EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 28 May  2015  
on amendments to the legal framework governing the   
Slovenian Bank Asset Management Company 
(CON/20 15/16) 
 
Introduction and legal basis  
On 24 April 2015  the European Central Bank (ECB) received a request  from the Slovenian Ministry of 
Finance  for an opinion on  a draft law amending the Law on Slovenia’s measures to strengthen bank 
stability (hereinafter the ‘draft law’).  
The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of t he Treaty on the 
Functioning of the European Union and the third and sixth indent s of Article  2(1) of Council Decision 
98/415/EC1, as the draft law relates to Banka Slovenije and to rules applicable to financial institutions 
insofar as they materially infl uence the 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 law  
1.1 The Law on Slovenia’s measures to strengthen bank stability2 (hereinafter the ʻLaw on bank 
stabilityʼ) entered into force in December 2012. With the objective to strengthen the stability of the 
Slovenian financial system, it provided for the establishment of the State- owned Bank Asset 
Management Company (BAMC) and a number of stabilisation measures including: (i) the transfer 
of bank s’ impaired assets to the BAMC ; (ii) the issuance of State guarantees for the liabilities of the  
BAMC; and (iii) the recapitalisati on of banks by the State. Detailed rules implementing the Law on 
bank stability were laid down in secondary legislation, specifically the R egulation on the 
implementation of measures to strengthen bank  stability3 (hereinafter the ʻRegulationʼ). Both 
legislative acts were the subject of consultations with the ECB4. 
1.2 The stabilisation measures provided for in the Law on bank stability have been implemented in 
certain distressed Slovenian banks. According to the explanatory memorandum to the draft law, 
although the impaired assets have been removed from the balance sheets of these banks, and 
                                                 
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  Zakon o ukrepih Republike Slovenije za krepitev stabilnosti bank  (ZUKSB)  (Uradni list RS,  Nos 105/2012, 63/13 –  
ZS-K and 23/14 –  ZDIJZ- C). 
3  Uredba o izvajanju ukrepov za krepitev stabilnosti bank  (Uradni list RS , No 103/13).  
4  See ECB Opinions CON/2012/71, CON/2013/21, CON/2013/67 and CON/2013/86. All ECB Opinions are published 
on the ECB’s website at www.ecb.europa.eu.  
ECB -PUBLIC  
2 they have been recapitalised, this is not enough to ensure that they operate successfully as, to 
provide  credit , banks also need restructured companies with sound business plans . It is therefore  
important to actively and comprehensively pursue the restructuring of companies  and t he BAMC  
plays an important role in this  process.   
1.3 In order to further improve the efficient funct ioning of the BAMC in that role, the draft law  introduces 
a number of adjustments and amendments to the Law on bank stability, in particular to better clarify  
the legal framework of the BAMC and of its activities. T he draft law specif ies more clearly  the 
objectives  of the Law on bank stability , in particular  the role of the BAMC in corporate restructuring.  
The draft law s ets out the criteria under which the BAMC may engage in the restructuring of 
companies of which it is a shareholder or creditor , and allow s the BAMC to carry out any legal 
transaction necessary for  the successful restructuring of such companies , including providing loans 
to its debtor s or guarant eeing  its debtor s’ liabilities . The draft law sets out the conditions under 
which the BAMC may establish, and purchase new shares in, companies , including special 
purpose vehicles , also with a view to achiev ing a more economical or specialised management and 
disposal of the BAMC’s assets . In addition, t he draft law  provides that  the BAMC may require a 
bank , which was previously subject to stabilisation measures  under the Law on bank stability , to 
transfer to the BAMC claims  against or shares in a company in which the BAMC already holds  
shares  or against which the BAMC already has claims , in exchange for cash compensation equal 
to the market value of the asset s being  acquired.  The draft law also extends the BAMC’s mandate  
from 2017 until 2022, with the aim of maximising returns on public funds . 
1.4 Some of the proposed amendments under the draft law incorpor ate legislative provisions which 
were origina lly contained  in the Regulation , which is secondary legislation, into the Law on bank 
stability , the national primary legislation.  These proposed amendments refer , in particular,  to the 
BAMC’s borrowing, its debt management, limitation s on the payment of it s dividends and the 
provision of information on the BAMC’s activities to the ECB.  
1.5 The draft law also includes an explicit requirement  that the BAMC operates in a transparent, 
economical, efficient and effective manner, and contains further  provisions to this end. In addition, 
it aims to ensur e the independence of the BAMC in managing its assets , inter alia, by clarifying that 
the supervisory competences of the Ministry of Finance encompass the lawfulness of the BAMC’s 
operations. F or this purpose the Ministry  of Finance  may issue  guidelines to the BAMC to be 
followed, which  must , however, be general and may not constitute instructions for action in 
individual cases.  The draft law also explicitly clarifies that the responsibility for the management of 
the BAMC rests with its executive directors . 
1.6 Additionally, the draft law removes the liability of the State for all liabilities of the BAMC. This 
amendment is not in any way related to, and does not affect, the guarantees that the State issues 
for the BAMC’s bonds in the context of a stabilisation measure provided for by the Law on bank stability.  
1.7 The draft law also contains amendments to other provisions of the Law on bank stability. Among others,  it removes the requi rement for the BAMC to set up a ‘fund’ without legal personality, which 
proved to be an obsolete requirement and leaves creating such a fund optionally. The draft law 
also provides for certain exemptions for the BAMC in the application of various national laws.  
ECB -PUBLIC  
3 Finally, the draft law clarifies the consultative role of Banka Slovenije in the adoption of the rules 
implementing the Law  on bank stability . Accordingly, when Banka Slovenije is to be consulted in 
the preparation of acts implementing the Law on bank stability , the Ministry  of Finance shall explain 
any deviation from Banka Slovenije’s opinion.  
 
2. General observation s 
The ECB recognises  the effort  to enhance the role of the BAMC in facilitat ing the restructuring of 
companies . This should ultimately help improv e access to credit for the corporate sector , facilitat e 
lending to it by the banking sector , as well as support the recovery and functioning of the real 
economy.  The ECB also notes  and supports  the effort to ensur e that the BAMC operates  in a 
transparent, economical, efficient and effective manner , with a view to maximising the recovery 
value of assets acquired and,  thus, minimising the costs borne by the public . As noted in previous 
Opinions5, conforming with a comprehensive and transparent asset  management and divestiture 
strategy, observing internationally recognised best practice as regards corporate governance, 
including maintaining independent management of the BAMC, is  important for  achieving the targets 
the BAMC  has been set . 
  
3. Specific observations  
3.1. Provision of information to the ECB and Banka Slovenije, BAMC’s cash protocol and the eligibility 
of bonds  in Eurosystem operations   
3.1.1 In its previous Opinions the ECB recommended, in the context of a financial plan , that the 
necessar y legal arrangements  are provided to ensure, in a transparent manner, the timely 
redemption of State- guaranteed BAMC bonds  and other financial instruments or credit claims of 
transferring banks  (hereinafter the ‘cash protocol ’)6. This recommendation has been followed  by 
the Slovenian authorities in the Regulation and t he ECB notes that  several of its observations7 are 
reflected in the final text  thereof . The ECB further notes that such final text also included a new 
provision according to which t he BAMC may  share with the ECB the information on its operations . 
3.1.2  The draft law  incorporates  certain provisions  from the Regulation that constitut e the framework for 
the BAMC’s  cash protocol and permi t the BAMC  to provi de information on its operations , within 
their respective areas of competence,  to the ECB and Banka Slovenije8. The ECB understands  
that these proposed amendments are aimed at increasing legal certainty  and that the provisions 
regarding the detailed elements of the cash protocol in the Regulation remain unchanged in 
substance.   
3.1.3 The draft law  infers that the cash protocol arrangements for the BAMC and the provision of 
information on its operations to the ECB and Banka Slovenije are aimed at ensuring that the 
                                                 
5  See second subparagraph 7 of the Opinion CON/2013/21.  
6  See paragraph 6 of the ECB Opinion CON/2013/21 and paragraph 7 of the ECB Opinion CON/2013/67.  
7  See paragraphs 4.1, 4.3 and 4.4 of the ECB Opinion CON/2013/86.  
8  See Article 4(7) , Article 10a(9) to (15)  and Article 12(3) of the Law on bank stability, as amended by the draft law . 
ECB -PUBLIC  
4 BAMC’s State -guaranteed bonds quali fy as eligible collateral for ECB monetary policy operations9. 
The ECB reiterates  that it remains  the prerogative of the Eurosystem to decide, on the basis of any 
information it may consider relevant within the legal framework laid down in and according to  
Article  18.1 of the Statute of the European System of Central Banks and of the European Central 
Bank, whether the relevant financial instruments and credit claims fulfil the criteria of its collateral 
framework10. 
3.2 Transfer of assets from banks at  market value, granting loans and providing guarantees by the 
BAMC  
3.2.1  The ECB understands  that the purpose of the option under the draft law  for the BAMC to require 
the transfer of certain assets from banks11 is to enhanc e its ability to concentrate claims and equity 
participations in particular companies12 within the BAMC in order to strengthen the BAMC’s 
position relative to other creditors and/or shareholders  in those companies , and with a view solely 
to facilitating the restructuring processes  of those companies . In this regard the ECB notes that the 
BAMC should not require such transfer s where it could lead to non-compliance by the original 
asset holder with prudential requirements as laid down  in Regulation (EU) 575/2013 of the 
European Parliament and of the Council13 and Directive 2013/36/EU  of the European Parliament 
and the Council14. In this regard the ECB recommends implementing a provision requiring the 
cons ultation  of the competent supervisory authority prior to a request for the transfer of assets.  The 
ECB further notes that any transfer of assets to the BAMC must comply  with EU State aid rules  and 
the applicable v aluation standards  in determining the market value of the asset. In this context, the 
determination of the market value in accordance with the International Valuation Standards by an 
independent appraiser is important . 
3.2.2  According to the draft law, the BAMC may grant loans  and provide guarantees to debtors in whose 
restructuring it has participated15. In this context, the ECB notes that the BAMC is not subject to 
prudential regulation or supervision,  nor does it aim to perform any activities which would require a 
licence  for the provision of banking services  within Slovenia or abroad16. However, as the BAMC 
may, by requesting assets, granting loans and providing guarantees, be exposed to significant 
credit risks, the ECB recommends that the draft law provides safeguards preventing the BAMC 
from incurring losses due to an inappropriate management of that credit risk. In this regard, t he 
ECB expects the BAMC  to grant loans and provide guarantees to its debtors only on the basis of 
                                                 
9  See the explanatory m emorandum  and Article 10a(15)  of the Law on bank stability as amended by the draft law . 
10  See paragraph 5.5 of ECB Opinion CON/2012/71 and paragraph 5 of ECB Opinion CON/2013/21.  
11  See Article 11(2)  of the Law on bank stability as amended by the draft law.  
12  I.e. in those companies, in which the BAMC already holds shares or against which the BAMC already has claims as 
a result of having received those claims and shares when their transfer to the BAMC was implemented as a 
stabilisation measure under the Law on bank stability,  
13  Regulation (EU) 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential 
requirements for credit institutions and investment firms and amending Regulation (EU) No 648/2012 (OJ L 176, 
27.6.2013, p.  1). 
14  Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of 
credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 
2002/87/EC and repealing Di rectives 2006/48/EC and 2006/49/EC  (OJ L 176, 27.6.2013, p. 338) . 
15  See Article 10a(5) of the Law on bank stability as amended by the draft law  and the explanatory memorandum 
thereto.  
16  See Article 11(9) of the Law on bank stability as renumbered by the draft law.  
ECB -PUBLIC  
5 sound economic criteria and a rigorous assessment of the borrowers’ creditworthiness , avoiding 
any distortion to market s. 
 
This opinion will be published on the ECB’s website.  
  
Done at Frankfurt am Main,  28 May 2015.  
 [signed]  
 
The President of the ECB  
Mario DRAGHI