EN 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 4 August 2005  
at the request of Národná banka Slovenska on a draft law amending the Act No 566/1992 Coll. on 
Národná banka Slovenska, as amended, and on amendments to certain laws 
(CON/2005/26) 
 1. On 20 June 2005 the European Central Bank (E CB) received a request from Národná banka 
Slovenska (NBS) for an opinion on a draft law amending the Act No 566/1992 Coll. on Národná 
banka Slovenska, as amended, and on  amendments to certain laws (hereinafter the ‘draft law’).  
2. The ECB’s competence to deliver an opinion is based on the first and third indents of Article 2(1) 
of Council Decision 98/415/EC of 29 June 1998 on th e consultation of the European Central Bank 
by national authorities regarding draft legislative provisions
1, as the draft law contains provisions 
concerning currency matters and a national centr al bank (NCB). In accordance with the first 
sentence of Article 17.5 of the Rules of Procedur e of the European Central Bank, the Governing 
Council has adopted this opinion. 
3. According to the general part of the proposal report accompanying the draft law, the draft law’s 
main objective is to reflect the change in NBS’s co mpetence in relation to integrated supervision of 
the whole financial market in the Slovak Republic. This aim is to be achieved in particular by 
amending the Act No 566/1992 Coll. on Národná ba nka Slovenska, as amended (hereinafter the 
‘NBS Act’). In this regard it is recalled that th e ECB was consulted and issued an opinion in 2004 
on the transfer of responsibility for the superv ision of the non-banking financial sector (capital 
markets, insurance and pensions) from the Sl ovak Financial Market Authority to NBS from 
1 January 20062. Furthermore, the draft law contains miscellaneous (in some cases recasted) 
provisions of the NBS Act relating to, inter alia : (i) the submission by NBS of periodic reports on 
monetary developments to the National Council of the Slovak Republic (hereinafter the ‘National 
Council’); (ii) the designation of NBS as the Slovak national centre for the analysis and monitoring 
of counterfeit euro banknotes and coins; (iii)  the conduct of open market operations and the 
collateralisation of credit operations by NBS; (iv) the performance of fiscal agency functions by 
NBS for the Slovak Republic; and (v) certain initial preparations for the future introduction of the 
euro as the currency of the Slovak Republic. 
                                                      
1  OJ L 189, 3.7.1998, p. 42. 
2  See ECB Opinion CON/2004/31 of 22 September 2004 at the request of Národná banka Slovenska on a draft law on 
supervision of the financial market and on amendments to certain laws. 
 
2 4. Under existing provisions of Slovak law, NBS has the task of supervising the safe functioning of 
the banking system and of contributing to the stability of the financial system as a whole. In line with NBS’s wider supervisory responsibilities, the draft law provides that, in the area of the 
financial market, NBS will contribute to the stability of the financial system as a whole as well as to 
the secure and sound functioning of the financial mark et in the interests of sustaining the credibility 
of the financial market, the protection of clients and respect for competition rules. As noted in paragraph 10 of ECB Opinion CON/2004/31, the ECB ‘favours recognising in the supervisory 
framework the clear distinction between the two goals  of financial stability and investor protection.’ 
The ECB therefore welcomes these provisions of th e draft law, which will adequately balance 
NBS’s macro and micro-prudential responsibilities in the areas of financial stability and the protection of investors.  
5. The ECB takes note that the draft law further adjusts the competences and composition of NBS’s 
Bank Board (hereinafter the ‘Board’), increasing the number of Board members from eight to eleven in order to broaden the representation of specialists from the field of supervision of the 
capital market, insurance and pensions, and wi dening the Board’s competences to include the 
supervision and regulation of the Slovak financial market.  
6. The draft law amends Article 3 of the NBS Act relating to the submission by NBS of semi-annual 
and annual reports on monetary developments to  the National Council. The ECB understands that 
the reports are submitted to the National Council for information purposes only, and that the deliberations
3 of the National Council thereon do not imply that the reports are required to be 
adopted or approved by the National Council.  
7. The ECB notes that pursuant to the draft law, Article  7(9) of the NBS Act will stipulate that unless 
Article 14.2 of the Statute of the European System of Central Banks and of the European Central Bank provides otherwise, a member of the Board may only be removed from office in the event 
that: (a) they have been legally sentenced by a cour t for an intentional criminal offence; (b) they no 
longer fulfil the preconditions for performing the office of a member of the Board; or (c) they have 
taken up an office, occupation, employment, or activ ity that is incompatible with membership of 
the Board or have otherwise breached the provisions of the NBS Act governing  conflicts of interest.  
8. As noted on page 27 of the ECB Convergence Re port 2004, ‘NCB statutes must ensure that 
Governors may not be dismissed for reasons othe r than those mentioned in Article 14.2 of the 
Statute. […] The NCB statutes should either cont ain grounds for dismissal which are compatible 
with those laid down in Article 14.2 of the Statut e, or omit any mention of grounds for dismissal 
since Article 14.2 is directly applicable.’  Th e report goes on to say that ‘Personal independence 
would be jeopardised if the same rules for the security of tenure of office of Governors were not also applied to other members of the decision- making bodies of NCBs involved in the performance 
                                                     
 
3  Article 2(2)(ch) of the Act No 350/1996 Coll. on the rules of procedure of the National Council of the Slovak Republic, as 
last amended. 
 
3 of ESCB-related tasks. Various Treaty and Statute pr ovisions require comparable security of tenure. 
Article 14.2 of the Statute does not restrict the security of tenure of office to Governors, whilst Article 108 of the Treaty and Article 7 of the St atute refer to any members of decision-making 
bodies of NCBs rather than to Governors specifically . This applies in particular where a Governor 
is primus inter pares  between colleagues with equivalent voting rights or where such other 
members may have to deputise for the Governor.’ Therefore, the ECB would strongly recommend referring to Article 14.2 of the Statute when stati ng the reasons for dismissal of a Board member.  
9. The ECB also takes note of the provisions of th e draft law pursuant to which NBS will fulfil the 
functions and tasks of national centres for the anal ysis and monitoring of counterfeit euro banknotes 
and coins
4. In this regard the ECB notes that NCBs in certain other Member States have also been 
given this particular task. 
10. Regarding the conduct of open mark et operations and the collatera lisation of central bank credit 
operations, the ECB notes that NBS is currently only entitled to purchase from (or sell to) banks 
bills of exchange maturing within six months a nd government bonds (or other securities guaranteed 
by the Government), which it may hold for a maxi mum period of one year, and to provide banks 
with loans secured by such securities. Under the draft law NBS will be entitled to deal in any 
securities it has specified with banks, foreign bank s and other financial institutions. NBS will also 
be entitled to accept assets it has specified as secur ity in its credit operations. The ECB welcomes 
this more flexible statutory framework, which is more in line with the statutory framework for the 
Eurosystem’s monetary policy and intraday credit oper ations. In this regard, it is noted that Article 
18.1 of the Statute provides that the NCBs may operate in the financial markets by buying and 
selling outright (spot and forward) or under re purchase agreement and by lending or borrowing 
claims and marketable instruments, and may conduct credit ope rations with credit institutions and 
other market participants, with lending  being based on adequate collateral. 
11. The ECB takes note that the draft law amends the provisions of the NBS Act  regarding the 
operations of NBS with the Slovak Republic. In pa rticular the draft law provides that NBS may 
maintain the accounts of the State Treasury and pr ovide additional services to, and cooperate with, 
the State Treasury and the Agency for Debt and Liquidity Management, subject to more detailed 
regulation contained in separate legislation, pr imarily Act No 291/2002 on the State Treasury and 
on amendments to certain laws (hereinafter the ‘S tate Treasury Act’). Article 11(1) of the State 
Treasury Act provides that NBS maintains the ‘si ngle account’ of the State Treasury, which is a 
memorandum account containing a summary of the balances of all accounts of the State Treasury held with NBS. NBS also maintains a State Treasury settlement account to cover and meet 
liabilities arising from participation in the paymen t system pursuant to Act No 510/2002 Coll. on 
the payment system and on amendments to certain laws, as amended, and the State Treasury’s foreign exchange accounts, including the account holding funds of the European Communities, the 
                                                     
 
4  This provision implements Articles 4 and 5 of Council Regulation (EC) No 1338/2001 of 28 June 2001 laying down 
measures necessary for the protection of the euro against counterfeiting (OJ L 181, 4.7.2001, p. 6). 
 
4 balances of which are recorded in the single account5. NBS is also authorised: (i) to carry out cross-
border transfers6 for, and to enable cash withdrawals and deposits7 by, clients of the State Treasury; 
(ii) to provide additional services to, and to coopera te with, the State Treasury and the Agency for 
Debt and Liquidity Mangement in their respective fields of competence8; and (iii) to carry out 
foreign currency transfers for the Agency for Debt and Liquidity Mangement on behalf of the State Treasury
9. Finally, the State Treasury Act provides that  agreements between the State Treasury and 
NBS govern the holding of accounts of the State Tr easury with NBS, clearing on such accounts and 
the conduct of additional services by NBS for the State Treasury, including the conditions and 
means of remuneration on credit balances of the State Treasury’s accounts held with NBS and 
recorded in the single account10.  
12. The operations conducted by NBS with the Slovak Re public are, generally speaking, operations of 
a kind that are performed by most, if not all, N CBs within the European System of Central Banks 
(ESCB). This is is in accordance with Article 21.2 of the Statute, which pr ovides that the ECB and 
the NCBs may act as fiscal agents for Community  institutions or bodies, central governments, 
regional, local or other public authorities, other bodies governed by public law, or public 
undertakings of Member States. The ECB notes that both the draft law and the State Treasury Act contain important safeguards ensuring the compatibility of such operations with the prohibition on monetary financing contained in Article 101( 1) of the Treaty establishing the European 
Community. In particular, the draft law provides that NBS may execute payments from the accounts of the State Treasury only up to the amou nt of any credit balance on such accounts. In 
addition, the State Treasury Act provides that th e accounts of the State Treasury held with NBS 
must have a credit balance
11. The ECB welcomes these provisions, which exclude the possibility of 
contravening the Treaty prohibition on overdraft facilities or any other type of credit facility by 
NBS in favour of the State Treasury as laid dow n in Article 102. Regarding additional services 
provided by NBS to the State Treasury and the Agency for Debt and Liquidity Management, the 
ECB notes that these activities are permissible insofar as they form part of an NCB’s fiscal agency 
function under Article 21.2 of the Statute, together  with the other relevant provisions of Community 
law12. The ECB notes that the services currently prov ided by NBS to the State Treasury and the 
Agency for Debt and Liquidity Management do no t appear to go beyond the scope of what is 
permissible. Finally, regarding the detailed c ontractual provisions agreed between the State 
                                                      
5  See Article 21(1) of the State Treasury Act. 
6  See Article 6(1)(n) of the State Treasury Act. 
7  See Article 12(4) of the State Treasury Act. 
8  See Article 17(n) of the State Treasury Act. 
9  See Article 19(2) of the State Treasury Act. 
10  See Article 21(1) of the State Treasury Act. 
11  See Article 11(2) of the State Treasury Act.  
12  More detailed provisions defining the scope of the Treaty pr ohibition on monetary financing, including with respect to the 
performance of a NCB’s fiscal agency function, are contai ned in Council Regulation (EC) No 3603/93 of 13 December 
1993 specifying the definitions for the application of the prohi bition referred to in Articles 104 and 104b(1) of the Treaty 
(OJ L 332, 31.12.1993, p. 1). 
 
5 Treasury and NBS on the holding, clearing and remuneration of the State Treasury’s accounts with 
NBS, the ECB understands that these contracts fu lly comply with the abovementioned safeguards 
and provisions of Community law. 
13. The ECB takes particular note of the draft law’s pr ovisions regarding the future introduction of the 
euro as the currency of the Slovak Republic. In pa rticular, the ECB welcomes the fact that NBS has 
been given the task of ensuring the performance of preparatory activities for the introduction of the 
euro as the monetary unit and legal tender in the Slovak Republic. The ECB emphasises the strong 
synergy between this task of NBS under Slovak law and the responsibility of the ECB’s General 
Council (of which the Governor of NBS is a member ) under Article 47.3 of the Statute to contribute 
to the necessary preparations for irrevocably fixing  the exchange rates of the currencies of Member 
States with a derogation against the euro. The ECB also notes that, under the draft law, NBS must ensure that the Slovak side of euro coins contains  the inscription ‘Slovakia’ or ‘Slovak Republic’. 
This provision is in line with the recent conclusi ons of the Council (ECOFIN) at its meeting held in 
Luxembourg on 7 June 2005, which concluded that since euro coins circulate throughout the euro area, Member States should put a clear indication of  the issuing Member State on the national side 
of euro coins by means of a Member State’s name  or an abbreviation of it. Finally, the ECB notes 
that the draft law excludes the application to euro banknotes and coins of certain provisions of 
national law that would otherwise apply to ba nknotes and coins, such as Article 3(6)(i) of 
Act No 63/1993 Coll. on state symbols of the Slovak Republic and their use. 
14. This opinion will be published on the ECB’s website. 
  Done at Frankfurt am Main, 4 August 2005. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET