EN ECB -PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 29 July 2014  
on reorganisation and wind ing-up measures regarding Hypo Group Alpe Adria  
(CON/2014/ 61) 
 
Introduction and legal basis  
On 11 June 2014 the European Central Bank (ECB) received a request from the Austrian Ministry of 
Finance for a n opinion on a draft law on reorganisation and wind ing-up measures regarding Hypo  Group  
Alpe Adria , including the establishment of a run -off unit1 (hereina fter the ‘draft law’).  
The ECB’s competence to deliver an opinion is based o n Articles 127(4)  and 282(5) of the Treaty on the 
Functioning of the European Union and on the sixth indent of Article 2(1) of Council 
Decision  98/415/EC2, as the draft law relates to  the rules applicable to financial institutions insofar as 
they materiall y 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 Go verning Council 
has adopted this opinion.  
 
1. Purpose of the draft law  
1.1 Under the  draft la w3, Hypo Alpe -Adria -Bank International AG (HBInt) can be turned into a 
deregulated run-off unit that does not have to comply with own funds and liquidity rules for credit 
institutions . The unit can be established  once HBInt’ s banking lice nce lapses , which will occur 
when  the Financial Market Authority (FMA) issues a notice confirming that  HBInt  has cease d its 
deposit -taking  business and no longer has  any qualifying holdings in other credit institutions or 
investment firms. The purpose of t he run -off unit is to wind down HBInt’s remaining portfolio and 
to realise its assets. HBInt  is obliged to establish a run -off plan to this effect, and may only  conduct 
business  transactions  that serve  this purpose . Such transactions include  banking activi ties, with the 
                                                 
1  Federal Law adopting the Federal Law establishing a divestment unit (GSA), the Federal Law incorporating a federal 
divestment holding company for HYPO ALPE -ADRIA -BANK S.P.A. (HBI Federal Holding Law), the Federal Law in-
corporating a federal divestment (public limited) company (ABBAG Law) and the Federal Law on the reorgani sation of 
HYPO ALPE ADRIA B ANK INTERNATIONAL AG (HaaSanG) and amending the Law on financial market stability 
and the Law on the Financial Market Supervisory Authority.  
2  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorit ies 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).  
3  Federal Law establishing a divestment unit (GSA).  
ECB -PUBLIC  
2 exception of deposit -taking  business . Nevertheless , only certain provisions of the Law on banking4 
apply  to the run -off unit , including  the requirement that its managing directors and the members of 
the supervisory board  are fit and proper p ersons to hold such positions , and provisions relating to 
internal audit s, the prevention of money laundering  and accounting.  The draft law also e nables  the 
Minister for Finance (MoF) to transfer assets and liabilities  of HBInt  to third party institution s and 
authori ses the MoF to establish a run -off holding company to take over and administer the shares in 
the run -off unit5. 
1.2 The draft law6 authori ses the MoF to establish a separate holding company (HBI -Bundesholding 
AG) to take over all of HBInt ’s shares in its Italian subsidiary , Hypo Alpe -Adria -Bank S .P.A. 
1.3 The draft law7 also enables  the cancellation and deferral of liabilities  and contains  other  measures 
regarding HBInt  that aim to  facilitate the run -off of the bank. The draft law provides  that c ertain 
subordinated8 and shareholder liabilities are extinguish ed on publication of a regulation  to that 
effect  by the FMA. At the same time,  most  guarantees and collateral for such liabilities terminate 
by operation of law , with the exception of  certain d isputed liabilities.  The due date in respect of 
such disputed liabilities is deferred until the making of a final court order in respect of the liability 
in question . The draft law also  disapplies creditors’ contractual or statutory rights to terminate  their 
relationship with a reorganised entity , seek the  alteration  of terms , or enforce  security as a 
consequence of  the reorganisation and winding -up measures9. The draft law appoints the FMA as 
the competent authority to implement the reorganisation and wind ing-up measures. The 
explanatory memorandum accompanying the draft law  explains that  statutory measures ensuring  
that the losses  arising from the reorganisation  and winding -up are borne by  lower ranking creditors 
and former shareholders with a close relati onship to HBInt  are justified  in order to achieve the 
Government ’s aims of achieving an orderly run -off of the bank and preserv ing financial stability.  
1.4 The draft law also enables  the MoF to provide measures pursuant to the Law on f inancial market 
stability10 in respect of the run -off unit and to raise th e maximum amount  of costs of 
recapitalisation measures  permitted thereu nder from EUR 15 to EUR 22 billion.  These funds are 
financed from the general budget without direct recourse to bank levies . 
 
2. Gene ral observations  
2.1 The ECB notes that the draft law was adopted by the National Council on 8 July 2014 , and reminds 
                                                 
4  Federal Banking Law No 532/1993, as amended.  
5  Federal Law incorporating a federal divestment (public limited) company (ABBAG Law).  
6  Federal Law incorporating a federal divestment holding company for HYPO ALPE -ADRIA -BANK S.P.A. (HBI Fe deral 
Holding Law).  
7  Federal Law on the reorgani sation of HYPO ALPE ADRIA BANK INTERNATIONAL AG (HaaSanG).  
8  A list of the relevant subordin ated liabilities is listed in Annex 1 to the HaaSanG.  
9  See Article 5 of the HaaSanG.  
10  Federal Law amending the Law on f inancial market stability.  
ECB -PUBLIC  
3 the consulting authority that  Article 4 of Decision 98/415/EC  requires that t he ECB must be 
consulted ‘at an appropriate stage’ in the leg islative process. This implies that the consultation 
should take place at a point in the legislative process that gives the ECB sufficient time to examine 
the draft legislative provisions and adopt its opinion. The ECB requests that, in future, the Austria n 
authorities comply with  their obligation to consult the ECB at an appropriate stage.  
2.2 The ECB understands that the MoF ’s right  to transfer assets and liabilities of HBInt to third parties 
aims at safeguar ding the deregulated status of Hypo Group Alpe Adria in the event that it cannot be 
turned into  a run -off unit  because HBInt  is still conducting deposit -taking  business or maintaining 
qualifying holdings  in other credit institutions or investment firm s. 
2.3 The ECB also understands that the MoF ’s right  to dispose of the share s in the Italian subsidiary 
Hypo Alpe -Adria -Bank S .P.A. will create a legal basis for the shares in this subsidiary to be sold 
without hindering the run -off. 
 
3. Specific observations  
3.1 Conduct  of banking and leasing activit ies by the run-off unit  
Once HBInt  has been turned  into a run -off unit, the run -off unit may continue to conduct banking 
and leasing activities if such activities either directly or indirectly serve the purpose of the run-off. 
In this context the ECB is concerne d that the run -off unit will be partly  deregulated but remain  
entitled to conduct banking  activities . The condition that such business ‘directly or indirectly ’ 
serve s the purpose of the run -off is loosely worded and therefore open to broad  interpretation . This 
appears in appropriate in view of the need for thorough and consistent regulation of the financial 
sector . The refore,  the draft law should define more precisely the conditions to be  met in order for 
the deregulated run -off unit to carry on  banking  and leasing  activities . 
3.2 Relation ship with Directive 2001/24/EC  
Article 6 of the draft law states that the Federal Law on the reorganisation of Hypo Alpe Adria 
Bank International AG serves the purpose of transpos ing Directive 2001/24/EC11. The ECB 
understand s that the sole purpose of this provision is to establish that measures provided for in the 
draft law are reorganisation measures within the meaning of Article 2 of that Directive.  
3.3 Relation ship with Directive 2014/59/EU  
Directive 2014/59/EU12 entered in to force on 2 July 2014. The ECB notes  that the draft law is not 
                                                 
11  Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisati on and win ding 
up of credit institutions (OJ L 125, 5.5.2001, p. 15).  
12  Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for the 
recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, and D i-
rectives 2001/24/EC, 2002/47/EC, 2004/25/EC, 2005/56/EC, 2007/36/EC, 2011/35/EU, 2012/30/EU and 2013/36/EU, 
and Regulations (EU) No 1093/2010 and (EU) No 648/2012, of the European Parliament and of the Counc il (OJ L 173, 
12.6.2014, p. 190).  
ECB -PUBLIC  
4 intended  to implement the resolution framework or any of the specific resolution  tools under that 
Directive , but establishes  a special wind -down regime purely in respect of  Hypo Group Alpe Ad ria. 
3.4 Relation ship with the Single Resolution Fund  
The ECB notes that Article 3(4) of the Agreement on the transfer and mutualisation of 
contributions to the Single  Resolution Fund provides that any amount disbursed by the resolution 
financing arrangeme nt of a Contracting Party prior to the date of application of th e Agreement in 
respect of resolution actions within its territory shall be  deducted from those contributions to be 
transferred by that Contracting Party to the Single Resolution Fund . The ECB understands that the 
draft law does not intend to transpose Directive 2014/59/EU  or parts of it , and that the measures  
envisaged for the reorganisation and winding -up of Hypo Group Alpe Adria  will not be financed 
from the national resolution fund to be established under  Directive 2014/59/EU . It should therefore 
be ensured that any amounts disbursed for the purpose  of reorganising and winding up Hypo Group 
Alpe Adria  are not deducted from Austria’s contributions to the Single Resolution Fund under the 
abovem entioned Agreement . 
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 29 July 2014 . 
 
[signed]  
 
The President of the ECB  
Mario DRAGHI