EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 5 April 2012 
on Belgian covered bonds and on measures to facilitate the mobilisation of credit claims  
(CON/2012/28) 
 Introduction and legal basis
 
On 14 February 2012, the European Central Bank (E CB) received a request from the Nationale Bank van 
België/Banque Nationale de Belgique  (NBB), acting on behalf of the Belgian Ministry of Finance, for an 
opinion on three pieces of draft legislation (hereinafter together the ‘draft legislation’) comprising: (1) a 
draft law establishing a legal framework for Belgian c overed bonds (hereinafter the ‘draft law on Belgian 
covered bonds’); (2) a draft royal decree on the is suance of Belgian covered bonds by Belgian credit 
institutions (hereinafter the ‘draft royal decree’); a nd (3) a draft law on various measures to facilitate the 
mobilisation of claims in the financial sector (hereinafter the ‘draft law on mobilisation of credit claims’).  
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 third, fi fth and sixth indents of Article 2(1) of Council 
Decision 98/415/EC of 29 June 1998 on the consu ltation of the European Central Bank by national 
authorities regarding draft legislative provisions1, as the draft legislation contains provisions concerning 
the NBB, payment and settlement systems, as well as ru les applicable to financia l institutions insofar as 
they materially influence 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 legislation 
1.1 The draft legislation aims to set up a comprehe nsive legal framework in Belgian law to allow for 
the issuance of covered bonds that comply with European legislation
2, in order to facilitate the 
refinancing of credit institutions, whilst defini ng appropriate legal mechanisms to protect the 
holders of these new debt instruments3.  
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  Directive 2009/65/EC of the European Parliament and of  the Council of 13 July 2009 on the coordination of laws, 
regulations and administrative provisions relating to undertakings for collective investment in transferable securities 
(OJ L 302. 17.11.2009, p. 32) and 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 institutions (OJ L 177, 30.6.2006, p. 1). 
3  Explanatory memorandum to the draft law on Belgian covered bonds, p. 1.  
ECB-PUBLIC 
2 1.2 The draft law on Belgian covered bonds defines:  (a) the institutions allowed to issue Belgian 
covered bonds, i.e. all credit ins titutions incorporated in Belgium4 and the additional authorisation 
requirements to carry out such activity5; (b) the types of assets eligible  for inclusion in the cover 
pool of Belgian covered bonds6, as well as the rules governing the valuation and composition of the 
cover pool; (c) the nature of the cover pool as a separate pool of assets of the issuer, segregated 
from its general, assets but without separate legal personality and remaining on the issuer’s balance 
sheet and set aside exclusively for the reimburse ment of the holders of  Belgian covered bonds7; and 
(d) the regime for managing that separate pool of  assets, the conditions for appointing a portfolio 
manager and their powers8. Furthermore, the draft law on Belgian covered bonds addresses the 
consequences of the opening of an insolvency pr ocedure with respect to the covered bonds issuer9, 
notably with regard to the rights of the covered bond holders and their preferential treatment. In the 
event of the issuer’s insolvency, the covered bond hol ders are to have a claim to the proceeds of the 
realisation of the cover pool assets in priority to  all creditors of the issuing credit institution, 
whether secured or unsecured10.  
Further provisions in relation to the cover pool  assets are set out in the draft royal decree11. The 
draft royal decree also contains specific provisions concerning the register of cover pool assets, the NBB’s power to impose a limit on the volume of co vered bonds that may be issued by a specific 
institution, and the tasks of the portfolio monitor
12. 
Finally, the draft law on the mobilisation of credit claims addresses some technical legal issues in 
order to make it possible, in practice, to  mobilise a sufficient volume of credit claims13. 
 2.  General observations 
2.1 The ECB welcomes the draft legislation, as it w ill enable credit institutions to issue covered bonds 
that are attractive to a wide range of investor s and expand their ability to use credit claims as 
collateral, thereby enhancing access to sources of refinancing by credit institutions.  
                                                 
4  The draft law on Belgian covered bonds will be inserted into the Belgian Law of 22 March 1993 on the status and 
supervision of credit institutions (hereinafter ‘the Law of 22 March 1993’), within title II “Credit institutions incorporated 
under Belgian law”. 
5  New Articles 64/2 to 64/5, 64/21 a nd 64/22 of the Law of 22 March 1993. 
6  Notably, mortgage claims and claims  on public sector entities (new Article 64/3§3 of the Law of 22 March 1993). 
7  New Articles 64/8§1 and 64/11 of the Law of 22 March 1993. 
8  New Articles 64/12 to 64/15 of the Law of 22 March 1993. 
9  New Article 64/16 of the Law of 22 March 1993. 
10  New Article 64/11, of the Law of 22 Marc h 1993, especially the second subparagraph. 
11  Notably, these provisions concern: additional requirements  for cover assets, conditions for including hedging instruments 
in the cover pool, the composition and valuation of cover assets, the liquidity of the cover pool (Articles 3 to 7).  
12  Articles 9 to 11 of the draft royal decree.  
13  See the explanatory memorandum to the draft law on the mobilis ation of credit claims, p. 3. This includes measures such 
as removing restrictions for pledgi ng and transferring claims on the adjudicating body arising from the public 
procurement legislation (proposed Article 3); disapplying certain requirements to third party enforceability of a set-off 
(proposed Article 6); in the context of Belgian covered bonds, pr otecting the transfer of claims against the insolvency of 
the transferor (proposed Article 8); ensuring ranking agr eements concerning mortgage  claims are automatically 
enforceable on third parties(proposed Articles 11 to 17), etc. 
ECB-PUBLIC 
3 2.2 The draft law on covered bonds provides that credit institutions may pledge their own covered 
bonds (i.e. covered bonds that they have issued them selves) as collateral for the intraday credit and 
monetary policy credit operations of the NBB, in accordance with the procedures and conditions 
determined by the NBB14. The draft law further provides that a credit institution may maintain 
minimum reserves for each separat e pool of assets with the NBB15.  
2.3 The ECB emphasises that it lies within the Euro system’s exclusive competence to decide what 
collateral and which counterparties to accept for its monetary policy operations, as well as to 
determine how minimum reserves are to be held by credit institutions with the relevant national 
central bank16.  
 The ECB understands that the reference in the draf t legislation to the eligibility of own covered 
bonds as collateral17 is exclusively aimed at maximising legal certainty with regard to the validity 
of the acquisition and holding of own securities under Belgian company law18. Hence, it does not 
appear necessary to specify the purpose for wh ich such own covered bonds can be subscribed, 
acquired or held (i.e. ‘notably to pledge them  as collateral in NBB credit operations’). This 
specification should ideally be deleted to avoid any misinterpretation regarding the exclusive nature 
of the Eurosystem’s competence.  
 The ECB understands that the draft legislation does not affect the minimum reserve requirements 
of individual credit institutions as imposed by the Eurosystem, but solely lays down an implementation rule at the national level, allowi ng an individual credit institution to divide the 
minimum reserves it is required to hold with the NBB between different accounts
19. However, to 
fully respect the exclusive Eurosy stem’s competence in this field, this provision should not be 
specified by the national legislator but should be  left to the NBB’s discr etion, subject to the 
requirements defined by the Eurosystem.  
 This opinion will be published on the ECB’s website.  Done at Frankfurt am Main, 5 April 2012. 
[signed] 
The President of the ECB 
Mario DRAGHI 
                                                 
14  New Article 64/17§1 of the Law of 22 March 1993. 
15 New Article 64/17§3 of the Law of 22 March 1993.  
16 See in this respect also ECB Opinion CON/2010/47, paragraph 2.3.  
17  New Article 64/17§1 of the Law of 22 March 1993.  
18  Explanatory memorandum to the draft law on Belgian covered bonds, p. 35. 
19  New Article 64/17§3 of the Law of 22 March 1993.