/2018/21 and paragraph 3.2.2 of Opinion CON/2019/27.  
26  See paragraph 3.2.3 of Opinion CON/2019/27.  
27 See paragraph 1.1. of Opinion CON/2018/54 and paragraph 3 .2.4 of Opinion CON/2019/27.  
28  See the Council's press release of 11 July 2017 on the ‘Council conclusions on Action plan to tackle non -
performing loans in Europe’, available on the Council's website at: http://www.consilium.europa.eu . 
29  See, for example, paragraph 2.2.4 of Opinion CON/2019/8 and paragraph 3.2.4 of Opinion CON/2019/27.  
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7 3.6.6  As a consequence of the draft law, Slovenian credit institutions might  incur new losses wit h regard 
to NPLs already removed from their balance sheets. The ECB has already pointed out on 
previous occasions30 that the ability of financial institutions to effectively manage credit risk 
depends on a reliable, predictable and stable legal framework t hat adequately balances the 
interests of both the creditor and the debtor. In this respect, it is important to carefully consider the impact of the draft law in order to ensure legal certainty, and to prevent moral hazard arising 
in the relationship between creditor and debtor. If credit institutions are deprived of efficient tools 
to work out NPLs in an effective and timely manner, this could result in unnecessarily high levels 
of NPLs and private sector debt, which in turn have an adverse impact on financ ial stability and 
could undermine future credit supply.  
3.6.7  Additionally, as the ECB has already noted
31, the Slovenian credit institutions that transferred 
their NPL portfolios  to third parties have also handed over all relevant documentation regarding 
the lo ans transferred to the new creditors , who were fully aware of the nature of the loans prior 
to that transaction. The draft law could therefore interfere with the commercial agreements 
between the credit institutions and the purchasers of loans and cause di sproportionate 
operational costs for credit institutions. Further, the fact that  such credit institutions  no longer 
have access to the documentation on loans  transferred  could make it impossible to carry out the 
recalculations and prepar e the documentation required by the draft law.  
3.6.8  The ECB also notes that in the case of a transfer of receivables relating to Swiss franc loans, the 
draft law requires credit institutions to restructure Swiss franc loans for the period from the 
drawdown until the transfer. However, the draft law does not envisage a restructuring of the loans 
for the period following the transfer.  
3.6.9  To conclude, the draft law must carefully balanc e the benefits of creating well -functioning 
secondary markets for NPLs against the impetus to protect debtors32. In addition, the draft law 
would benefit from a thorough impact assessment , including on both significant and less 
significant credit instituti ons.  
3.7 Effects on financial stability  
3.7.1  The ECB has pointed out on several occasions the risks associated with foreign currency loans33. 
In particular, foreign currency loans have constituted a major risk to financial stability in several 
Member States34, where the share of foreign currency loans is relatively high. The ECB points, 
in this respect, to the analysis of such risks made by the E uropean Systemic Risk Board in 
Recommendation ESRB/2011/1.  
 
30  See, for example, paragraph 2.2.4 of Opinion CON/2019/8 and paragraph 3.2.4 of Opinion CON/2019/27.  
31 See paragraph 3.2.6 of the Opinion CON/2019/27.  
32  See paragraph 2.2.3 of Opinion CON/2018/31 and paragraph 3.2.7 of Opinion CON/2019/27.  
33  See, in particular, the ECB Financial Stability Review of June 2010 and, with respect to foreign currency loans in 
Hungary, Opinions CO N/2011/87, CON/2012/27, CON/2014/59, CON/2014/72 and CON/2014/76; with respect to 
foreign currency loans in Poland, Opinions CON/2015/26, CON/2017/48, and CON/2017/9; with respect to foreign currency loans in Slovenia, Opinions CON/2019/27 and CON/2018/21;  and with respect to foreign currency loans 
in Croatia, Opinion CON/2015/32.  
34  However, this does not seem to be the case in Slovenia.  
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8 3.7.2  Data provided by Banka Slovenije show that the stock of Swiss franc loans to households reached 
a maximum share in October 2008, when they accounted for 34.7% of housing loans and 8.5% 
of consumer loans. Nevertheless, the overall household portfolios  seems to have been of a better 
quality compared to the rest of the banks’  portfolios,  as reflected in a relatively low proportion of 
NPLs. Since then, the share of total loans  denominated in Swiss francs  has decreased 
significantly35. At present , loans denominated in Swiss franc s do not give rise to any systemic 
risks or pose threats to financial stability. As previously mentioned, however, the implementation 
of the draft law is expected to entail financial costs for the Slovenian banking sector and may, 
therefore, have a negative impact on the profitability and capi talisation of Slovenian credit 
institutions. In particular, the provision that the lender must return any overpayment to the 
borrower within 30 days if  the total amount due under a loan agreement as amended in 
accordance with the exchange rate cap has been paid in full may imply substantial pressure on 
the income of credit institutions.  
3.7.3  As the ECB has already highlighted in terms of  the long -term effects on financial stability36, when 
introducing measures in relation to the restructuring of foreign currency loans, due consideration 
should always be given to fair burden sharing among all stakeholders in order to avoid moral 
hazard in the future37. The draft law specifies that, regardless of the magnitude of the exchange 
rate fluctuation, the borrower always covers the first 5% of the fluctuation. Therefore, the draft 
law limits the risk exposure for the borrower, but not for the credit institutions , which are otherwise 
required to c over the risk of exchange rate fluctuations  without any limitations.  
3.8 Effects on the Slovenian economy  
As the ECB has previously  noted38, the restructuring of Swiss franc loans with retroactive effect, 
as envisaged by the draft law, could have negative effects if it were to lead to a deterioration in 
both foreign and domestic investor sentiment , and trust in the system,  due to a perceived increase 
in legal uncertainty and country risk.  
 
4. Conferral of new task s on Banka Slovenije  
4.1 New task of Banka Slovenije 
4.1.1  The draft law confers the task of supervising the restructuring  procedures  performed by  credit 
institutions on Banka Slovenije.  Further, it  designates Banka Slovenije as the competent 
misdemeanour  authority in the event of  breaches  of the draft law. T he draft law does not specify 
in detail the scope of th is new task. The ECB understands that Banka Slovenije would be 
essentially require d to supervise  the compliance of credit institutions with the requirements of the 
draft law in relation to the restructuring of their  private contractual relationships with individual 
customer s regarding Swiss franc  loans.  Banka Slovenije has been designated as the competent 
 
35  Currently,  the share of total loans denominated in Swiss francs is 1.2% of total loans to households and non-
financial corporations . 
36   See, for example, paragraph 3.3.2 of Opinion CON/2019/27.  
37  See, for example, paragraph 3.3.2 of Opinion CON/2018/21 and paragraph 3.3.2 of Opinion CON/2019/27.  
38  See, for example, paragraph 3.4.1 of Opinion CON/2018/21 and paragraph 3.4.1 of Opinion CON/2019/27.  
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9 misdemeanour  authority  in relation to breaches of the draft law , within the  scope of the 
performance of its prudential supervisory tasks  over credit institutions39, and also has, to a certain 
extent , an existing consumer  protection role40. However,  Banka Slovenije has no comparable 
responsibilities  with respect to supervisi on of the compliance by credit institutions with the legal 
requirements  relating to the restructuring of privately negotiated loan contracts with their  
customers. The draft law therefore confers a new task upon Banka Slovenije.  
4.1.2  As the ECB already underlined in relation to the previous draft laws41, a proposed conferral of 
new tasks on a national central bank (NCB) in the European System of Central Banks must be 
assessed against the prohibition on  monetary financing under Article 123 of the Treaty. For the 
purposes of that prohibition, Article 1(1)(b)(ii) of Council Regulation (EC) No 3603/9342 defines 
‘other type of credit facility’, inter alia, as ‘any financing of the public sector’s obligations vis -à-vis 
third parties’.  
4.1.3  Ensuring that Member States implement a sound budgetary policy is one of the k ey objectives of 
the monetary financing prohibition, which may not be circumvented43. Therefore, the task of 
financing measures, which are normally the responsibility of the Member States, and which are 
financed from their budgetary sources rather than by the NCBs, must not be entrusted to NCBs. 
To decide what constitutes financing of the public sector’s obligations vis -à-vis third parties, which 
can be translated as the provision of central bank financing outside the scope of central bank tasks, it is necessary to carry out, on a case- by-case basis, an assessment of whether the task 
to be undertaken by an NCB is a central bank task or a government task, i.e. a task within the 
responsibility of the Member States. In other words, adequate safeguards must be in place to ensure that circumventions of the objective of the monetary financing proh ibition of maintaining 
a sound budgetary policy of Member States do not take place.  
4.1.4  As part of its discretion in the exercise of its duty, on the basis of Article 271(d) of the Treaty and 
Article  35.6 of the Statute of the European System of Central Banks and of the European Central 
Bank (hereinafter the ‘Statute of the ESCB’), to ensure that NCBs honour the obligations laid 
down by the Treaty, the Governing Council has endorsed safeguards of that kind in the form of 
criteria for determining what may be seen as falling within the scope of an obligation of the public 
sector within the meaning of Article 1(1)(b)(ii) of Regulation (EC) No 3603/93 or, in other words, what constitutes a government task as follows:  
First, central bank tasks are in particular those tasks that are related to the tasks that have been 
conferred upon the ECB and the NCBs by the Treaty and the Statute of the ESCB. These tasks 
are mainly defined in Article 127(2), (5) and (6) and Article 128(1) of the Treaty, as well as Article  22 and Art icle 25.1 of the Statute of the ESCB.  
 
39   Article 403 of the Law on banking (Official Gazette of the Republic of Slovenia no. 92/21 in 123/21 – ZBNIP).  
40  See the Law on consumer credit.  
41  See, for example, paragraph 4.1.2 of Opinion CON/2018/21 and paragraph 4.1.2 of Opinion CON/2019/27.  
42  Council Regulation (EC) No 3603/93 of 13 December 1993 specifying 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).  
43  Article 123 of the Treaty also serves the objective of maintaining price stability and reinforces central bank 
independence.  
ECB -PUBLIC  
10  Second, as Article 14.4 of the Statute of the ESCB allows NCBs to perform ‘other functions’, new 
tasks, i.e. tasks that are not related to tasks that have been conferred upon the ECB and the 
NCBs, are not precluded per se. However, new tasks that are undertaken by an NCB and which 
are atypical of NCB tasks or which are clearly discharged on behalf of, and in the exclusive 
interest of , the government or of other public sector entities should be considered government 
tasks.  
Third, an important criterion for qualifying a new task as atypical of an NCB task or as being clearly discharged on behalf of and in the exclusive interest of the government or other public 
sector entities is the impact of the task on the institutional, financial and personal independence 
of that NCB.  
In particular, the following aspects should be taken into account:  
(a) whether the performance of the new task creates con flicts of interest with existing central 
bank tasks which are not adequately addressed and does not necessarily complement those 
existing central bank tasks. If a conflict of interest arises between existing and new tasks, 
sufficient safeguards to mitigate  that conflict should be in place. The complementarity 
between a new task and the existing central bank tasks should not be interpreted broadly, 
so as to lead to the creation of an indefinite chain of ancillary tasks. Such complementarity 
should be examined in relation to the financing of those tasks;  
(b) whether without new financial resources the performance of the new task is disproportionate to the NCB’s financial or organisational capacity, and may have a negative impact on the capacity to perform properly  the existing central bank tasks;  
(c) whether the performance of the new task fits into the institutional set -up of the NCB in the 
light of central bank independence and accountability considerations;  
(d) whether the performance of the new task harbours substantial financial risks;  
(e) whether the performance of the new task exposes the members of the NCB decision- making 
bodies to political risks which are disproportionate and may also have an impact on their 
personal independence and, in particular, on the guarantee of term of office set out in 
Article  14.2 of the Statute of the ESCB.  
4.1.5  On the basis of the criteria set out above, the following paragraphs assess whether the new task  
of Banka Slovenije is in line with the prohibition on  monetary financing.  
4.2 Tasks related to the tasks conferred upon the ECB and the NCBs by the Treaty and the Statute 
of the ESCB  
4.2.1  As previously noted by the ECB
44, supervising the compliance of credit institutions with the 
requirements of the draft law  in relation to  the restructuring of  private ly negotiated loan contract s 
with their consumers  is not among the basic central banking tasks listed in Article 127(2) or (5) 
of the Treaty or otherwise conferred upon the NCBs by the Statute of the ESCB. Nor does t he 
task fal ls within the scope of the supervisory tasks of Banka Slovenije. Thus , a careful 
assessment of the conferral of this task on Banka Slovenije is required in order to determine 
 
44  See, for example, paragraph 4.2.1 of Opinion CON/2018/21 and paragraph 4.2.1 of Opinion CON/2019/27.  
ECB -PUBLIC  
11 whether it constitutes a government task, and whether the related funding gives rise to monetary 
financing concerns.  
4.3 Tasks which are atypical of NCB tasks  
4.3.1  As previously noted by the ECB45, the new task conferred on Banka Slovenije by the draft law 
relates to supervision of the compliance by credit institutions with the requirements under  the 
draft law relating to the restructuring of private ly negotiated loan agreements with  their customers. 
Banka Slovenije’s  new task can be seen, to a certain extent, as being related to the protection of 
consumers . 
4.3.2  As previously noted by the ECB46, it is necessary to analyse whether th is new task is a typical of 
NCB tasks. While the majority of  NCBs do not appear to have been assigned tasks of this nature,  
the ECB has identified  two Member States where NCBs have been given similar tasks. In 
Cyprus47 and Hungary48, the NCBs have been given tasks relating to the supervision of the 
compliance by credit institutions with the legal requirements in relation to the restructuring of 
private, contractual loan agreements between credit institutions and their customers.  In the case 
of Hungary , these t asks are substantially similar  to the tasks conferred on Banka Slovenije under 
the draft law. In addition, the NCBs in Croatia49, the Czech Republic50, Ireland51, Italy52 and 
Slovakia53 have been given similar supervisory tasks relating more generally to consumer 
protection and the transparency of loan arrangements . In this regard, also taking into account the 
consumer protection roles which are currently fulfilled by numerous ESCB NCBs in the field of 
financial services54, the new task does not appear to be completely atypical of NCB  tasks. 
However , the new task would be consider ed as atypical if Banka Slovenije’s supervisory role 
 
45  See paragraph 4.3.1 of Opinion CON/2018/21 and paragraph 4.3.1 of Opinion CON/2019/27.  
46  See paragraph 4.3.2 of Opinion CON/2018/21 and paragraph 4.3.2 of Opinion CON/2019/27.  
47  The Central Bank of Cyprus was entrusted with sanctioning powers in relation to the compliance of credit 
institutions with restrictions regarding the variation of the interest rates on credit facilities imposed by Cypriot 
Law 160(I)/1999 and supervisory tas ks relating also to civil law aspects in the area of payment services and 
mortgage credit. In connection with the performance of these tasks , the Central Bank of Cyprus may also request 
and review privately negotiated contracts between credit institutions and their customers.  
48  Magyar Nemzeti Bank has a supervisory role in connection with the compliance by credit institutions with legal 
requirements relating to the conversion of foreign currency denominated consumer loans, including loans 
denominated in Sw iss francs, as defined in applicable laws (e.g. Law XXXVIII of 2014 and Law XL of 2014, both 
as amended by Law LXXVIII of 2014, Law XXVII of 2014, Law LII of 2015 (amending Law XL of 2014) and Law CXLV of 2015). The performance of these supervisory tasks i nvolves the verification of compliance by credit 
institutions, which includes also the review of privately negotiated contracts between credit institutions and their 
customers. See Opinion CON/2014/72.  
49   Hrvatska narodna banka carries out oversight over  credit institutions’ compliance with the Law on credit institutions, 
which includes compliance with internal bylaws of credit institutions governing the relationship with their clients, 
contracts concluded and consumer protection provisions.  
50  Česká národní banka has been assigned tasks related to consumer protection, including supervision of 
compliance by supervised entities of the observance of the prohibition of unfair business practices and supervision 
of rules regarding consumer discrimination or the  obligation to inform about prices.  
51  See, for example, paragraph 3.4.2 of Opinion CON/2017/12.  
52  The Banca d'Italia has been assigned with tasks in relation to the supervision, from a transparency perspective, 
of the terms of banking and financial agreements between credit institutions  and non- credit institution lenders.  
53  Národná banka Slovenska has powers in the area of the protection of financial consumers, which include a preliminary assessment of unfair commercial practices of supervised entities a nd unacceptable conditions in 
contracts for the provision of financial services. The scope of this supervision does not include the adjudication of 
disputes between the supervised entities and their customers.  
54  See, for example, paragraph 3.4.2 of Opinion CON/2017/12.  
ECB -PUBLIC  
12 were to extend to the resolution of disputes between contractual parties, which is a matter that is 
usually handled by the courts55. The ECB understands that this is not the case with the draft law.  
4.4 Task s clearly discharged on behalf of and in the exclusive interest of the government  
4.4.1  According to the explanatory memorandum, the objective of  the draft law is to implement the 
constitutional principle of the ‘ welfare state’ and to introduce sanction s for breaches of obligations 
arising under contractual relationships , thereby providing legal protection to a number of 
consumers  who have taken out Swiss franc  loans56. The draft law is therefore intended to provide 
protection to consumers of financial services . 
4.4.2  Due to the retroactive application of the draft law , it is not clear whether  the draft law would 
effectively guarantee the fulfilment of the objective of protecting consumers of financial services. Thus, the ECB cannot exc lude the risk  that, in carrying out its supervisory functions, Banka 
Slovenije  would act exclusively in the interest of another public entity.  
4.5 Extent to which performance of the new task creates conflicts of interest with existing central bank tasks 
4.5.1  As previously noted by the ECB
57, it may be considered that the new task at  least partially 
complement s other similar  existing supervisory and consumer protection tasks of Banka 
Slovenije . As with other consumer protection tasks, sufficient mitigation measures must be put in 
place to ensure that in the event of a conflict of interest supervisory considerations prevail . 
4.6 Extent to which performance of the new task is disproportionate to the financial or organisational 
capacity of Banka Slovenij e 
4.6.1  As previously noted by the ECB58, the principle of financial independence requires that Member 
States do not put their NCBs in a position where they have insufficient resources to carry out both 
their ESCB -related tasks and their national tasks, from an operational and financial perspective. 
Furthermore, when allocating specific new tasks to NCBs, each NCB concerned should have sufficient financial and human resources at its disposal to ensure that the tasks can be carried 
out without impact ing on the NCB’s financial or operational capacity to perform its ESCB tasks.  
In order to ensure that Banka Slovenije’s capacity to perform its ESCB -related tasks is not 
impaired, Banka Slovenije  must, therefore, be in a position to avail itself of the necess ary 
resources to carry out its duties under the draft law.  
4.6.2  At this early stage, it is difficult to predict what additional resources Banka Slovenije will require 
in order to perform its new supervisory task under the draft law . However,  it is likely that Banka 
Slovenije  will have to dedicate additional human, technical and financial resources to implement 
this new  supervisory task. This may impose a n additional  burden on existing central banking and 
supervisory  tasks performed by Banka Slovenije. Additiona lly, Banka Slovenije could be exposed 
to reputational risk in carrying out its supervisory assessment of the appropriateness of the legal 
costs of the credit institutions concerned . 
 
55  See paragraph 4.3.2 of Opinion CON/2018/21 and paragraph 4.3.2 of Opinion CON/2019/27.  
56  See the explanatory memorandum, pp. 8, 9 and 11.  
57  See, for example, paragraph 4.5.1 of Opinion CON/2018/21 and paragraph 4.5.1 of Opinion C ON/2019/27.  
58  See, for example, paragraph 4.6.1 of Opinion CON/2018/21 and paragraph 4.6.1 of Opinion CON/2019/27.  
ECB -PUBLIC  
13 4.6.3  While supervised entities are required to pay fees to Banka Slovenije in relation to the 
performance of its  supervisory tasks under the Law on c onsumer credit59, the draft law does not 
provide for Banka Slovenije  to be reimbursed for the costs of carrying out this new task. The ECB 
invites the consulting authority to consider the impact of the draft law on the resources of Banka 
Slovenije and undertake appropriate measures to ensure that the central banking and supervisory 
tasks performed by Banka Slovenije will in no way be affected.  
4.7 Extent to which performance of the new task fits into the institutional set -up of Banka Slovenije,  
in the light of central bank independence and ac countability considerations  
4.7.1  The potential impact of the new task on the institutional, financial and personal independence of 
Banka Slovenije must be taken into consideration.  
4.8 Extent to which the performance of tasks harbours substantial financial risks  
4.8.1  The draft law does not contain any specific provisions on liability in relation to the exercise of 
Banka Slovenije’s powers under the draft law or the failure to exercise such powers. Banka 
Slovenije ’s potential liability in respect of the performance of the new task will thus be subject to 
the rules on liability for damage caused in the exercise of public authority pursuant to the Law on 
banking and the general liability regime under Slovenian law. As previously noted by the ECB60, 
the general liability regime would also apply with respect to any potential damage resulting from  
decisions of Banka Slovenije delivered in supervisory proceedings pursuant to the draft law which are later declared to be invalid in the court s. 
4.9 Extent to which the perf ormance of the new task exposes members of the decision -making bodies 
of Banka Slovenije to disproportionate political risks and impacts on their personal independence  
4.9.1  As previously noted by the ECB
61, due to the sensitivity of the subject matter and the high degree 
of public attention being given to the restructuring of Swiss franc  loans  in Slovenia,  due 
consideration should be given to any disproportionate political risk or impact on the personal 
indepe ndence of  the members of the decision- making bodies of Banka Slovenije that may arise 
in the performance of the new task.  
4.9.2  In this respect, consideration might  be given to the possibility of conferring this task on a separate 
government agency to which Bank a Slovenije could provide technical support in view of its 
expertise and experience in dealing with the Slovenian banking sector.  
4.10 Conclusion  
 The new task of Banka Slovenije of supervising  the compliance of credit institutions with the 
requirements under the draft law in relation to the restructuring of privately negotiated loan 
agreements between credit institutions and their customers can be regarded as a central bank 
task. However, as  the ne w task conferred upon Banka Slovenije by the draft law must not 
adversely affect its capacity to carry out its NCB or ESCB- related tasks, careful consideration 
should be given to its impact on Banka Slovenije’s operational capacity. In addition,  careful 
 
59   See Article 79 of the Law on consumer credit.  
60  See paragraph 4.8.1 of Opinion CON/2018/21 and 4.8.1 of Opinion CON/2019/27.  
61  See pa ragraph 4.9.1 of Opinion CON/2018/21 and 4.9.1 of Opinion CON/2019/27.  
ECB -PUBLIC  
14 consideration should be given to any disproportionate political risk or impact on the personal 
independence of the members of the decision- making bodies of Banka Slovenije that may arise 
in the performance of the new task62. 
 
This opinion will be published on EUR -Lex.  
 
 
Done at Frankfurt am Main, 26 November  2021. 
 
[signed]  
 
The President of the ECB  
Christine LAGARDE  
 
62  See paragraph 4.10.1 of Opinion CON/2018/21 and paragraph 4.10.1 of Opinion CON/2019/27.