EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 12 November 2008 
at the request of the Banca d’Italia on behalf of the Italian Ministry for Economic Affairs and 
Finance on a draft ministerial decree cont aining provisions to implement Decree-Law 
No 157/2008 on further urgent measures to guarantee the stability of the credit system 
(CON/2008/65) 
 
Introduction and legal basis  
On 7 November 2008 the European Central Bank (ECB) received a request from the Banca d’Italia on 
behalf of the Italian Ministry for Economic Affairs and Finance (hereinafter the ‘MEF’) for an opinion on 
a draft ministerial decree containing provisions to implement Decree-Law No 157 of 13 October 2008 on 
further urgent measures to guarantee the stability of the credit system  (hereinafter the ‘draft decree’). 
The ECB’s competence to deliver an  opinion is based on Article 105(4) of the Treaty establishing the 
European Community 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 European Ce ntral Bank by national authorities regarding draft 
legislative provisions1, as the draft decree relates to the Banca d’Italia and to rules applicable to financial 
institutions insofar as they materially influence th e 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 decree 
The draft decree contains provisions implementing D ecree-Law No 157/2008 on further urgent measures 
to guarantee the stability of the credit system of 13 October 2008
2, on which the ECB commented in its 
earlier Opinion CON/2008/583. In particular, the draft decree spec ifies procedures and conditions for the 
application of the following types of measures in support of Italian banks wh ich were introduced under 
Decree-Law No 157/20084: (i) provision of State guarantees for bank liabilities with maturities of up to 
five years, and issued after the entr y into force of Decree-Law No 157/20085; (ii) swap arrangements 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  Decree-Law No 157/2008 was presented to the Parliament on the same day of its adoption, in accordance with the 
procedure for conversion into law, which is currently under way.  Article 2(1) of Decree-Law No 157/2008 contains a 
delegation for the adoption of the draft decree. 
3  ECB Opinion CON/2008/58 of 23 October 2008 at the request of th e Banca d’Italia on behalf of  the Italian Ministry for 
Economic Affairs and Finance on two Decr ee-Laws containing urgent measures to guarantee the stability of the banking 
system and the continuity of the provision of credit; the opini on is available on the ECB’ s website at www.ecb.europa.eu. 
4  Banks having their  registered office in Italy (see Article 1(2) of the draft decree). 
5  See Article 1(1) of Decree-Law No 157/2008, as specifically implemented by Articles 1(1)(a) and 2 of the draft decree. 
2 involving the provision of Treasury bills in exchange for financial instruments held by banks and bank 
liabilities with maturities of up to five years; and (iii)  provision of State guarantees in relation to securities 
lending transactions entered into by banks in order to obtain securities eligible as collateral in the 
Eurosystem refinancing operations6 (hereinafter, the ‘support measures’). The draft decree further 
specifies, in particular:  
(i) in relation to the State guarantees: the bank liab ilities which may be covered, the scope of the 
granted State guarantees, as well as procedures for admission of the beneficiary banks and for the utilisation and recovery of the granted State guarantees
7; 
(ii) in relation to swap transactions: the scope of  financial instruments held by banks and bank 
liabilities, as well as the procedures fo r admission of the beneficiary banks8. 
Additionally, the draft decree speci fies the amount of charges to be imposed on beneficiary banks in 
connection with the provision of the State guarantees or the swap transactions9. 
 
2. General observations 
2.1 In its Opinion CON/2008/58, the ECB made a number of recommendations as regards the 
implementation of Decree-Law No 157/2008. More specifically, as regards the terms of the State 
guarantees for banking liabilities, to ensure the e ffective implementation of the single monetary 
policy in the euro area10, the ECB recommended that the extension of the State guarantees to cover 
interbank deposits should be avoided. The ECB also  highlighted that it is crucial to ensure the 
coordination of the price determination of the State guarantees within the euro area and the EU, 
given that a level playing field is of essence11. The ECB appreciates the clarification in the draft 
decree that the government guarantees may be provide d under Article 2 only in relation to specified 
financial debt instruments, hence excluding inte rbank deposits.  The ECB further notes that the 
economic conditions for granting the State guarantee in  Article 6 of the draft decree are in line with 
the principles contained in the Commission’s guidelines. 
2.2 The ECB also considers that the draft decree complies with Article 8 of the ‘Declaration on a 
concerted European action plan of the euro area c ountries’ made by the Heads of States of the euro 
area on 12 October 2008, which states, inter alia , that the euro area governments ‘would make 
available … a Government guarantee … of new me dium term (up to 5 years) bank senior debt 
issuance’12. 
2.3 Furthermore, the ECB appreciates  that the draft decree is fully in line with the recently adopted 
Commission’s guidance on compliance of the financ ial sector support schemes with EU State aid 
                                                 
6  See Article 1(3) of Decree-Law No 157/2008, as specifically implemented by Articles 1(1)(c) and 4 of the draft decree. 
7  See Articles 2 and 4, 5, 7 and 9 of the draft decree. 
8  See Articles 3 and 8 of the draft decree. 
9  See Article 6 of the draft decree. 
10  See paragraph 3.2 of ECB Opinion CON/2008/58. 
11  See paragraph 3.3 of ECB Opinion CON/2008/58. 
12  See the Declaration of 12 Octo ber 2008 available on the French Pres idency’s website at www.ue2008.fr. 
3 rules13 as it provides that: (i) the scope of the support measures will be limited to what is strictly 
indispensable to address the current serious econom ic crisis; (ii) the continuation of the support 
measures is subject to biannual monitoring by th e Italian authorities, who will duly communicate 
the outcome to the Commission14; (iii) appropriate mechanisms are put in place to minimise the 
potential abuse by beneficiary banks of their preferential situation, such as: the prohibition on obtaining undue advantages, e.g. through commerc ial advertisements targ eting the general public
15; 
(iv) limitations on the size of the balance sheet of the beneficiary institutions.  
 
3. Banca d’Italia’s  involvement in the support measures  
3.1 Under the draft decree, the Banca d’Italia will perform certain tasks in order to implement the 
support measures. First, it will assess the eligibility of the applicant banks’ with particular regard to 
their capital adequacy and ability to  discharge the obligations assumed16. Second, it will support the 
Finance Minister in ensuring the beneficiary banks ’ compliance with the general safeguards for the 
provision of the support measures17. Further, with respect to securities lending transactions to be 
guaranteed under the draft decree, the Banca d’Italia  will produce the evaluation of such securities, 
which will be based on their market value18. In line with its previous opinions19, the ECB recalls 
that the functions to be performed by the Banca d’ Italia with regard to the support measures need to 
comply with the monetary financing prohibition as regards the remuneration of the Banca d’Italia 
for its involvement, which should be conducted in  a manner fully compatible with the Banca 
d’Italia’s institutional and financial independence under the Treaty and the Statute of the European 
System of Central Banks and of the European Central Bank. 
3.2 Moreover, in the case of payments under the Stat e guarantees, the Banca d’Italia will have the task 
of distributing the amounts from the funds transfe rred to it by the Government for this purpose20. In 
this respect, the ECB understands that the involve ment of the Banca d’Italia will not go beyond the 
traditional task of a fiscal agent and that all th e support measures will be financed from the State’s 
budgetary resources. It is therefore expected that  the involvement of Banca d’Italia will comply 
with the prohibition on monetary financing la id down in Article 101 of the Treaty and the 
                                                 
13  See the ‘Communication from the Commission  – The application of State aid rule s to measures taken in relation to 
financial institutions in the context of the current glob al financial crisis’ of 13 October 2008, available on the 
Commission’s website at www.ec.europa.eu. 
14  See Article 1(3) of the draft decree. 
15  See Article 1(4) to (6) of the draft decree. 
16  See Article 7(3) to(4) and 8(3) to(4). In this respect, the Ba nca d’Italia will benefit from its  role as supervisory authority  
of the banking sector (see Title III and in particular Arti cle 51 of the Legislative Decree 385 of 1 September 1993, 
published in Gazzetta Ufficiale della Repubblica Italiana  of 30.9.1993, n. 230 (Consolidated Banking Law)). 
17 See Article 1(3)-(5) of the draft decree. 
18 See Article 4(2) of the draft decree. 
19  See, e.g., paragraph 3.2 of ECB Opin ion CON/2008/52 of 17 October 2008 at the re quest of the Spanish State Secretary 
for Economic Affairs on a Royal Decree-L aw creating a Fund for the acquisition of financial assets and on a Royal 
Decree-Law adopting urgent financial and economic measures in  relation to the concerted European action plan of the 
euro area countries. 
20  See Article 9(2) of the draft decree. 
4 prohibition on central bank financing of public sector obligations vis-à-vis third parties21. In 
particular, the ECB understands that any pa youts of amounts by the Banca d’Italia under 
Article 9(2) of the draft decree will always be made on the basis of the prior transfer by the Government of all the required funds and that no credit or liability to pay out will exist between the 
Banca d’Italia and the beneficiary banks and, fina lly, that the payouts will not lead in any case to 
the provision of overdraft credit facilities with the Banca d’Italia.  
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 12 November 2008. 
 
[signed] 
 
The Vice-President of the ECB 
Lucas D. PAPADEMOS  
                                                 
21  See Article 1(1)(b)(ii) of Council Regulation (EC) No 3603/93 of 13 Decemb er 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).