EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 23 August 2011  
on a special levy on financial institutions operating in Slovakia 
(CON/2011/66) 
 
Introduction and legal basis  
On 25 July 2011 the European Central Bank (ECB) received a request from the Slovak Ministry of 
Finance for an opinion on the draft law on a special  levy on selected financial institutions, on an 
amendment to Law No 479/2009 Coll. on state administration authorities in the field of taxes and charges and on amendments to certain laws (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 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 provisions
1, as the draft law relates to rules applicable  to financial institutions insofar as they 
materially influence the stability of financial ins titutions 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.  Purpose of the draft law 
The draft law imposes an obligation on banks and br anches of foreign banks (hereinafter jointly the 
‘banks’) to pay a special levy, the proceeds of whic h are to be held in a separate extra-budgetary account 
intended to cover costs related to the resolution of fina ncial crises in the banking sector and to protect the 
stability of the banking sector in Slovakia
2. The rate of the levy for the respective calendar year will be 
0.2% of the amount of liabilities of the bank reported in the balance sheet3, with certain deductions 
including: (a) the amount of the bank’s equity, provided that its value is positive; (b) the value of financial 
resources provided to the branch of a foreign bank on a long term basis; (c) the value of subordinated 
debt; (d) the value of deposits received by the ba nk within the territory of the Slovak Republic and 
protected according to a special regulation4; (e) the value of deposits rece ived by the bank within the 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  See Article 4(1) to (3) of the draft law.  
3  The ECB understands that these liabilities are non-consolidated, i.e. are on an individual basis. 
4  Law No 118/1996 Coll. on the protection of bank de posits and amending certain other laws, as amended. 
ECB-PUBLIC 
2 territory of Slovak Republic and protected in ot her Member State of th e European Economic Area5. 
Levies shall be administered by the Tax Office for Selected Tax Entities6.  
 2. Collection of the bank levy  2.1 As noted in the general part of th e explanatory memorandum to the draft law
7, the imposition of the 
bank levy introduces the risk of ‘double charging ’ which may arise when Member States introduce 
bank levies on subsidiaries of their own financial in stitutions resident in other Member States or on 
foreign branches of Union banks resident in their own territory. There is therefore a risk that the 
draft law may result in double charging, in par ticular through the imposition of a levy on branches 
of foreign banks8. In this context, the ECB notes that th e European Council has called for ‘further 
coordination between different levy sch emes in order to avoid double-charging’9.  
2.2 The ECB supports the development of a harmonised approach to bank levies, which should be 
aligned with the developing Union frame work for bank recovery and resolution10 and is 
complementary to existing regulation. The deve lopment of this harmonised approach would 
achieve the overall objective of preserving the leve l-playing field, whilst limiting distortions to 
competition, and ensuring that financial stability is equally safeguarded. This is particularly 
important in the Union where the introduction of  different bank levy schemes could potentially 
undermine the process of financial integration by introducing elements of fiscal, regulatory and supervisory fragmentation. Hence, the ECB invit es the Slovak authorities to amend the draft law to 
introduce an approach which is flexible e nough to adapt to the ongoing changes in Union 
regulation and supports the medium-term Union harmonised solution, e.g. through the built-in 
flexibility of a ‘rendez-vous clause’.  
2.3 To enhance coordination between the relevant hom e and host authorities in these matters, the ECB 
highlights the need for the Slovak authorities to info rm, where possible, in advance, the supervisory 
and fiscal authorities of the countries concerned, rega rding the plan to introduce a levy system that 
will impose charges on foreign branches in Slovakia.  
2.4  Moreover, in accordance with its recent opinion
11, the ECB invites the Slovak authorities to 
consider introducing rules for replenishing the funds collected through the levy where part or all of 
such funds are subsequently used to finance resolution measures.  
                                                 
5  See Article 2(a) of the draft law.  
6  See Article 2(b) of the draft law.  
7  See p. 1 of the general part of the e xplanatory memorandum to the draft law.  
8  See Article 1(a) of the draft law.  
9  See conclusion of the European Council of 28-29 October 2010, available at the Council website at 
www.consilium.europa.eu.  
10  See the work on Union legislation aimed at harmonising ba nk recovery and resolution rules initiated by the European 
Commission and in particular, the DG Internal Market and Se rvices working document: techni cal details of a possible EU 
framework for bank recovery and resolution of 6 January 2011, available on th e Commission’s website at 
http://ec.europa.eu.  
11  See paragraph 3.6 of Opinion CON/2011/29. All ECB opinions are published on the ECB’s website at 
www.ecb.europa.eu.   
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3  
3. Administration and use of the resolution fund 3.1 As noted in the general part of th e explanatory memorandum to the draft law
12, the levy is expected 
to contribute to creating a dedicated resolution me chanism for banks. To this effect, the draft law 
specifies that proceeds of the levy are to be held  in a separate extra-budgetary account intended to 
cover costs related to the resolution of financial cr ises in the banking sector and to protect financial 
stability13. The ECB understands that the proposed levy is  to be collected by the general taxation 
authorities14 and will be governed by the gene ral rules of tax administration15. Moreover, the draft 
law does not address any further specific provision s as to the conditions under which the levy 
proceeds are to be applied to finance bank resolution measures.  
3.2 The ECB makes the following specific observations regarding the administration and use of the 
resolution fund, which is created on the basis of the levy proceeds. 
3.2.1 The ECB recommends that, as a minimum, a cl earer separation is introduced between the extra-
budgetary account created out of the levy pr oceeds, and the general budgetary resources16. Potential 
use of the levy’s proceeds to reduce public deficit and failure to establish, in the long term, 
dedicated resolution funds may result in an incr easing dependence of the financial sector on public 
funds, particularly where crisis conditions may reoccur, which would strengthen the moral hazard 
concerns.  
3.2.2 In line with its recent opinion17, the ECB recommends that detailed rules on the application of the 
resolution fund to finance the bank resolution measur es are set out in the draft law or in another 
adequate legal instrument. Such rules should, in particular, help to limit moral hazard in connection 
with the application of the resolution fund. A primary purpose of resolution funds should be to 
mitigate the effects of a bank failure for the diffe rent stakeholders, including customers, the real 
economy and taxpayers. In particular, this implies th at resolution funds should not be used for any 
form of bailout or to avoid a bank’s insolvency. Th erefore, stringent conditions for their use need to 
be defined, including no automatic relationshi p between fund contributions and pay-out, and 
decisions about the use of the funds should r eside with independent and accountable public 
authorities. The ECB made further recommenda tions in this respect in a recent opinion18, to which 
                                                 
12  See page 1 of the general part of the explanatory memorandum.  
13  See Article 4(3) of the draft law.   
14  See Article 2(b) of the draft law.   
15  See Article 5 of the draft law, referring in the footnotes  to the Law No 563/2009 Coll. on the administration of taxes and 
amending certain other laws.   
16  According to the draft law, the use of state financial a ssets consisting of collected le vies will be governed by Law 
No 523/2004 Coll. on budgetary rules of the public ad ministration and amending  certain other laws. 
17  See paragraph 3.2 of Opinion CON/2011/29.  
18  See paragraph 3.4 of Opinion CON/2011/29.  
ECB-PUBLIC 
4 it draws the attention of the Slovak authorities, whils t at the same time inviting them to monitor the 
harmonised solutions which are being deve loped in this respect at Union level19. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 23 August 2011. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET 
 
                                                 
19  See the work on Union legislation aimed at harmonising ba nk recovery and resolution rules initiated by the Commission 
and in particular, the DG Internal Market  and Services working document: technical details of a possible EU framework 
for bank recovery and resolution of 6 January 2011, avai lable on the Commission’s website  at http://ec.europa.eu.