EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 22 June 2006  
at the request of the French Senate on a draft law on the Banque de France 
(CON/2006/32) 
 
Introduction and legal basis  
On 30 May 2006, the European Central Bank (ECB) rece ived a request from the French Senate for an 
opinion on a draft law ( proposition de loi ) on the Banque de France (hereinafter the ‘draft law’). 
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 fourth 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 law amends the Banque de France’s Statute and relates to the 
collection, compilation and distribution of monetary, financial, banking, payment systems and balance of 
payment statistics. 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 draft law replaces the Banque de France’s M onetary Policy Council (MPC) with a new body, 
the Monetary Committee of the General Council (h ereinafter the ‘Monetary Committee’), which 
would form part of the Banque de France’s Genera l Council, whose task it is to administer the 
Banque de France
2. The Monetary Committee would be composed of seven members as is 
currently the case for the MPC: the Banque de Fr ance’s Governor and the two Deputy Governors, 
as well as four other members3. While the Monetary Committee would continue to examine 
monetary trends and analyse the implications of  the monetary policy formulated within the ESCB 
framework4, its tasks would be expressly extended in  the Banque de France’s Statute to the 
adoption of the measures transposing the ECB’s guidelines5. The draft law defines the conditions 
of appointment of the four members of the Mone tary Committee, other than the Governor and the 
                                                 
1  OJ L 189, 3.7.1998, p. 42. 
2  Current Article L.142-6 of the Mone tary and Financial Code (MFC). 
3  Article L. 142-3 and Article L. 142-5 of the MFC, as proposed by the draft law. 
4  First paragraph of Article L. 142-4 of the MFC, as proposed by the draft law. 
5  Second paragraph of Article L. 142-4 of the MFC, as proposed by the draft law. 
2 Deputy Governors, as well as the incompatibility regi me with regard to the possibility of carrying 
on other professional activities and the rules relating to conflicts of interest applicable to them. 
1.2. The draft law also introduces into the Banque de France’s Statute a confirmation of the central 
bank’s role and powers when collecting the statis tical data needed to establish the balance of 
payments6. A specific provision deals with the possibility for the Banque de France to receive 
information from undertakings and professional associ ations relating to their financial situation and 
to communicate this information to central banks, to other institutions performing similar tasks and 
to credit institutions and financial institutions7. Finally, the draft law provides that the dividend 
paid by the Banque de France to the State w ill be increased by the amount of the savings on 
remuneration credits which result from this law8. 
 2. Reform of the Banque de France’s decision-making bodies 
Creation of the General Council’s Monetary Committee 
2.1 The purpose of the reform of the Banque de Fr ance’s decision-making bodies is to take into 
account the transfer of monetary policy responsibilities to the ECB
9 and to simplify the Banque de 
France’s management and supervisory bodies by grouping them together10. The draft law provides 
for the MPC’s disbanding. The ECB notes in this re spect that, since the transfer of the monetary 
policy powers to the ESCB, the ECB’s Governin g Council is the single collegial decision-making 
body defining the euro area’s monetary policy a nd, in particular, the body that adopts the 
guidelines and takes the decisions necessary to ensu re the performance of the Eurosystem’s tasks. 
In this context, the ECB welcomes the clarification brought by the abrogation of the MPC.  
2.2 At the same time, the MPC will be replaced by the Monetary Committee, a body which will form 
part of the General Council. The draft law simplif ies the conditions currently applicable to the 
appointment of the members of the MPC, other than the Governor and the Deputy Governors11, in 
order to take into account the evolving functions of the MPC12. According to the preamble to the 
draft law, this should result in a significant downw ard adjustment of the remuneration of the four 
members of the Monetary Committee other than the Governor and the Deputy Governors13. One of 
the main changes introduced by this reform will be that the Monetary Committee members will be 
able to carry out other professional activities if certain conditions are fulfilled14. 
                                                 
6  Article L. 141-6 of the MFC, as proposed by the draft law. 
7  Article L. 144-1 of the MFC, as proposed by the draft law. 
8  Article 7 of the draft law. 
9  Second sentence of the preamble to the draft law. 
10  Preamble to the draft law, Article 1. 
11  Cf. the current Article L. 142-3 of the MFC and Article  L. 142-5 of the MFC, as proposed by the draft law. 
12  Preamble to the draft law, seventh paragraph. 
13  Preamble to the draft law, seventh paragraph. 
14  Fourth paragraph of Article L.142-7 of the MF C, as proposed in Article 1 of the draft law. 
3 Personal independence 
2.3. As a matter of principle, membership of a d ecision-making body involved in the performance of 
ESCB-related tasks is incompatible with the exerci se of other functions that might create a conflict 
of interest15. Concerning the Monetary Committee members (other than the Governor and Deputy 
Governors), the ECB notes in this respect that th e draft law provides for a specific incompatibility 
regime and a set of rules on avoiding conflicts of interest. 
2.4. As regards the incompatibility regime provided for in the draft law16, the above four members of 
the Monetary Committee may not perform any duti es or hold any interests in regulated entities17 
and may not hold any parliamentary office18. The ECB would recommend extending this 
incompatibility regime to the holding of an “offi ce in the executive or legislative branches of the 
State or of regional or local administrations”19. The ECB also notes that a specific check procedure 
to prevent conflicts of interest has been set up in  the draft law and that the prior agreement of a 
majority of Monetary Committee members (excep t the interested member) is required for the 
exercise of any other professional activity20.  
2.5. The draft law provides that ‘those members of th e Monetary Policy Council appointed by decree of 
the Council of Ministers who hold office on the date  this law is published shall as of right be 
members of the Monetary Committee. Their term of  office shall not be extended after its expiry’21. 
The ECB suggests clarifying this provision to ensure  that only the four members of the Monetary 
Committee other than the Governor and the Deputy G overnors are referred to by this provision. 
Indeed, the Governor and the Deputy Governors are also members of the MPC and appointed by a Council of Ministers decree. Their mandate as members of the MPC is renewable
22 and therefore 
their mandate as members of the Monetary Co mmittee has to be renewable. The ECB also 
recommends deleting the reference to the MPC in the provision of the Statute of the Banque de France relating to litigation
23. 
2.6. Under the draft law, it is also provided that ‘If any member [of the Monetary Committee other than 
the Governor or the Deputy Governors] is unable to  complete their term of office, they shall be 
replaced immediately (…). In any such case, the person appointed shall hold office only for the 
remainder of the term of the member replaced’24. Furthermore, in such cases, contrary to the 
generally applicable rule, the terms of office of  the members of the Monetary Committee may be 
                                                 
15  ECB Convergence Report, May 2006, 3.1.3, Safe guards against conflict of interest, p. 65. 
16  Article L. 142-7 of the MFC, as proposed by the draft law. 
17  As listed in Book V of the MFC. 
18  Article L.142-7 of the MFC, as proposed by the draft law. 
19  ECB Convergence Report, May 2006, 3.1.3, Safe guards against conflict of interest, p. 65. 
20  Fourth paragraph of Article L.142-7 of the MFC, as proposed by the draft law. 
21  Article L. 142-5 of the MFC, as proposed in Article 2 of the draft law. 
22  Current last paragraph of Article L. 142-8 of the MFC. 
23  Current Article L.144-3 of the MFC. 
24  Article L.142-5 of the MFC, sixth paragraph (as proposed in Article 1 of the draft law). 
4 renewed25. However, the principle of personal indepe ndence, as laid down in Article 14.2 of the 
Statute of the European System of Centra l Banks and of the European Central Bank26, requires that 
the same rules for the security of  tenure of the office of Governor should apply to other members of 
the decision-making bodies of NCBs involved in the performance of ESCB- related tasks. As a 
consequence, the draft law should be  amended in order to bring the terms of office of a member of 
the Monetary Committee replacing another member who is unable to complete their term of office 
into line with Article 14.2 of the ESCB Statute. 
 3. Other comments 
3.1. The ECB welcomes the clarifications made on th e role of the Banque de France regarding balance 
of payments and internationa l investment position statistics
27. A decree to be adopted will set out 
the sanctions applicable in the case of breaches of reporting obligations28. The ECB understands 
that this decree will be without prejudice to the ECB’s competence to  impose sanctions on 
reporting agents for specific breaches of their statistical reporting obligations29. 
3.2. The ECB notes the following concerns regarding Article 7 of the draft law30. First, since it enables 
the French authorities to interfere with the allocati on of profits to be proposed by the Banque de 
France’s General Council, such provision might be considered as affecting the Banque de France’s 
institutional independence. Second, this provision of the draft law seems to imply that the amount 
of the savings on remuneration credits which result from this law would be automatically due to the 
French State even in th e absence of a dividend paid by the Ba nque de France. The ECB recalls that 
‘the decision on allocation of profits should be taken by the NCB’s decision-making body on 
professional grounds, and should not be subject to the discretion of third parties’31. As a 
consequence, the ECB would recommend deleting su ch provision, since it is incompatible with 
Article 108 of the Treaty as well as with the Monetary and Financial Code32. 
 
                                                 
25  Article L.142-5 of the MFC, se venth paragraph (as proposed in Article 1 of the draft law). 
26  As further explained in the ECB Convergence Repor ts of 2004 and 2006 (October 2004, 2.3.1, ‘Central bank 
independence’, p. 27 and May 2006, 3. 1.3, ‘Personal independence’, p. 64). 
27  Article L. 141-6 of the MFC, as proposed by the draft law. 
28  Article L.141-6 I and II of the MFC, as proposed in Article 2 of the draft law. 
29  See Council Regulation (EC) No 2533/98 of 23 November 199 8 concerning the collection of statistical information by 
the European Central Bank, (OJ L 318, 27.11.1998, p. 8) and Council Regulation (EC) No 2532/98 of 23 November 1998 
concerning the powers of the European Central Bank to impose sanctions, (OJ L 318, 27.11.1998, p. 4). 
30  Article 7 of the draft law provides that the dividend paid by the Banque de France to the State will be increased by the 
amount of the savings on re muneration credits which result from this law. 
31  ECB Convergence Report, May 2006, 3.1.4, ‘Distribution of profits, NCBs’ capital and fi nancial provisions’, p. 66. 
32  Fourth paragraph of the Article L.142-2, of the MFC as proposed by the draft law and current Article R.144-4 of the 
MFC (regulatory part). 
5 4.  Final observations 
4.1. Should the provisions of the draft law be subject, in the course of the parliamentary procedure, to 
substantial amendments falling within the ECB’s fi eld of competence, the ECB wishes to draw the 
consulting authority’s attenti on to the need to re-consult the ECB on these amendments. 
4.2. The ECB will also need to be consulted on th e draft amendments to the regulatory part of the 
Monetary and Financial Code pursuant to the cha nges introduced to the Statute of the Banque de 
France, as well as on the draft version of the decree referred to in Article 2 of the draft law33. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 22 June 2006. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
33  New proposed Article L.141-6, III of the MFC, as proposed by the draft law.