EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 13 January 2010  
on the consolidation of deposit banks 
(CON/2010/9) 
 
Introduction and legal basis  
On 9 December 2009, the European Central Bank (ECB) received a request from the Finnish Ministry of 
Finance for an opinion on a proposal for a law on the consolidation of deposit banks (hereinafter the 
‘draft law’) and certain related laws. 
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 sixth indent  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 relates to rules applicable  to financial institutions insofar as they 
materially influence the stability of financial ins titutions 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 
The draft law concerns the consolidation of deposit ba nks, in particular the rules applicable to central 
bodies and affiliated credit institutions as referre d to in Article 3 of the Banking Directive
2. The main 
purpose of the draft law is to allow such group structur es to apply to all deposit banks irrespective of their 
company form, thus widening the scope of the present legislation which only applies to cooperative banks 
in this respect. According to the explan atory memorandum, the draft law further aims, inter alia,  to 
clarify the rules concerning the supervision of the solv ency of the affiliated institutions, to strengthen the 
supervisory powers of the central body and to strength en the system of mutual liability of the affiliated 
institutions. 
The draft law provides for general requirements for th e formation of a consortium, namely that: (1) the 
central body supervises and monitors its affiliated credit institutions; (2) the combined minimum amount 
of assets and liquidity of the companies belonging to  the consortium are monitored in a consolidated 
manner at the consortium level; (3) the central body is liable for the debts of affiliated credit institutions, 
which are obliged to take part in support measures to  prevent the liquidation of an individual institution 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  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. 
2 and to contribute towards payments by the central body to settle the debt of an individual institution; and 
(4) the majority of affiliated credit institutions are deposit banks. 
The draft law requires a central body to apply for a licence from the Financial Supervisory Authority and 
imposes certain restrictions with regard to the busin ess activities of a central body. In order to strengthen 
the binding effect of the rules laid down by a ce ntral body, the draft law provides that an affiliated 
institution can lose its affiliate status in the even t of significant non-compliance with such rules. 
In addition, proposed amendments to the Law on th e Government guarantee fund would allow financial 
support to also be granted to a central body whic h distributes the support to affiliated institutions. 
 2. Specific observations According to Section 8 of the draft law, an affiliate d credit institution can withdraw or be dismissed from 
the central body under certain conditions. In the case of  a voluntary withdrawal, the combined amount of 
assets of each company belonging to the consortium mu st remain as required under Section 19 of the draft 
law. Grounds for dismissal are, inter alia , a failure of the affiliated cred it institution to comply with the 
guidelines issued or general operational principles verified by the central body. 
The ECB understands that, according to Section 29 of the draft law, in the event of a withdrawal or 
dismissal, the provisions concerning a member credit in stitution’s liability to pay its share to the central 
body are applicable for up to five years from the end of the calendar year during which the withdrawal or 
dismissal took place. In the case of voluntary withdr awal it is understood from Section 8 that the solvency 
of the credit institution shall be confirmed by calculations  verified by the auditors of the central body. The 
ECB notes however, that the draft law does not include provisions as to how the solvency and liquidity of the disconnected credit institution sh all be ensured in case of dismissal due to non-compliance. For 
reasons of clarity and to safeguard the interests of  depositors and creditors as well as the stability of the 
financial system, the ECB would recommend clarifying this aspect in the draft law. 
The ECB understands that the withdrawal or dismissal of an affiliated credit institution from a central 
body would be without prejudice to the minimum reserve  holding obligations of the credit institution in 
question, in the event that its minimum reserves have been held, until its withdrawal or dismissal, through 
that central body, in its capacity as intermediary, pursuant to Article 10 of Regulation ECB/2003/9
3 on the 
application of minimum reserves. 
 This opinion will be published on the ECB’s website.  Done at Frankfurt am Main, 13 January 2010. 
[signed] 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
3   OJ L 250, 2.10.2003, p. 10.