EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 14 November 2012 
on the stabilisation of the financial market 
(CON/2012/88) 
 
Introduction and legal basis 
On 31 October 2012, the European Central Bank (ECB)  received a request from  the German Federal 
Ministry of Finance for an opinion on a draft third law implementing measures for the stabilisation of the financial market (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 
1.1 The draft law is based on the Law of 17 Oc tober 2008 on financial market stabilisation
2 and its 
extensions on, inter alia , the nationalisation of credit institutions and bad bank schemes3. Some of 
the provisions have subsequently been phased out . The draft law amends the Law on the Financial 
Market Stabilisation Fund and several related Laws , as well as the Law on the Restructuring Fund. 
The draft law has the following main objectives: 
(a) Extension of the operation of the Financial Market Stabilisation Fund. The explanatory 
memorandum to the draft law points out that the transposition of the proposed directive establishing a framework for recovery and reso lution of credit institutions and investment 
firms
4 may take until 2015. Until that time the nati onal arrangements will need to remain in 
force. However, the Second Law on financial market stabilisation5 only allows new requests 
for Financial Market Stabilisation Fund measures  until the end of 2012. Therefore, the draft 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
2  [2008] Bundesgesetzblatt  I p. 1982. 
3  See Opinions CON/2008/57, CON/2009/24, CON/2009/54,  CON/2010/83 and CON/2012/2. All ECB opinions are 
published on the ECB’s webs ite at www.ecb.europa.eu. 
4  COM(2012) 280 final. 
5  [2012] Bundesgesetzblatt  I p. 206. 
ECB-PUBLIC  
2 law prolongs measures introduced by the Law on financial market stabilisation until 31 
December 2014. 
(b) Financial interlinking of the Financial Market Stabilisation Fund and the Restructuring 
Fund.  Currently, two separate systems finance the Financial Market Stabilisation Fund, 
providing pre-emptive recapitalisation support to  credit institutions, and the Restructuring 
Fund, supporting the orderly recovery or resolution of ailing credit institutions. The 
Financial Market Stabilisation Fund is backed  by the federal budget and the Restructuring 
Fund by the banking industry, with possible br idge financing from the federal budget. The 
draft law reduces budget risks by closer financial interconnection between both systems. In particular, for any possible losses resulting fro m future measures financed by the Financial 
Market Stabilisation Fund, recourse will be ta ken to the Restructuring Fund. Thus, the 
banking sector will bear the burden of future stabilisation measures. 
1.2 Furthermore, the draft law aligns the scope of institutions eligible for measures financed by the 
Financial Market Stabilisation Fund with the instituti ons eligible for restructuring measures that are 
generally subject to contributions to the Restru cturing Fund. In addition,  the Federal Financial 
Supervisory Authority (BaFin) will be consulted before initiating stabilisation measures that may 
affect operation of the restructuring measures by Ba Fin in relation to a credit institution. Moreover, 
the Bundestag will need to agree to dissolve the Financial Market Stabilisation Fund. Recourse to 
the Financial Market Stabilisation Fund for me asures having their basis until 2010 will not be 
subject to the debt brake. Lastly, the employment  contracts of the heads of resolution agencies are 
to be limited to five years, and their renewed appointment will be subject to agreement of the 
Federal Financial Market Stabilisation Authority. 
 2. General observations  In line with its previous opinions
6, the ECB emphasises that when adop ting measures to deal with the 
financial crisis, Member States should act in a co ordinated manner. While the extension of measures 
introduced by the Law on financial market stabilisation7 is based on legitimate grounds, the Member 
States will ultimately need to phase out such harmonised measures to maintain a level playing field in the 
Union8. It is expected that the German legislator will have to adjust German restructuring law once the 
harmonised Union regime for the restructuring and re solution of credit institutions has been introduced. 
 3. Financing of the Financial Market Stabilisation Fund The ECB welcomes the intention to decrease moral h azard in the budgetary financing of the Financial 
Markets Stabilisation Fund by the proposed financ ial interconnection between this Fund and the 
                                                 
6  See Opinions CON/2008/57, CON/ 2009/24, CON/2009/54 and CON/2010/83. 
7  Article 1(5) of the draft law, amending Section 4(1)(5 ) of the Law on the Financial Market Stabilisation Fund. 
8  See, inter alia , ECB Opinion CON/2008/57. 
ECB-PUBLIC  
3 Restructuring Fund which is already financed by banking industry contributions9. The ECB notes the 
need to ensure that the financial resources of resolution funds are adequa te and the contributions to such 
funds raised from credit institutions are set at a level which is appropriately calib rated to ensure financial 
stability.  
 4. Consultation of BaFin regarding a pplication of the stabilisation measures 
The ECB welcomes the introduction of the requirement to consult BaFin before stabilisation measures are 
introduced. This will facilitate the optimal selection of stabilisation and restructuring measures for an ailing credit institution
10. This is further justified in view of the proposed financial interconnection 
between the Financial Market Stabilisation Fund and the Restructuring Fund, which has direct 
implications for the financial resources availabl e for stabilisation and restructuring measures. 
 This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 14 November 2012. 
 
[signed] 
 
The Vice-President of the ECB 
Vítor CONSTÂNCIO 
                                                 
9  Article 1, Section 2(1) of the draft law. 
10  Article 1, Section 4(1a) of the draft law.