EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 30 December 2005  
at the request of Lietuvos bankas 
on a draft law amending the Lietuvos bankas Act 
(CON/2005/60) 
 
1. On 9 November 2005 the European Central Ba nk (ECB) received a request from Lietuvos bankas 
for an opinion on a draft law amending the Lietuvos bankas Act (hereinafter the ‘draft law’).  
2. The ECB’s competence to deliver an opinion is b ased on the first, third and fifth indents of 
Article 2(1) of Council Decision 98/415/EC of 29 June 1998 on the consultation of the European 
Central Bank by national authorities re garding draft legislative provisions1, as the draft law relates 
to currency matters, Lietuvos bankas and payment and settlement systems. 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. 
3. The ECB understands that the main objective of th e draft law is to bring the Lietuvos bankas Act 
into line with the Treaty establishing the Europ ean Community and the Statute of the European 
System of Central Banks and of the Europ ean Central Bank. In the ECB’s Convergence 
Report 20042, the ECB noted that Lithuanian legislat ion concerning Lietuvos bankas’s operations, 
including Lithuania’s Constitution, the Lietuvos bankas Act, the Act on money and the Act on 
credibility of the litas, required adaptation pursuant to Article 109 of the Treaty.  
4. The ECB notes that the draft law represents a comprehensive revi sion of the Lietuvos bankas Act. 
It welcomes the adaptations proposed in the draf t law. Once enacted, and subject to the following 
comments, the draft law will contribute to the comp letion of the legislative adaptations required for 
the abrogation of Lithuania’s derogation. The ECB no tes that the draft law is intended to enter into 
force on the day on which Lithuania’s derogation is  abrogated pursuant to the procedure provided 
by Article 122(2) of the Treaty.  
5. As a general remark, the ECB notes that the grounds  for dismissal of the Chairperson of Lietuvos 
bankas’s Board as laid down in Lithuania’s Constitu tion are not compatible with Article 14.2 of the 
Statute. Articles 75 and 84(13) of the Constitution al low the Chairperson to be dismissed following 
a vote of no confidence, which is not a ground fo r dismissal under Article 14.2 of the Statute. 
                                                      
1  OJ L 189, 3.7.1998, p. 42. 
2  Convergence Report 2004, pp. 225-226. 
2 Moreover, Article 125(2) of the Constitution, which provides that Lietuvos bankas has the 
exclusive right to issue currency, still requires ad aptation in order to bring it into line with the 
Treaty and the Statute3. The ECB also notes that certain of Lietuvos bankas’s functions and duties 
are provided for in other legal acts, such as the Act on money and the Act on credibility of the litas. The ECB draws Lietuvos bankas’s attention to the f act that such legal acts must be brought into 
line with the Treaty and the Statute prior to the abrogation of Lithuania’s derogation.  
6. The ECB welcomes the fact that Article 1 of the dr aft law clarifies that Lietuvos bankas will be an 
integral part of the European System of Cent ral Banks (ESCB) and that it will carry out the 
ESCB’s tasks in accordance with the guidelines a nd instructions of the ECB, as required by 
Article 14.3 of the Statute. Article 1 of the draf t law also states that the assets of Lietuvos bankas 
belong to Lietuvos bankas and that Lietuvos bankas ma nages, uses and disposes of these assets in 
accordance with the terms prescribed by Commun ity law and the Lietuvos bankas Act. The ECB 
understands that this provision reinforces Lietuvos  bankas’s right to manage its resources and 
contributes to the achievement of the ESCB’s obj ectives. This provision of the draft law is 
welcome.  
7. The ECB also welcomes the provisions of Article 2 of the draft law which states that, in 
accordance with the requirements of the Treaty, Lietuvos bankas has the right to issue banknotes 
and coins.  
8. The reformulated statutory objectives of Lietuvos bankas (Article 3 of the draft law) are now 
consistent with Article 105(1) of the Treaty and Article 2 of the Statute. However, Lietuvos bankas 
might consider referring to the ‘general economic policies in the Community’ instead of 
‘Community general economic policies’, in order to  reflect the wording used in the Treaty.   
9. The ECB notes that Article 4 of the draft law ma kes a distinction between ESCB-related tasks and 
the other tasks of Lietuvos bankas, listing the issuance of banknotes and coins among the former. However, the issuance of coins is the prerogativ e of Member States and not an ESCB task.  
10. Under Article 4 of the draft law Lietuvos bankas, as part of its other tasks, would be entitled to 
grant loans to credit institutions, secured by adequa te collateral in accordance with the procedure, 
conditions and terms established by Lietuvos bankas.  The ECB understands that Article 4 of the 
draft law provides for a mechanism to tackle a financial crisis if  Lietuvos bankas deems emergency 
liquidity assistance to be necessary and appropriat e in particular exceptional circumstances. The 
ECB welcomes the fact that Article 4 of the draft law states that this assistance should be provided 
‘without prejudice to the requirements derived fro m [Lietuvos bankas’s] participation in the 
European System of Central Banks’, thus providi ng a safeguard to ensure compliance with the 
prohibition on monetary financing cont ained in Article 101 of the Treaty.  
                                                     
 
3  See ECB Opinion CON/2005/38 of 26 October 2005 at the request of Lietuvos banka s on a draft law amending 
Article 125 of the Constitution of the Republic of Lithuani a; European Central Bank Convergence Report 2004, pp. 225-
226. 
3 11. According to Article 4 of the draft law, Lietuvos bankas, acting as an integral part of the ESCB, 
defines monetary policy in conjunction with other members of the ESCB and implements it. Since, 
under Article 12.1 of the Statute, the Community’s monetary policy is exclusively formulated by the Governing Council with the result that such monetary policy will extend to Lithuania upon the 
adoption of the euro by Lithuania, the draft la w should be amended to state that Lietuvos bankas 
‘implements monetary policy’ without refere nce to the definition of monetary policy. 
12. The ECB also notes that under Article 4 of the draft law Lietuvos bankas is to promote the sound 
and efficient operation of payment and securities se ttlement systems. This provision of the draft 
law replicates Article 8(1)(8) of the existing Liet uvos bankas Act. For the sake of clarity, Lietuvos 
bankas could consider amending  this provision to expressly include clearing systems.   
13. Article 4 of the draft law provides that Lietuvos bankas is to collect from state institutions and 
economic entities the statistical information necessar y for the performance of the ESCB’s tasks and 
Lietuvos bankas’s tasks. Under Article 28 of the draft law, state and municipal institutions and 
economic entities are to provide Lietuvos bankas w ith the information required for the performance 
of its functions. Lietuvos bankas mi ght consider whether Article 4 of  the draft law should also refer 
to the municipal institutions from which statistical  information is to be collected. In addition, 
Article 28 of the draft law states that Lietuvos bankas may provide information to the ECB, the 
NCBs of the other Member States and other ins titutions, if such information is required for the 
performance of their functions, provided that Lithua nian laws do not prohibit the provision of such 
information. For the sake of clarity, the ECB suggests that Article 28 of the draft law should specify that this prohibition does not apply to the provision of statistical information to the ECB, which is subject to the confidentiality re gime laid down in Article 8 of Council 
Regulation (EC) 2533/98 of 23 November 1998 concer ning the collection of statistical information 
by the European Central Bank
4.   
14. The draft law also amends the Lietuvos bankas Ac t in relation to the powers of Lietuvos bankas’s 
Board. In particular, Article 5 of the draft law provides, among other things, that the Board shall 
approve the allocation of the profit for the financial year. The ECB understands that the rules for the allocation of profits are laid down in Article 23(3) of the Lietuvos bankas Act. Lietuvos bankas 
should consider the possibility of including a reference to Article 23(3) in the provisions in the draft law dealing with the powers of the Board.   
15. Article 6 of the draft law expressly states that the Deputy Chairpersons and the Members of the 
Board of Lietuvos bankas have the right to appeal to the Vilnius District Court against any decision 
to dismiss them prior to the expiry of their terms of office. The ECB welcomes this provision 
which reinforces the personal independence required of the members of the decision-making bodies of NCBs under Article 108 of the Treaty. This provision of the draft law must enter into force immediately, and not await the adoption of the euro in Lithuania.  
                                                     
 
4  OJ L 318, 27.11.1998, p. 8. 
4 16. Article 7 of the draft law amends the voting rul es of Lietuvos bankas’s Board. In particular, the 
draft law states that the decisions of the Board shal l be adopted with a majority of at least three 
votes. The ECB welcomes this provision, since it reinforces the principle of collegiality in the 
decision making of Lietuvos bankas.   
17. The ECB understands that Article 8(2) of the draf t law refers to Lietuvos bankas’s support of the 
participation of its staff members in cultural and sporting events organised by other central banks. 
The ECB notes that this activity is not specifically ESCB-related, and recommends that Lietuvos bankas clarifies in the draft law that it may support the participation of its staff members in cultural 
and sporting events organised by fo reign central banks or internati onal monetary institutions.    
18. Article 9 of the draft law repeals the reference to  the detailed lists of in formation which constitutes 
banking secrets and provides a more general definition of banking secrecy. In particular, the ECB notes that Article 38 of the Statute requires that  any ESCB-related information falling within the 
category of non-public informa tion should be covered by the obligation of professional secrecy. 
The reformulation of the definition of bank secrecy  in Article 9 of the draft law is therefore 
welcome.  
19. The ECB notes that the draft law materially ame nds Chapter 4 of the Lietuvos bankas Act, which 
deals with monetary policy issues. In particular, the draft law contains provisions similar to those 
of Articles 17 and 18 of the Statute. The ECB welcomes this amendment, since it reflects a fundamental change in the definition and implemen tation of monetary policy in Lithuania. As from 
the day on which Lithuania’s derogation is ab rogated, the responsibility for defining and 
implementing Lithuania’s monetary policy will be vested in the ESCB. It is suggested that the title of Article 25 of the Lietuvos bankas Act should be amended to reflect the content of this article, 
i.e.: ‘Opening of accounts and monetary policy operati ons’. In addition, the reference to monetary 
policy being defined in conjunction with other ESCB members in the proposed new wording of 
Article 25 of the Lietuvos bankas Act should be re moved, as monetary policy for the euro area is 
exclusively formulated by the Governing Council.  
20. The draft law also amends Chapter 5 of the Li etuvos bankas Act with a view to providing that 
Lietuvos bankas should manage its foreign reser ves in accordance with  the requirements of 
Community law. Under Article 105(2) of the Treat y, one of the basic tasks to be carried out 
through the ESCB is to hold and manage the offici al foreign reserves of the Member States. The 
ECB notes that the draft law does not amend Article  36 of the Lietuvos bankas Act, which states 
that Lietuvos bankas may, on its own initiative, or in accordance with an agreement with the 
Lithuanian Government, enter into settlement ag reements with foreign public and/or private 
institutions on behalf of the Lithuanian Govern ment. The draft law should more precisely reflect 
the fact that the Lithuanian Government may not influence the management of the official foreign 
reserves held by Lietuvos bankas. The management of the official foreign reserves will be carried 
5 out independently by Lietuvos bankas as an integral part of the ESCB, upon the adoption of the 
euro by Lithuania5.  
21. Article 29 of the draft law concerns sanctions fo r non-compliance with statistical obligations and 
confers on Lietuvos bankas a right to impose sanctions with respect to infringements in the field of 
statistics, in so far as non-ESCB tasks are concerne d. As certain situations  relating to the ESCB’s 
statistics may not be covered by the ECB’s sanctions regime, it is suggested that Article 29 of the 
draft law should state that Lietuvos bankas has a right to impose fines and penalties on economic entities for breaches of the requirement to submit sta tistical information to Lietuvos bankas, in so 
far as such breaches do not fall within the scope of the ECB’s sanctions regime.  
22. The ECB notes that Article 37 of the Lietuvos bank as Act provides for the prohibition on monetary 
financing without, however, referring to the releva nt provisions of Community law. The Lietuvos 
bankas Act should state that the prohibition on m onetary financing derives from Article 101 of the 
Treaty and that the definitions for the application of this prohibition are specified by the Council in 
accordance with the Treaty
6. Alternatively, Article 37 could simply be deleted since the relevant 
provisions of Community law, namely Article 101 of the Treaty and Regulation No 3603/93, are 
directly applicable in the Member States. 
23. The ECB also notes that Lithuanian law shoul d contain safeguards against interference by 
government institutions in Lietuvos bankas’s activiti es and, in particular, ESCB-related tasks. The 
ECB observes that, under the Act on the State Aud it Office, this Office is empowered to check 
whether the State’s property is being effectivel y managed. The ECB emphasises that the activities 
of the State Audit Office should not interfere with the review undertaken by the external auditor of 
Lietuvos bankas approved under the procedure which would be applicable to Lithuania upon the 
adoption of the euro by Lithuania, set out in Community law. To this end, the Lietuvos bankas Act and any other legal acts should include sufficien t safeguards concerning the review of Lietuvos 
bankas’s activities to ensure the independence of Lietuvos bankas
7.  
                                                      
5  See ECB Opinion CON/2002/18 of 9 July 2002 at the request of the Belgian Ministry of Finance on a draft for a new 
Article 879 of the Companies Code, introduced by the Progra mme Law, as well as severa l articles interpreting and 
amending the Organic Law of the Nationale Bank van België/Ban que Nationale de Belgique, introduced by paragraphs 6 
to 10 of Article 141 of the draft law on the prudential superv ision of the financial sector  and financial services.  
6  Cf. Article 103(2) of the Treaty and Council Regulation No 3603/93 of 13 December 1993 specifying definitions for the 
application of the prohibitions referred to in Articles 104 and 104b (1) of the Treaty (OJ L 332, 31.12.1993, p. 1). 
7  Cf. ECB Opinion CON/2002/22 of 2 September 2002 at the re quest of the Swedish Ministry of Finance on a draft 
legislative proposal establishing the National Audit, including proposed amen dments to the Sveriges Riksbank Act 
(1988:1385). 
6 24. This opinion will be published on the ECB’s website. 
  Done at Frankfurt am Main, 30 December 2005. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET