EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 15 November 2010 
on building societies 
(CON/2010/81) 
 
Introduction and legal basis  
On 11 October 2010 the European Central Bank (ECB) re ceived a request from the Polish Parliament for 
an opinion on a draft law on building societies and State support for home savings schemes (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, the sixth indent of  Article 2(1) and Article 2(2) of Council Decision 
98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions
1, as the draft law relates to the rules applicable to financial 
institutions insofar as they materially influence the stability of financial institutions and markets, as well 
as to instruments of monetary policy of Member St ates other than Member States whose currency is the 
euro. In accordance with the first sen tence 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 The draft law provides for a legal framework fo r the operation of building societies (kasy 
oszczędnościowo-budowlane), classifying them as a sub-category of credit institutions (banks
2), operating 
in the form of joint-stock companies3. The business of building socie ties will exclusively comprise 
receiving deposits from natural persons and granting mortgages to such persons with the aim of financing 
housing-related investments specifically enumerated in the draft law4. The draft law is an attempt to re-
                                                 
1  OJ L 189, 3.7.1998, p. 42. 
2  Credit institutions registered in Poland are legally referred to as ‘banks’ (this legal term  does not cover credit unions) 
because the term ‘credit institutions’, under Polish law, only relates to European Economic Area (EEA) credit institutions 
from outside Poland. Non-EEA credit in stitutions are referred to under Polish  law as ‘foreign banks’ (Article 2, 
Article 4(3) and Article 4(1)(17) to (20) of th e Law on banking of 29 August 1997 (consolidated text: Dziennik Ustaw  
(Dz. U.) of 12 June 2002 No 72, Item 665,  hereinafter, the ‘Law on banking’)). 
3 Article 2 of the draft law.  
4 Articles 4 and 8 of the draft law. 
2 establish the system of building societies which had been first introduced in the legal provisions in 19975, 
but never realised in practice. 
 2. ECB comments 2.1 Obligation to maintain minimum reserves with the central bank 
2.1.1 The draft law proposes an arrangement under whic h building societies are to be excluded from the 
obligation to hold minimum reserves with Narodowy Bank Polski (NBP).  
2.1.2 In past opinions
6, the ECB has maintained that the Euro system’s minimum reserves obligations 
apply to entities that fulfil the functional criteria of a ‘credit institution’ according to the definition 
contained in the Eurosystem’s minimum reserves rules7, which cross-refers to criteria defined in 
Article 4(1)(a) of Directive 2006/48/EC8. Such criteria define credit institutions as undertakings 
whose business is: (i) to receive deposits or other repayable funds from the public; and (ii) to grant 
credit for their own account. The ECB notes that building societies will fulfil both of the functional criteria of a ‘credit institution’, namely that they  will: (i) receive deposits from natural persons, i.e. 
deposits ‘from the public’ within the meaning of th e Directive 2006/48/EC; and (ii) grant credit for 
their own account
9. Consequently, in line with its previous opinions10, the ECB considers that 
building societies will be subject to the Eurosyst em’s minimum reserves requirements when Poland 
adopts the euro11. Such requirements, and the sanctions related to them12, will apply directly by the 
operation of the Union law. 
2.1.3 As regards the period before the adoption of  the euro by Poland, the ECB would welcome the 
inclusion of building societies in NBP’s minimu m reserves regime as a measure facilitating the 
                                                 
5 See the Law of 5 June 1997 on building societies and State s upport for home savings scheme s (Dz. U. of 28 July 1997, 
No 85, Item 538), repealed on 1 January 2002. 
6 See ECB Opinions on national legislation on credit unions , in particular paragraphs 10 to 14 of ECB Opinion 
CON/2005/8, paragraph 3.1 of ECB Op inion CON/2006/4), paragraphs 10 to 17 of ECB Opinion CON/2006/11 and 
paragraph 2.1 to 2.5 of ECB Opin ion CON/2009/60. All ECB opinions are available on the ECB’s website at 
www.ecb.europa.eu. 
7 See Article 2(1) of Regulation ECB/ 2003/9 of 12 September 2003 on the applicat ion of minimum reserves (OJ L 250, 
2.10.2003, p. 10). 
8 Directive 2006/48/EC of the European Parliament and of  the Council of 14 June 2006 relating to the taking up and 
pursuit of the business of credit instituti ons (recast) (OJ L 177,  30.6.2006, p. 1).  
9 Article 4 of the draft law. See also paragraph 2 of the Opinion of the European Monetary Institute CON/94/12. 
10 See paragraph 14 of ECB Opinion CON/2005/8, paragra phs 10 and 17 of ECB Opinion CON/2006/11 and paragraph 2.3 
of ECB Opinion CON/2009/60.  
11  Further in this context, it should also be noted that being s ubject to the Eurosystem minimu m reserves regime is one of 
the general criteria for eligibility to participate in Eurosy stem monetary policy operations; the other general eligibility 
criteria include: (i) being fina ncially sound and, in principl e, being subject to at least one form of harmonised EU/EEA 
supervision by national authorities; and (ii) fulfilment of an y operational criteria specified in the relevant contractual or 
regulatory arrangements applied by the respective nationa l central bank (see Section 2.1 of Annex I to Guideline 
ECB/2000/7 of 31 August 2000 on monetary policy instrument s and procedures of the Eurosystem, OJ L 310, 
11.12.2000, p. 1). 
12 See Article 7 of Council Regulation (EC) No 2531/98 of 23 November 1998 concerning the application of minimum 
reserves by the European Central Bank (OJ L 318, 27.11 .1998, p. 1) and Regulation ECB/1999/4 of 23 September 1999 
on the powers of the European Central Bank to  impose sanctions (OJ L 264, 12.10.1999, p. 21). 
3 harmonisation of Polish law with the Eurosystem requirements13. Moreover, since building 
societies are defined by the draft law as a sub- category of banks, they will be eligible to access 
central bank liquidity, i.e. refinancing credit from NBP14, in accordance with the same rules as 
those applying to regular banks. This extension to  building societies of the central bank’s liquidity 
providing operations should be accompanied by  the application of the minimum reserves 
obligations, which constitute a complementary moneta ry policy instrument, structurally linked to 
liquidity providing operations15. 
2.2 Calculation of contributions to the deposit-guarantee scheme 
The draft law sets the maximum level of contributions  to be paid by the building societies to the 
Polish deposit-guarantee scheme (Bank Guarantee Fund, the ‘Fund’) at 0.1% of the building societies’ risk-weighted balance shee t assets and guarantees and endorsements
16. First, the ECB 
notes that the draft law may need to be updated to refer to the method for calculating maximum 
contributions to the Fund specified in the currently binding provisions17. Second, the ECB 
understands that the intended effect of Article 18 of the draft law is to impose on the building 
societies a level of contributions to the Fund lower than that applicable to regular banks. In this 
context, the ECB draws the Polish authorities’ atte ntion to an advanced proposal by the European 
Parliament and Council to recast Direc tive 94/19/EC on Deposit Guarantee Schemes18. The 
amendments introduced in the proposed recast Directive aim, inter alia , at harmonising the 
calculation of contributions paid by all types of credit institutions to the deposit guarantee 
schemes19. The ECB recommends that the Polish aut horities take due account of this ongoing 
legislative process when defining the buildi ng societies’ contributions to the Fund. 
 This opinion will be published on the ECB’s website.  
Done at Frankfurt am Main, 15 November 2010. [signed] 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
13 See paragraph 3.1 of ECB Opinion CON/2006/4 and paragr aph 2.4 of ECB Opinion CON/2009/60. Compare paragraph 
2.1 of ECB Opinion CON/2007/28.  
14 Article 42 of the Law of 29 August 1997 on Narodowy Bank Pols ki (consolidated text: Dz. U. of 1 April 2005 No 1, 
Item 2). 
15 See paragraph 2.4 of ECB Opinion CON/2009/60. 
16 Article 18 of the draft law.  
17 Under the rules currently in force, the amount of contributi ons is set as a percentage of the base amount defined by 
reference to applicable capital requireme nts, the maximum contribu tion being 0.3% of such base amount (see Article 
13(1) to (1a) of the Law on the Bank Guarantee Fund, cons olidated text Dz. U. of 4 June 2009 No 84 Item 711). 
18 See ‘Proposal for a Directive …/ …/ EU of the European  Parliament and of the Council on Deposit Guarantee Schemes 
[recast] of 12 July 2010 (COM/2010/0368 final - COD 2010/0207, published on the European Commission’s website at 
www.ec.europa.eu, hereinafter the ‘pr oposed recast Directive 94/19/EC’).  
19 See Article 11 of the proposed  recast Directive 94/9/EC.