EN ECB -PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 2 May 2014  
on the resolution of crises in the financial markets  
(CON/20 14/31)  
 
Introduction and legal basis  
On 27 March 2014, the European Central Bank (ECB) received  a request from the Finnish Ministry of 
Finance  for an opinion on a draft law on the resolution of credit institutions and investme nt firms, a draft 
law on the Financial Crisis Resolution Authority and  several related draft laws (hereinafter ‘the draft 
laws’ ). 
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 and sixth indent s of Article  2(1) of Council Decision 
98/415/EC1, as the draft laws relate to Suomen Pankki and to rules applicable to financial insti tutions 
insofar as they influence the stability of financial institutions and markets. 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.  Purpos e of the draft  laws  
1.1 The main  purpose of the draft la ws is to introduce legislative changes in Finland relating to  the 
Banking  Union and i n particular  to implement  the proposed Bank Recovery and Resolution 
Directive2 (BRRD)  and the proposed recast  Depos it Guarantee  Scheme Directive3 (DGSD) . The 
draft laws foresee the establishment of a new Resolution Authority and a new Deposit Guarantee  
and Resolution Fund, while  the Financial Supervisory Authority (i.e. the national competent 
authority for banking supe rvision ) will be given new ex -ante powers. Law No 379/1992 on the 
Government Guarantee Fund, which concerns public assistance, and  Law No 986/2012 on the 
temporary bank levy would both be repealed.  The funds raised by the bank levy will be transferred 
to the proposed Deposit Guarantee and Resolution Fund, which would be a fund outside the central 
government budget and managed by the Resolution Authority  and, from 2016 onwards, could be 
                                                 
1  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative pr ovisions (OJ L 189, 3.7.1998, p. 42) . 
2   Proposal for a d irective of the European Parliament and of the Council establishing a framework for the recovery and 
resolution of credit institutions and investment firms (COM (2012) 280 final) . 
3   Proposal for a  directive …/…/EU of the European Parliament and of the Council on Deposit Guarantee Schemes  
(COM  (2010) 368 final) . 
ECB -PUBLIC  
2 transferred to the Single Resolution Fund of the Member States participa ting in the Banking Union . 
It is intended that the draft laws will enter into force on 1 January 2015.  
1.2 The Resolution Authority, the Ministry of Finance , the Financial Supervisory Authority  and 
Suomen Pankki would be required to cooperate in the planni ng and preparation of crisis resolution 
measures outlined in the draft l aw on the resolution of credit institutions and investment firms , as 
well as in monitoring the decisions made. In addition to the general duty to cooperate , the draft 
laws propose  that the Resolution Authority will be required  to decide, in cooperation with the 
Financial Supervisory Authority and Suomen Pankki, whether payment s are to  be made from the 
Deposit Guarantee and Resolution Fund. The d raft laws also contain several provisions concern ing 
the duty  of the Resolution Authority, the Financial Supervisory Authority and  the Ministry of 
Finance  to request  Suomen Pankki ’s opinion prior to making decisions and to notify Suomen 
Pankki of the  decisions made. In addition,  both the Resolution Authority and Suomen Pankki 
would have the duty to share with  each other , without delay , any data in their possession 
concerning : (a) matters that may have a significant impact on the stability of the financial markets 
or otherwise on the development of the financial markets;  and (b) matters that may result in 
significant disruption to the operation of the financial system or to the continuation of the 
operations of a credit institut ion or investment firm.  
1.3 Moreover , the Resolution Authority would have  an Advisory Committee consisting of 
representatives appointed by the Ministry of Finance on the proposal s of the Resolution Authority, 
Suomen Pankki and the Financial Supervis ory Authority . The Advisory Committee would have the 
task to ensure cooperation and communication between the said authorities.   
1.4 Although Suomen Pankki would have a predominantly cooperative and consultative role in the 
resolution of credit institutions and investment firms , the draft laws propose  that in a crisis situation  
the Resolution Authority ’s staff  could be increased through the temporary secondment of civil 
servants from  the Ministry of Finance, Suomen Pankki or the Financial Supervis ory Authority. A 
decision to second a civil servant would require the consent of the civil  servant in question and 
would be made by the Government , on the proposal of the  Director General of the Resolution 
Authority , after hearing the employer of the civil servant in question.  
 
2. General observations  
The ECB notes that the Finnish authorities  have decided in advance of the adoption of the BRRD and the 
DGSD to transpose provisions which they consider to be close to finalisation. The ECB understands that, 
once the BRRD is adopted, the framework established under the draft laws will be reviewed i n order to 
ensure full consistency with any further developments at Union level .  
The ECB also notes that , whereas the draft law s take due account of the forthcoming Regulation on the 
ECB -PUBLIC  
3 Single Resolution Mechanism  (SRM)4 and are intended to enter into force at the same time as th at 
Regulation, there is a need to ensure consistency during the period after  which  the ECB has assumed its 
tasks under  Council Regulation (EU) No  1024/20135 but before all of the provisions of the proposed 
SRM Regulation are  applicabl e (i.e. 1 January 2016). Hence, where appropriate, the draft law s should 
refer to the competent authority  as including the ECB  and not just the Financial Supervisory Authority . 
 
3. The Resolution Authority’s competence  
The ECB notes that , once the SRM Reg ulation is applicable,  the Resolution Authority  will only be 
responsible  for those  institutions which are not unde r direct ECB supervision and are not  cross -border  
institutions . However, it will not be limited in its tasks to such institutions . According t o the proposed 
SRM Regulation, the Resolution Authority  is to  assist  the Single Resolution Board  (hereinafter ‘the 
Board ’) in resolution planning and in preparing resolution decisions for banks  under the  Board’s 
responsibility . The Resolution Authority wil l also assist in the implementation of  a resolution scheme 
established by the Board by exercising resolution  powers and tools  in relation to the entities in question . It 
is important that the Resolution Authority has adequate resources for its task s, especially considering that, 
at times, there may be a lot of work to be done in a limited time frame  and sometimes at short notice .  
 4. Suomen Pankki ’s involvement   
The ECB understands that the tasks allocated to Suomen Pankki by the draft laws  do not interfer e with 
the performance of its Eurosystem -related tasks under  the Treaty and do not prejudice the financial means 
necessary to carry  out those  tasks. Any involvement of Suomen Pankki or the members of its decision -
making bodies in measures to strengthen fin ancial stability must be compatible with the Treaty and, 
consequently,  with Suomen Pankki ’s institutional and financial independence  and the personal 
independence of the members of its decision -making bodies safeguarding the proper performance of their 
tasks under the Treaty and the Statute of the European System of Central Banks and of the European 
Central Bank
6.  
The ECB welcomes the tasks allocated to Suomen Pankki under the draft laws , which are broadly 
consistent with its financial stability role.   
The ECB notes , as regards the secondment of Suomen Pankki  staff to the Resolution Authority , that the 
draft laws require the consent of the civil servant concerned but that the employer will only be heard. The 
draft laws should also require  Suomen Pankki ’s co nsent  in order to respect the principle of central bank 
independence, in particular the principle of financial independence. One aspect of the principle of financial independence is the autonomy of a national central bank ( NCB ) in staff matters which means, 
                                                 
4  Proposal for a regulation of the European Parliament and of the Council establishing uniform rules and a uniform 
procedure for the resol ution of credit institutions and certain investment firms in the framework of a Single Resolution 
Mechanism and a Single Bank Resolution Fund (COM  (2013)  520 final). 
5  Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on th e Europ ean Central Bank 
concerning policies relating to the prudential supervision of credit institutions  (OJ L 287, 29.10.2013, p. 63) .  
6  See Protocol (No 4) on the Statute of the European System of Central Banks and of the E uropean Central Bank 
(OJ C 326, 26.10.2012,  p. 230). 
ECB -PUBLIC  
4 inter alia , that an  NCB may not be put into a position where it has limited control or no control over its  
staff, or where the G overnment of a Member State can infl uence its policy on staff matters7. 
 
5.  The ECB ’s involvement  as regards significant cred it institutions  
The draft law on the resolution of credit institutions and investment firms foresees arrangements for 
cooperation between the Financial Crisis Resolution Bureau  (i.e. the national resolution authority)  and the 
Financial Supervis ory Authorit y in a number of circumstances . For instance,  if the Financial Crisis 
Resolution Bureau considers that the preconditions for placing an institution under resolution 
management have been met , it is to take a decision to place the institution under resolution management  
after hearing the F inancial Supervis ory Authority  on the matter (or after having received a notice from the 
Financial Supervis ory Authority8). The ECB understands that the Financial Crisis Resolution Bureau will 
be competent for the resolution and planning of the resolution of institutions that do not fall within the 
scope of the proposed SRM Regulation. As a consequence, the Financial Supervis ory Authority should 
only be heard in respect of institutions that are not directly supervised by the ECB. In this regard, the 
ECB notes that it will assume the supervisory tasks conferred on i t by Council Regulation 
(EU)  No 1024/2013 on 4 November  2014. However, not all of the provisions  of the proposed SRM  
Regulation will apply  on its planned date of ent ry in force ; certain provisions will only apply as of 
1 January 2016. Therefore, there is a need to take into account the period  between the date when the ECB 
assumes the direct supervision of credit institutions and the date of full application  of the proposed SRM 
Regulation, as during this period elements of the draft law will apply to  credit institutions under ECB 
supervision. In this period , the Financial Crisis Resolution Bureau should closely  cooperate with the 
compete nt authority, including the ECB.  
Pursuant  to Chapter 16, Article 2 of the draft law on the resolution of credit institutions and investment 
firms , the Ministry of Finance  is to  request an opinion from both Suomen Pankki and the Financial 
Supervisory Authority  before placing limits on  the operations of credit institutions . The ECB understands  
                                                 
7  See, for example , the ECB’s Convergence Report 2013 , p. 27.  
8  See Chapter 11, Article 5 a, paragraph 4 , of the proposed Law  on credit institutions . 
ECB -PUBLIC  
5 that this is without prejudice to the cooperation to be undertaken with the ECB , as competent authority, 
once the ECB assumes  its supervisory powers on 4 November  2014.  
 
This opinion will be publishe d on the ECB’s website.  
  
Done at Frankfurt am Main, 2 May 2014.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI