EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 27 May 2009 
on strengthening Banca Na ţională a României’s remedial powers 
in relation to credit institutions in distress 
(CON/2009/48) 
 
Introduction and legal basis  
On 19 May 2009 the European Central Bank (ECB) received a request from Banca Na ţională a României 
(BNR) for an opinion on a draft law approving Gove rnment Emergency Ordinance No 25/2009 amending 
Government Emergency Ordinance No 99/2006 on cred it institutions and capital adequacy (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 an d the sixth 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 regarding draft 
legislative provisions1, as the draft law relates to BNR and to rules applicable to financial institutions 
insofar as they materially influence the stability of fi nancial institutions and markets. In accordance with 
the first sentence of Article 17.5 of the Rules of Pr ocedure of the European Central Bank, the Governing 
Council has adopted this opinion. 
 1.  Purpose of the draft law 
1.1 The draft law aims to strengthen BNR’s reme dial powers by expressly allowing it, after assessing 
the financial condition of a credit institution in di stress, to request significant shareholders to 
financially support the credit institution, and/or to prohibit or limit profit distributions by the credit 
institution until its financial condition has been r estored. Under the draft law, BNR is empowered: 
(a)  to require significant shareholders of a cr edit institution in distress to provide necessary 
financial support to it either: (i) by incr easing its share capital; or (ii) by providing 
subordinated loans that can be converted into or dinary share capital, al so at BNR’s request;  
(b)  to prohibit or limit distribution of profit s until the credit institution’s financial condition has 
been restored; and 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2 (c)  to decide that voting rights for shareholders  who do not comply with the request to provide 
additional financial support to the cr edit institution will be suspended. 
1.2 Under the Romanian constitutional procedure, the draft law is adopted for the purpose of approving 
Government Emergency Ordinance No 25/20 09 (GEO No 25/2009), which amended and 
supplemented Government Emergency Ordinance No  99/2006 on credit institutions and capital 
adequacy (GEO No 99/2006). GEO No 99/2006 is the main piece of legislation regulating the 
activity of credit institutions and financial inv estment companies in Romania, as well as their 
prudential supervision and the supe rvision of payment systems and settlement systems for financial 
instruments. The draft law forms part of the le gislative measures to be adopted by Romania, as 
agreed during recent negotiations between the Ro manian Government, on the one hand, and the 
International Monetary Fund, the World Bank and the European Union, on the other. 
 2. General observations  2.1 The ECB has issued a number of opinions at the request of the competent authorities of the 
Member States on national measures adopted in  response to the global financial crisis
2. The ECB 
invites the Romanian authorities to  take into account the relevant observations made in its recent 
opinions on similar draft legislative provisions in other Member States. 
2.2 The ECB also draws attention to the guidan ce provided by the Ecofin Council to the Member 
States in the conclusions of its Meeting of 7 October 20083, as well as the Declaration issued by the 
Heads of State of the euro area on 12 Oc tober 2008 (hereinafter the ‘Declaration’)4. In particular, 
the ECB emphasises that any initiatives put in place by  the competent national authorities to restore 
confidence in the financial markets should be coordinated and should aim to implement the 
common principles in question, in a spirit of clo se cooperation with other Member States and the 
Community institutions5. The principles contained in the Declaration, as well as the conclusions 
raised by the Ecofin Council, were endorsed by the European Council of 15 and 16 October 20086. 
Moreover, measures taken by competent national aut horities in relation to financial institutions in 
the context of the current global financial crisis ha ve been the object of further coordination at EU 
                                                 
2  All ECB opinions are available on th e ECB’s website at www.ecb.europa.eu. 
3  See ‘Immediate Responses to Financial Turmoil’, Ecofin Council Conclusions of 7 October 2008, available on the former 
French Presidency’s website at www. ue2008.fr. The Ecofin Council recommended that: (i) interventions should be 
timely and the support should in pr inciple be temporary; (ii) the interests of taxpayers should be protected; (iii) existing 
shareholders should bear the due conseque nces of the intervention; (iv) the Gove rnment should be in a position to bring 
about a change of management; (v) management should not retain undue be nefits; (vi) governments may have, inter alia , 
the power to intervene in remuneration; (vii) legitimate intere sts of competitors must be protected, in particular through 
the State aid rules; and (viii) negative spill-over effects should be avoided.  
4  The text of the Declaration is available on the former Fren ch Presidency’s website at www. ue2008.fr. The Member States 
agreed to: (i) ensure appropriate liquid ity conditions for financial institutions; (ii) facilitate the funding of banks; 
(iii) provide financial institutions with additional capital resources to continue to ensure the proper financing of the 
economy; (iv) allow for an efficient recapitalisation of distressed banks; (v) ensure su fficient flexib ility in the 
implementation of accounting rules; and (vi) enhance cooperation procedures am ong European countries. 
5  See ECB Opinion CON/2009/12. 
6   See the Presidency Conclusions of Brussels Euro pean Council of 15 to 16 October 2008, paragraph 3. 
3 level7. In particular, the ECB wishes to draw the c onsulting authority’s attention to the European 
Council Declaration that Member States’ actions ‘w ill be designed in order to avoid any distortion 
in the level playing field’, which is a crucial el ement for the integration of European financial 
markets. As a general remark in this contex t, the ECB, in line with its previous opinions8, notes the 
importance of putting a transparent and predictabl e framework in place by defining the terms and 
conditions for financial instituti ons to have recourse to it. 
2.3 The ECB was not consulted on GEO No 25/2009. Although there is no requirement to consult the 
ECB on the transposition of Community directives in to national law, provided that the transposing 
provisions have no impact on matters falling within  the ECB’s fields of competence other than the 
transposition of the directives, the ECB has on a limited number of occasions encouraged national 
authorities to consult it on draft legislative provisions transposing Community directives of particular interest to the European System of Central Banks. 
2.4 With these general observations in mind, and against the background of the guidance previously 
given in its opinions and by the EU institutions and other institutions in this regard, the ECB has 
the following specific observations on the draft law. 
 3. Specific observations  Extension of regulatory and supervisory powers of BNR 
3.1 The ECB understands that the draft law will co mplete the current Roma nian legal framework 
concerning credit institutions and will allow BN R to take timely action to prevent a credit 
institution’s financial condition fro m deteriorating and so contribu ting to financial stability. The 
relevant provisions of the draft law will accord ingly enforce BNR’s obligation to prevent the 
capital of a credit institution from falling below the required threshold and will introduce a private 
sector resolution option as the first choice for dea ling with a credit institution in distress, before 
other measures such as State aid are considered necessary. 
3.2 While the ECB appreciates that the draft law re cognises BNR’s expertise in this context, the ECB 
restates its view that the functions to be perform ed by BNR to aid the stabilisation measures to be 
carried out must be conducted in a manner that is fully compatible with  BNR’s institutional and 
financial independence and that safeguards the pr oper performance of its existing tasks under the 
                                                 
7  Communication from the Commission — The application of State aid rules to meas ures taken in relation to financial 
institutions in the context of the current global financia l crisis (OJ C 270, 25.10.2008, p. 8); Communication from the 
Commission — The recapitalisation of fina ncial institutions in the current financial crisis: limitation of aid to the 
minimum necessary and safeguards ag ainst undue distortions of compe tition (OJ C 10, 15.1.2009, p. 2);  
Recommendations of the Governing Council of the European Central Bank on government gua rantees for bank debt and 
Recommendations of the Governing Council of the European Ce ntral Bank on the pricing of recapitalisations, both latter 
documents available on the ECB’s website at www.ecb.europa.eu.  
8  See paragraph 3.1.2 of ECB Opinion CON/2009/18. 
4 Treaty and the Statute of the Eu ropean System of Central Banks and of the European Central 
Bank9.  
According to the explanatory memorandum to the draft law, a key objective of the amendments 
will be to strengthen BNR’s remedial powers with  new provisions as stated in paragraph 1.1, 
above. In this context and in line with its previous opinions10, the ECB reminds the Romanian 
authorities that the functions performed by BNR must fully comply with the provisions of Article 101 of the Treaty and of Council Regul ation (EC) No 3603/93 of 13 December 1993 
specifying definitions for the application of th e prohibitions referred to in Article 101 of the 
Treaty
11.  
3.3 As regards the extension of BNR’s regulatory  and supervisory powers, the ECB notes the changes 
to the Romanian legislative framework for financ ial institutions and underlines that ‘Member States 
may not put their national central banks in a position where they have insufficient financial resources to carry out their ESCB or Eurosystem-related tasks, as applicable’
12. Moreover, the ECB 
expects that when BNR’s tasks are extended, care will be taken to ensure that it has sufficient 
financial and personnel resources both in terms of quantity and quality to carry out all its tasks, 
and, in particular, that its capacity to carry out ESCB-related tasks will not be affected13. 
Measures concerning the share capital of cred it institutions and shareholders’ voting rights 
3.4. As already noted in paragraph 1.1 above, th e draft law gives BNR certain additional remedial 
supervisory powers, in particular to require signifi cant shareholders to sustain a credit institution in 
distress by increasing its share capital or by providing it with loans that are eligible to be included 
in its own funds14. Pursuant to Article 230(3) of GEO No 99/2006, as inserted by Article I, point 3, 
of the draft law, BNR may decide to suspend the ex ercise of shareholders’ vo ting rights if they fail 
to comply with the abovementioned measures. Fi nally, Article 230(3) of GEO No 99/2006 also 
provides for the applicability of Article 230(2) ther eof, which refers, in turn, to Article 232. As 
stated in the explanatory memorandum to the draf t law and pursuant to the latter provisions, those 
shareholders who fail to comply with a request to  provide additional financial support to the credit 
institution, and whose voting rights have therefor e been suspended, will not be allowed to purchase 
new shares in that credit institution and will be re quired to sell their participation within three 
months. In case of failure to comply, BNR will or der the credit institution to cancel the shares 
involved and to issue and sell new shares bearing the same number. The money raised from the sale 
will be made available to the original shareholde r, after deduction of costs related to the sale. 
                                                 
9  See paragraph 3.7 of ECB Opinion CON/2008/68. 
10  See, e.g., paragraph 3. 2 of ECB Opinion CON/2008/52. 
11  OJ L 332, 31.12.1993, p. 1. 
12  See e.g. the ECB’s Convergence Report 2007 , p. 19, available on www.ecb.europa.eu. 
13  See paragraph 3.2 of ECB Opinion CON/2007/17. 
14 See Article 227(2) of GEO No 99/2006, as insert ed by Article I, point 2, of the draft law. 
5 3.5 The ECB expects that the above provisions will comply with all applicable domestic company, 
civil, property and constitutional laws and also international public and human rights law. The ECB 
also expects that the provisions will be implem ented in compliance with the Community company 
law framework15. The abovementioned measures should also  be proportionate to the situation 
addressed. In all cases, suspension of the exer cise of voting rights, compulsory sale and 
compulsory cancellation of shares, which are sev ere measures with far-reaching effects on market 
participants, should remain a tool of last re sort for use in clearly defined and emergency 
circumstances only, when less severe measures would be inadequate16. 
3.6 To improve legal certainty, which is especially im portant in such situations, the ECB considers that 
BNR’s new powers should be further defined and clarified, specifying the actual conditions under 
which each power will be used objectively and transp arently. In this context, the ECB would like to 
point out that the conditions triggering the app lication of BNR’s new powers are not yet clearly 
defined, since the draft law only states that the re levant measures can be adopted ‘if a depreciating 
trend in relation to prudential a nd financial performance indicators is detected’. The ECB also 
notes that BNR’s power to suspend shareholders ’ voting rights and to order the sale and the 
cancellation of their shares if the shareholders fail to comply with a request to sustain the credit 
institution financially by increasing its share capital,  provide loans or prohibit and restrict profit 
distributions, appears not to be subject to cl ear and predictable lim its and conditions. To 
summarise, therefore, the ECB stresses that th e draft law, or the necessary implementing 
provisions, should specifically provide for the act ual conditions under which the new measures will 
be used. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 27 May 2009. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
15  See, in particular, the Second Council Directive 77/91/EEC of 13 December 1976 on coordination of safeguards which, 
for the protection of the interests of members and others, are required by Member States of companies within the 
meaning of the second paragraph of Article 58 of the Treaty , in respect of the formation of public limited liability 
companies and the maintenance and altera tion of their capital, with a view to making such safe guards equivalent 
(OJ L 26, 31.1.1977, p. 1). 
16  See, by analogy, paragraph 3.2.2 of ECB Opini on CON/2009/24, referring to expropriation measures.