Opinion of the European Monetary Institute on a consultation from the Oesterreichische Nationalbank under Article 109f(6) of the Treaty establishing the European Community and Article 5.3 of the Statute of the EMI on drafts of official minimum reserve announcements 1/95, 2/95 and 3/95 (CON/95/2)
Date: 1995-03-10
Institutions: European Monetary Institute
Subjects: Austria, European System of Central Banks, financial institution, monetary policy, public sector, tax relief

EUROPEAN MONETARY INSTITUTE

OPINION OF THE EUROPEAN MONETARY INSTITUTE

on  a  consultation  from  the  Oesterreichische  Nationalbank  under  Article  109f(6)  of  the  Treaty

establishing the European Community and Article 5.3 of the Statute of the EMI

on drafts of official minimum reserve announcements 1/95, 2/95 and 3/95.

CON/95/2

1. 

The  present  consultation  was  initiated  on  2nd  February  1995  by  the  Oesterreichische

Nationalbank  which,  for  this  purpose,  transmitted  to  the  EMI  drafts  of  the  official  minimum

reserve announcements 1/95, 2/95 and 3/95, superseding the previous announcements 1-4/94.

2. 

The  main  purpose  of  the  change  is  to  remove  the  possibility  provided  for  in  the

Nationalbankgesetz  (National  Bank  Act)  of  holding  minimum  reserves  in  the  form  of  Federal

Treasury  Certificates  issued  under  National  Bank  Act  Article  41.  In  addition,  the  presently

existing minimum reserve ratios are to be lowered.

3. 

The EMI´s competence to deliver an opinion in this consultation is based on Article 1, paragraph

1, second indent, of Council Decision  93/717/EC of 22 November 1993, as the drafts deal with

instruments of monetary policy and in particular with their adaptation to secondary EC legislation

in the field of Article 104 and 104a of the EC Treaty.

4. 

The  envisaged  abolition  of  the  eligibility  of  Federal  Treasury  Certificates  to  count  towards

fulfilment  of  the  minimum  reserve  obligation  is  a  necessary  step  to  ensure  compliance  of  the

Oesterreichische Nationalbank with the prohibitions referred to in Article 104a of the EC Treaty.

In  fact,  the  acceptance  of  these  certificates  as  eligible  assets  can  be  seen  as  conferring  a  tax

advantage to financial institutions which encourages the acquiring or the holding of such liabilities

by those institutions. This has to be regarded as a means of establishing privileged access by the

public sector according to Article 1 paragraph 1, second indent, of Council Regulation (EC) No.

3604/93 of 13 December 1993 which needs to be abolished. Moreover, although not the subject

of  this  consultation,  the  same  assessment  would  also  apply  to  the  underlying  Articles  of  the

 
 
 
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National  Bank  Act  (Articles  41  (1)  and  43  (6)),  which  should  be  in  conformity  with  the  legal

situation laid down in Article 104a of the EC-Treaty as well.

5. 

On  the  other  issues  contained  in  the  draft  announcements,  the  EMI  considers  it  premature  to

formulate a definitive view as to whether the envisaged rules will be compatible with the future

system  of  the  ESCB,  as  discussions  concerning  the  desirable  features  of  this  system  have  not

yet been completed.

6. 

Finally, the Council of the EMI agrees with the Oesterreichische Nationalbank’s view outlined in

its  request  for  consultation  that  in  cases  of  mere  amendments  of  minimum  reserves  ratios,

consultation  of  the  EMI  would  not  be  required,  since  the  amendment  of  those  ratios  can  be

classified as an act of implementation of existing legislative provisions rather than as the adoption

of  new  legislation.  Moreover,  the  fourth  consideration  in  the  preamble  of  Council  Decision

93/717/EC does exempt from consultation decisions taken by national authorities in the context

of the implementation of monetary policy.

10th March 1995