EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 19 September 2006 
at the request of the Slovenian Ministry of Finance 
on certain provisions of a draft law on banking  
(CON/2006/48) 
 
Introduction and legal basis  
On 23 August 2006 the European Central Bank (ECB) r eceived a request from the Slovenian Ministry of 
Finance for an opinion on certain provisions of a dr aft law on banking (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 sixth 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 provisions in question relate to  rules applicable to financial 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 Pr ocedure of the European Central Bank, the Governing 
Council has adopted this opinion. 
 1. Purpose of the draft law 
1.1 The main objective of the draft law is to comprehensively regulate the banking sector and transpose 
relevant Community directives into Slovenian la w, in particular 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 (recast) (hereinafter the ‘Recast Banking Directive’)
2 and Directive 
2006/49/EC of the European Parliament and of the Council of 14 June 2006 on the capital 
adequacy of investment firms and credit institutions (recast)3. 
1.2 The ECB has only considered those provisions of th e draft law that are covered by the scope of the 
consultation request received from the Slovenian Ministry of Finance and has in general not 
assessed the other provisions. The consultation request  only applies to those provisions of the draft 
law that: (i) do not implement Community directives;  (ii) are new in substance compared to the 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  OJ L 177, 30.6.2006, p. 1. 
3  OJ L 177, 30.6.2006, p. 201. 
2 current Law on banking4; and (iii) potentially influence the stability of financial institutions and 
markets. These provisions are contained in various  parts of the draft law and cover the following: 
definitions of relevant terms, the corporate structure of banks, the provision of banking and 
financial services, risk management and intern al audit, business books and annual reports, the 
supervision of banks, guaranteed deposits and e-money institutions. 
 2. General observations  
The ECB welcomes this general revision of the ex isting Slovenian Law on banking, which is the main 
law regulating the banking sector in Slovenia. The draft law is expected to achieve its main objective of 
ensuring consistent implementa tion of financial Community directives in national law. 
 3. Definition of credit institutions 
3.1 In Article 13(3) of the draft law, the term ‘cred it institution’ is used as a generic term for banks and 
companies issuing e-money. The ECB notes that savings banks are not included in the category of credit institutions. A savings bank is defined in Artic le 13(5) of the draft law as a legal person with 
its seat in the Republic of Slovenia performing banking services
5 on the basis of Banka Slovenije’s 
authorisation and which is subject to the same rul es that apply to banks, unless stated otherwise in 
Chapter 11 of the draft law6. 
3.2 Under Article 4 of the Recast Banking Directive, the term ‘credit institution’ comprises, in addition 
to e-money institutions, undertakings whose business is  to receive deposits or other repayable funds 
from the public and to grant credits for its own acc ount. In order to bring the draft law into line 
with the Recast Banking Directive, the ECB w ould recommend that the consulting authority 
includes savings banks under the definition of credit institutions. 
 4. Bank management system 
4.1 Pursuant to Article 60 of the draft law, a ba nk may choose either a two-tier bank management 
system with a management board and a supervis ory board, or a one-tier bank management system 
with a board of directors. In the latter case, cer tain provisions referring to the management board 
will also apply mutatis mutandis  to the executive directors, including Article 62 of the draft law 
                                                 
4  Official Gazette of the Republic of Sloveni a, No 104/2004 – official consolidated version. 
5  Under Article 7 of the draft law, the banking services are receiving deposits from the public  and granting credits for own 
account. 
6  Pursuant to the specific rules in Chap ter 11 of the draft law, savings banks: 
− may have a lower initial capital than banks (EUR 1 million instead of EUR 5 million);  
− are prohibited from providing pension fund management se rvices in accord ance with the law governing pension 
and disability insurance as defined in poi nt 3 of Article 11(1) of the draft law; 
− may only perform foreign exchange transactions with pr ior Banka Slovenije authorisation for such transactions; 
− may contractually transfer internal audit tasks to a pe rson not employed by the savi ngs bank but fulfilling the 
conditions for carrying out such tasks. 
3 laying down the membership requirements of banks’ management boards. Article 62(3) of the draft 
law states that at least one member of the management board must have a perfect command of the Slovenian language and that at least one member of the management board must have ‘their centre 
of vital interests in the Republic of Slovenia’.  
4.2 These two requirements may constitute a breach of th e principle of free movement of workers, as 
they limit the access of citizens of other Member  States to membership of Slovenian banks’ 
management boards. According to Community la w, such requirements could be justified as 
(i) exceptions permissible under Article 39 of the Treaty
7; or (ii) exceptions concerning ‘general 
interest objectives’8. Unless the two requirements in Article 62(3) of the draft law can be so 
justified, the ECB would recommend abolishing them. 
4.3 As regards the language requirement  in Article 62(3) of the draft law, the ECB recognises the right 
to impose such a requirement in certain circumstances9; however, the level of linguistic knowledge 
must be proportionate to the objective to be achieved and should not result in discrimination 
against citizens of other Member States10. Therefore, if the language requirement is to be retained, 
the phrase ‘perfect command of the Slovenian language’ should at least be replaced by different wording, which can perhaps refer to a ‘sa tisfactory command of the Slovenian language 
commensurate with performing the duties of a memb er of the bank’s management board’, since 
this would be more in line with Community law.  Moreover, it is recommended that the language 
requirement is waived if it is not necessary for prudential supervision reasons. 
                                                 
7  Such exceptions must be justified on grounds of public policy, public security or public hea lth; in addition, employment 
in the public service is ex empt from the free moveme nt of workers provisions.  
8  This concept has its origins in the Cour t of Justice’s judgment in Case 120/78 Rewe-Zentral  AG v 
Bundesmonopolverwaltung für Branntwein  [1979] ECR 649 (‘ Cassis de Dijon ’), in particular paragraph 8. National 
measures which are liable to hinder or make less attractiv e the exercise of fundamental freedoms guaranteed by the 
Treaty must fulfil four conditions: they must be applied in  a non-discriminatory manner; they must be justified by 
imperative requirements in the general interest; they must be suitable for securing the attainment of the objective which 
they pursue; and they must not go beyond what is necessary in order to attain it (see, for example, paragraph 37 of the 
Court of Justice’s judgment in Case C-55/94 Reinhard Gebhard v Consiglio dell'Ordine degli Avvocati e Procuratori di 
Milano  [1995] ECR I-4165).  
9  Article 3 of Regulation (EEC) No 1612/68 of the Council of  15 October 1968 on freedom of movement for workers 
within the Community allows conditions re lating to ‘linguistic knowledge required by  reason of the nature of the post to 
be filled’.  
10  In Case C-379/87 Anita Groener v Minister for Education and the City of Dublin Vocational Educational Committee  
[1989] ECR 3967, the Court of Justice held at paragra ph 19 that although there was no Treaty ban on a policy for the 
protection and promotion of a language of a Member State which is both the national language and the first official 
language, such a policy must not in any circumstances be disp roportionate to the aim pursued and the manner in which it 
is applied must not bring about discriminatio n against nationals of other Member States. 
 
4  
5. References to the European Commission 
The ECB would like to make the following editorial comment. Article 22(2) of the draft law states that 
the term ‘EU Commission’ means the Commission of the European Communities. The ECB would 
recommend simply referring to the ‘Commission’, which is more accurate (as it is an institution of the European Communities and not the EU) and is also an established term in Community legislation.  
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 19 September 2006. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET