EN ECB -PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 27 November 2017 
on amendments to the decision making framework of Българска народна банка  
(Bulgarian National Bank)  
(CON/20 17/51 ) 
 
Introduction and legal basis  
On 22 November 2017 the European Central Bank (ECB) received a request from  the National Assembly 
of the Republic of Bulgaria for an opinion on a draft law amending the Law on credit institutions  
(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/EC1, as 
the draft law relates to Българска народна банк а (Bulgarian National Bank (BNB) ). 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.  
 
1. Current decision- making framework  of Българска народна банка ( Bulgarian National 
Bank ) 
1.1. In accordance with the Law on Bulgarian National Bank (hereinafter the ‘Law on BNB’)2 the 
decision- making bodies of BNB are the Governing Council, the Governor and the three Deputy 
Governors heading the Issue Department, the Banking Department and the Banking Supervision 
Department3. The BNB Governing Council comprises seven members –  the Governor and the 
three Deputy Governors wh o are appointed by the National Assembly and three other members  
appointed by the President of the Republic4.  
1.2. The term of office of the members of the BNB Governing Council is six years5. A member of the 
BNB Governing Council may be relieved from office by the appointing authority only if he no longer 
fulfils the conditions required for the performanc e of his duties, if he is practical ly unable to perform 
his duties for more than six months, or if he has been guilty of serious misconduct6. When 
exercising their competences  and carrying out their duties under the Law on BNB, the Governor 
                                                 
1  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions ( OJ L 189, 3.7.1998, p. 42) . 
2  Published in Darjaven Vestnik No 46, 10 June 1997.  
3  See Article 10(1) of the Law on BNB.  
4  See Article 11(1) and Article 12(1) to (3) of the Law on BNB.  
5  See Article 12(4) of the Law on BNB.  
6  See Article 14(1) of the Law on BNB.  
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2 and the members of the BNB Governing Council must  be independent and neither BNB, nor the 
Governor, nor the members of the BNB Governing Council shall seek or take any instructions from 
the Council of Ministers or from any other bodies and institutions7. 
1.3. The competences of the BNB Governing Council cover  a broad range of matters , including powers 
to adopt legislative acts concerning BNB’s activit ies, to set rules and requirements regulating bank 
activities and to grant, refuse to grant, and withdraw licenses of banks, payment system operators, 
payment institutions and electronic money institutions under terms and procedures provided for by 
law8. 
1.4. The BNB Governor organi ses, directs and supervises the activities of the B NB, other than those 
delegated by law exclusively to the Deputy Governors9. The Deputy Governors organi se, direct 
and are responsible for the activities of the departments which they head, acting within the 
competencies vested in them by law or by a regulation adopted by the BNB Governing Council10. 
In particular , the Deputy Governor heading the Banking Supervision Department exercises 
supervision over the banking system in accordance with the rules provided for by law and the 
regulations  thereunder11, while the Deputy Governor heading the B anking Department exercises 
supervision over payment system operators, payment institutions and electronic money institutions 
in accordance with the rules provided for by law and the regulations  thereunder12. In exercising 
these supervisory competences  the Deputy Governors apply, separately and at their  own 
discretion, the respective measures, enforcement actions and sanctions  as provided by law13. 
 
2. Purpose of the draft law  
2.1. The draft law amends multiple provisions in the Law on credit institutions14 as well as other laws 
(the Law on BNB15, the Law on the recovery and resolution of credit institutions and investment 
firms16, the Law on consumer credit related to immovable property17, and the Law on p ayment 
services and payment systems18) which relate to BNB’s decision -making framework. The proposed 
amendments aim t o expand the existing decision- making competences of the BNB Governing 
Council by assigning to it some of the decision- making competences  which, under currently 
applicable legislation19, are exercised autonomously by either the Deputy Governor heading the 
                                                 
7  See Article 44 of the Law on BNB.  
8  See Article 16(1) of the Law on BN B. 
9  See Article 18(1) of the Law on BNB.  
10  See Article 19(3) of the Law on BNB.  
11  See Article 20(3) of the Law on BNB.  
12  See Article 20(4) of the Law on BNB.  
13  See Article 20(3) and (4) of the Law on BNB  
14  Published in Darjaven Vestnik No 59, 21 July 2006.  
15  Published in Darjaven Vestnik No 46, 10 June 1997.  
16  Published in Darjaven Vestnik No 62, 14 August 2015.  
17  Published in Darjaven Vestnik No 59, 29 July 2016.  
18  Published in Darjaven Vestnik No 23, 27 March 2009.  
19  For example,  under the currently applicable Law on credit institutions,  these competences relate to the adoption of 
supervisory measures, such as the imposition of requirements in respect of capital, risk, bank policies and 
operations, the prohibition of certain activities and transactions, including in relation to certain persons, the 
appointment of conservators in all cases envisaged by law,  and the imposition of specific liquidity requirements. 
Under the currently applicable Law on payment services and payment systems,  these competences relate for 
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3 Banking Supervision Department or the Deputy Governor heading the Banking Department20. 
2.2. The consulting authority explains that the draft law aims to improve the supervisory process, to 
protect financial services consumers and to minimi se the risks for the financial system as a whole.  
2.3. The consulting authority highlights several provisions of the draft law which aim to guarantee the 
autonomy and independence of the supervisory function from other BNB functions. Pursuant to the 
draft law , the decisions for which competence is transferred to the BNB Governing Council may 
only be adopted upon a proposal from the respective Deputy Governor. Moreover the draft 
amendments to the Law on BNB provide  that the Deputy Governors must  exercise their 
supervisory powers separately and independently from other BNB functions21. 
 
3. General  observations  
3.1. The ECB welcomes the intra- institutional transfer of decision- making authority from the Deputy 
Governor heading the Banking Supervision Department and the Deputy Governor heading the 
Banking Department to the BNB Governing Council.  In this regard, the ECB would like to make 
three general points.  
3.2. Firstly , the simplification of the current, somewhat complex , governance structure of the BNB,  
consisting of several independent decision- making bodies located within the legal personality of the 
BNB,  enhances the BNB’s institutional integrity . Crucially, this simplification  addresses potential 
legal risks for BNB arising from the fact that BNB as a whole could be held accountable and liable 
for acts performed by its constituent parts, which are outside the control of the BNB’s supreme 
decision- making body (the BNB Governing Council)22. 
3.3. Secondly , BNB’s new decision -making framework reinforces the role of the BNB Governing Council 
which becomes the sole decision -making body competent to issue binding acts in different policy 
areas23 on behalf of  BNB. This  change  also supports  the institutional dimension of BNB’s 
independence,  since under the draft law BNB will only be bound by supervisory acts and other acts 
addressed to third parties that were  agreed by the BNB Governing Council , and not by a Deputy 
Governor in the exercise of his/her independent  competences as attributed by the relevant national 
laws.  
3.4. Thirdly , it has been widespread practice throughout the Union for decision- making bodies to act 
with collegiality as regards supervisory matters24. Therefore, the introduction of a collegiate 
decision- making process in key supervisory areas in relation to financial market participants 
operating in Bulgaria is l ikely to strengthen the quality of BNB internal deliberations with respect to 
                                                                                                                                                             
example to the adoption of supervisory measures applicable to payment institutions, other suppliers of payment 
services, payment systems and electronic money institutions, the power to enter or r efuse to enter , or delete the 
entry of , credit intermediaries in or from the register kept by the BNB. Other competences include the power to adopt 
early intervention measures in respect of credit institutions, as well as the powers to grant various permissions, 
approvals and consents.  
20  In some cases these decisions may also be adopted by an official authorised by the respective Deputy Governor.  
21  These comprise amendments to Article 20(3) and (4) of the Law on BNB.  
22  See paragraph 6 of Opinion CON/2002/16 . All ECB opinions are published on the ECB’s website at 
www.ecb.europa.eu.  
23  Notably  the supervision of credit institutions and the supervision of payment systems and payment services.  
24  See paragraph 14 of Opinion CON/2005/34, paragraph 3.2.3 of Opinion CON/2006/15 and paragraph 3.5 of Opinion 
CON/2010/94.  
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4 the exercise of its supervisory tasks . To ensure that BNB monetary and supervisory policy 
functions are effectively separated, while at the same time allowing the new overall decision -
making structure to benefit from synergies25, it could be considered that t he BNB Governing 
Council adopts the draft acts proposed by the respective Deputy Governor following a decision-
making procedure based on non- objection (see e.g. the non -objection procedure applicable to the 
ECB with regard to the ECB’s prudential  supervisory tasks26). 
 
4. Specific observations  
4.1 The attribution of new competences to the BNB Governing Council may present a challenge to the 
effectiveness and efficiency of BNB's decision -making process, given the potentially high number 
of individual supervisory decisions that would need to be taken. Whilst preserving the collegiate 
nature of the decision- making process, the legislator  may wish to consider including  an appropriate 
mechanism27 in the draft law to ensure the operational efficiency of BNB ’s decision- making process 
in relation to the adoption of routine executive supervisory decisions. Since the principle of good 
administration requires that units of public administration carry out their tasks with a duty of care, it 
is also important that the BNB Governing Council in the exercise of these new responsibilities  is 
supported by adequate fi nancial and human resources.  
4.2 The ECB would also recommend that the draft law provides for a transitional period (of at least one 
year)  that would allow BNB to develop  the appropriate institutional capacities necessary to ensure 
that BNB’s supervisory funct ion is able to smoothly incorporate the new decision -making 
framework.  
 
This opinion will be published on the ECB’s website.  
 
Done at  Frankfurt am Main, 27 November 2017.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI  
                                                 
25  See paragraph 1.8 of Opinion CON/2012/96.  
26  See Article 26(8) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the 
European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 
29.10.2013, p. 63).   See also Article 13g of the Decision ECB/2004/2 of the European Central Bank of 19 February 
2004 adopting the Rules of Procedure of the European Central Bank (OJ L 80, 18.3.2004, p. 33) . 
27  For example,  an enabling clause allowing for the delegation of limited and clearly defined executive powers, the 
exercise of which is subject to strict review in the light of objective criteria established by the BNB Governing 
Council. On the principles of delegation applicable in the context of U nion administration, see,  for example, Meroni & 
Co., Industrie Metallurghiche SpA v High Authority of the European Coal and Steel Community, C -9/56 
ECLI:EU:C:1958:7, and C -10/56, ECLI:EU:C:1958:4,  Carmine Salvatore Tralli v European Central Bank C -
301/02,ECLI:EU:C:2005:306,  AKZO Chemie BV and AKSO Chemie UK Ltd v Commission of the European 
Communities,  C-5/85, ECLI:E U:C:19 86:328, United Kingdom v Parliament and Council , C -270/12 
ECLI:EU:C:2014:18.