EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 18 April 2011 
on strengthening the governance of De Nederla ndsche Bank and the Authority for the Financial 
Markets 
(CON/2011/37) 
 
Introduction and legal basis  
On 28 February 2011, the European Central Bank (E CB) received a request from the Dutch Minister for 
Finance for an opinion on the draft law on strengt hening the governance of De Nederlandsche Bank and 
the Authority for the Financial Market s (hereinafter the ‘draft law’). 
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 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 De Nederla ndsche Bank (DNB). In accordance with the 
first sentence of Article 17.5 of the Rules of Pro cedure of the European Central Bank, the Governing 
Council has adopted this opinion. 
 1.  Purpose of the draft law 
The draft law will amend the 1998 Law on the Bank and th e Law on financial supervision with a view to 
strengthening the governance of the financial markets supervisory authorities, i.e. DNB and the Authority 
for the Financial Markets (hereinafter collectiv ely referred to as the ‘supervisory authorities’). 
The main issues addressed by the draft law are: (a) the expansion of the tasks of the supervisory boards of 
the supervisory authorities; (b) the limitation on th e number of reappointments of the Governing Board 
members of the supervisory authorities; (c) the intro duction of general profiles, job profiles and fit and 
proper tests. 
The draft law aims to enhance DNB’s governance by fu rther improving internal ‘checks and balances’ to 
ensure sufficient safeguards within DNB to allow for conscientious decision-making. For this reason, the 
draft law amends the 1998 Law on the Bank and the La w on financial supervision, in a way which takes 
account of DNB’s independence, based on the requirements of the Treaty and the Statute of the European System of Central Banks and of the European Cent ral Bank (hereinafter the ‘Statute of the ESCB’). 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2 2. Amendments under the draft law 
2.1 The role of DNB’s Supervisory Board   
2.1.1 The ECB considers the provisions relating to th e enhanced role of DNB’s Supervisory Board to be 
positive and in line with governance -related developments in genera l. The provisions ensure that 
the relevant requirements follow current governance standards. 
2.1.2 One of the Supervisory Board’s new tasks is to draw up Governing Board profiles. There are two 
kinds of profiles. The first is a general profile or  profile sketch to be drawn up under Article 1:27a 
(4) of the Law on financial supervision, which re quires the Minister’s approval. This profile will 
rely, to the extent deemed appropriate, on the general fit and proper criteria used for financial 
entities. The Supervisory Board will further refine  these criteria, but will not go into detail as 
regards specific functions within the Governi ng Board. The second profile is the job profile 
referred to in Article 12(3) of the draft law. Th is profile will be based on the general profile and 
specify the suitability requirements and nature of  the activities to be carried out for a specific 
function within the Governing Board. In this regard, the draft law’s explanatory memorandum 
states that the job profile may set out the particul ar expertise, experience and skills needed for the 
relevant function2. In drawing up such profiles, care should be taken to ensure that the job profiles 
establish objective and clearly defined criteria rela ted to the performance of duties in order to 
guarantee a level playing field for all qualified candidates.  
2.1.3 It is also important that any profiles to be  drawn up will only apply to future Governing Board 
members, and not to current ones. 
2.1.4 The ECB understands that in supervising DNB’s  general affairs, the Supervisory Board will not 
interfere with policy implementation, i.e. d ecisions on individual cases. The ECB understands from 
the draft law’s explanatory memorandum3 that DNB’s monetary policy and payment transactions, 
in implementation of its centra l bank tasks regulated under Article  3 of the 1998 Law on the Bank, 
fall outside the scope of the Supervisory Board’ s internal supervision. Consequently, such 
supervision will not interfere with the perfo rmance of Eurosystem-related tasks. Indeed, 
supervision should never interfere with the perfo rmance of any Eurosystem-related tasks provided 
for by the Treaty. 
2.1.5 Furthermore, Article C of the draft law, wh ich amends Article 13 of the 1998 Law on the Bank, 
requires the Supervisory Board to perform its inte rnal supervision role with due regard to the 
provisions of the Treaty and the Statute of the ES CB. Hence, this provision covers the requirement 
for Eurosystem-related tasks to be performed i ndependently. In this respect, the ECB also notes 
that the Supervisory Board is bound by the confid entiality clause of Article 20 of the 1998 Law on 
the Bank, so that confidentiality is guaranteed.  
                                                 
2  See the draft law’s explanatory memorandum, p. 8. 
3  See the draft law’s explanatory memorandum, p. 11. 
3 2.2  DNB’s Governing Board   
2.2.1 Article 12(4) of the 1998 Law on the Bank a ddresses the dismissal of DNB’s President and 
Executive Directors who are all members of DNB’ s Governing Board. The ECB understands that 
job profiles are relevant for the appointments and potential re-appointments of board members. 
Article 12(4) of the draft law now provides for th e grounds of dismissal of the President and the 
Executive Directors in accordance with Article 14. 2 of the Statute of the ESCB. While the ECB 
reiterates its support for objective profiles, any cha nges to a profile on the basis of which a member 
of the Governing Board was appointed would not qualify as a legally valid justification for the 
dismissal of that Governing Board member insofar as she/he does not comply with the terms of an 
amended profile. Hence, the ECB welcomes the fact th at this is expressly stated in the draft law’s 
explanatory memorandum. 
2.2.2 Finally, the ECB notes that Article 12(4) provides for both the possibility of removal from office 
and suspension of DNB’s President and Executive Dir ectors. In this respect, the wording of Article 
12(4) is different to the wording of Article 14.2 of the Statute of the ESCB and equivalent 
provisions in the statutes of other national central banks. The ECB understands that the grounds for the suspension of DNB’s President and Executive Dir ectors are the same as those for their removal, 
and these are in line with Article 14.2 of the St atute of the ESCB. Consequently, to avoid any 
misunderstanding, the ECB advises the consulting aut hority to use this opportunity to fully align 
the wording of Article 12(4)  with that of Article 14.2 of the Statute of the ESCB. 
2.2.3 The ECB understands that the allocation of tasks among one or more Governing Board members as 
proposed under Article 12a(1) of the draft law aims to make DNB more efficient. The ECB expects to be consulted with respect to the implementati on of Article 12a(1) pursuant to DNB’s Articles of 
Association. It is important that the allocation of tasks among the members of the Governing Board 
must not result in a situation where decisions aff ecting the financial resources of the central bank 
necessary for the performance of Eu rosystem-related tasks will be taken independently from the 
control of the Governing Board as a collective decision-making body.   
 3. Amendments to the Law on financial supervision  3.1 Sound governance of supervision 
It is important that the provisions  set out in Article 1:25b of the proposed amendment to the Law on 
financial supervision are implem ented while fully taking into account the internationally agreed 
principles of operational independence a nd sound governance of supervision. 
3.2 Budget approval  
3.2.1 Article II(E) of the draft law adds new para graph 5 into Article 1:30 of the Law on financial 
supervision under which the Minister for Fina nce may withhold budget approval if the budget is 
contrary to law or public interest. The ECB unders tands that the budget within the framework of the 
4 Law on financial supervision only concerns the supervisory tasks of the supervisory authorities4. 
However, the concepts ‘contrary to  law’ and ‘public interest’ are very broad and might indirectly 
also impact DNB’s financial inde pendence as regards its Eurosystem -related tasks. To safeguard 
DNB’s financial independence, the law should provide a safeguard clause so that the power of the 
Minister for Finance to withhold the approval of the budget and to set further criteria for the exercise of such powers is without prejudice to the financial means necessary for carrying out DNB’s Eurosystem-related tasks
5.  
It is important that the provisions set out in Ar ticle 1:30(5) of the propo sed amendment to the Law 
on financial supervision are implem ented while fully taking into account the internationally agreed 
principles of operational independence a nd sound governance of supervision. 
3.2.2 In addition, the draft law’s explanatory memorandum6 only refers to international principles which 
require that supervisors always have sufficient m eans to carry out their supervisory tasks. The ECB 
would like to see explicitly stated that in furthe r elaborating the criteria referred to in the first 
sentence of Article 1:30(5), the Minister will, in pa rticular, take into account the fact that DNB will 
always need to have sufficient means to carry out its tasks. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 18 April 2011. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
                                                 
4  See Article 1:30 (1) of the Law on financial supervision. 
5  ECB’s Convergence Report May 2010, p. 22. 
6  See the draft law's explanatory memorandum.