EN ECB-PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 22 December 2011 
on amendments to the resolution regime for credit institutions 
(CON/2011/107) 
 Introduction and legal basis
 
On 15 December 2011, the European Central Bank (ECB)  received a request from the Greek Ministry of 
Finance for an opinion on a draft provision amending Law 3601/20071 (hereinafter the ‘draft provision’).  
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 consultation of the E CB by national authorities regarding 
draft legislative provisions2, as the draft provision relates to the Bank of Greece (BoG) and to rules 
applicable to financial 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 ECB, 
the Governing Council has adopted this opinion. 
 1.  Purpose of the draft provision  
The draft provision will accelerate the procedure for tr ansferring assets from a credit institution to another 
under Article 63D(4)
3 of Law 3601/2007 in urgent cases. It provid es that in urgent cases the procedure for 
submitting offers, the determination of  the remuneration to be paid to the transferee credit institution and 
the transfer will be based on a temporary assessment by the BoG. Immediately thereafter, the BoG will 
entrust external auditors with the preparation of assessment reports. Within two months from the transfer 
of assets under Article 63D(1), the BoG will determine the remuneration to be paid, taking into account 
the assessment reports, the current ma rket conditions and the need to ensure the smooth operation of the 
financial system4. Any discrepancies between the two valuati ons will be funded by the Resolution Branch 
of the Hellenic Deposit and Investment Guarant ee Fund, in accordance with Article 63D(13).  
 
                                                 
1  FEK A 178/1.8.2007. 
2  OJ L 189, 3.7.1998, p. 42.  
3  If the offers submitted are considered unattractive, the BoG will  transfer assets to a transitional credit institution to be 
established for this purpose under Article 63E or put the credit institution under special liquidation in accordance with 
Article 68.  
4  See the second sentence  of Article 63D(4). 
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2 2. General observations 
2.1 The draft provision will take the form of a le gislation adopted under Article 44 of the Greek 
Constitution by Greece’s President, on a proposal by the Cabinet. Under this urgent procedure, the draft provision would need to be submitted to Parlia ment for ratification within 40 days and ratified 
within three months of submission. The draft provision enters into force immediately after 
publication and has the same effect as a law. Thus , the ECB should be consulted in due time prior 
to entry into force. More generally, internal ad ministrative procedures should be in place to ensure 
the timely consultation of the ECB, and the ECB s hould be consulted at an appropriate point in 
time in the event of amendments during the legislative procedure
5. 
2.2 The draft provision amends Article 63D(4) of the Law on banking, introduced by Law 4021/2011. 
Law 4021/2011 established a comprehensive bank reso lution framework as a structural benchmark 
under the EU/IMF support programme6. In addition to safely resolvi ng ailing institutions, the bank 
resolution framework aims at averting severe sy stemic disruption and undue taxpayer exposure to 
loss. The ECB understands that the objective of the draft provision is to facilitate the exercise by 
the BoG, in urgent cases only, of its resolution powers  relevant to the transfer of the assets of an 
ailing institution, in accordance with Article 63D. 
  
3.  Specific observations  3.1 The ECB acknowledges the importance of enhanci ng the BoG’s role, as a resolution authority, 
under Law 4021/2011, and the significance of safegua rding its ability to take, in a timely manner 
and without undue delay, the necessary resolution m easures in relation to ailing credit institutions. 
While understanding the need for the BoG to have the necessary flexibility to efficiently exercise 
its resolution powers under Article 63D(4), the ECB notes that neither the draft provision nor its explanatory memorandum specify the conditions or criteria for activating the procedure laid down 
in the draft provision.  
3.2 Concerning the proposed modification of the exte rnal auditors’ role in the valuation procedure 
under Article 63D of Law 3601/2007 , for the purposes of the current valuation procedure, ‘the 
Bank of Greece will take into account, but should not  be bound by, the auditors’ reports as part of 
the external valuation process’
7. If the BoG activates the emergency procedure under the draft 
provision, thus dispensing with the external auditors’  ex ante valuation, a risk of discrepancies 
could arise between its own valuation and the ex post external auditors’  valuation. This risk could 
                                                 
5  ECB Opinion CON/2010/58. All ECB Opinions are avai lable on the ECB’s websit e at www.ecb.europa.eu. 
6 See the Economic Adjustment Programme for Greece – Four th Review available on the European Commission’s website 
at: http://ec.europa.eu/economy_finance/publications/occasiona l_paper/2011/op82_en.htm. In particular, paragraph 12 of 
annexed Memorandum of Economic and Financial Policies iterates the need, in  the context of ongoing initiatives at the 
EU level, to strengthen the resolution framework for problem banks and to allo w timely and effective intervention and 
resolution consistent with EU Treaty rule s and international sound practices. In this  context, a broad set of tools will be 
prepared to ensure that a resolution regime for financial institutions is put into place to safeguard financial stability and 
ensure effective depositor protection. 
7  See also ECB Opinion CON/2011/72. 
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3 inter alia  affect the funding gaps to be financed by the Resolution Branch of the Hellenic Deposit 
and Investment Guarantee Fund, according to Article 63D(13) of Law 3601/2007. 
3.3 Therefore, the BoG should carefully consider the criteria it would propose for its preliminary 
valuation, to mitigate the risk of any discrepancie s between the preliminary and final valuations, as 
such discrepancies may, inter alia , lead to outflows of taxpayers’ money. In this regard, the ECB 
understands that the procedure provided for in the draft provision will only be activated as a 
measure of last recourse in emergency situations only.  
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 22 December 2011. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI