Opinion of the European Monetary Institute on a consultation from the Bank of Greece under Article 109f (6) of the Treaty establishing the European Community (the “Treaty”) and Article 5.3 of the Statute of the EMI as elaborated in the Council Decision of 22nd November 1993 (93/717/EC) (the “Decision”) on draft legislative provisions supplementing Law 5422/1932 referring to the regulatory framework for the operation, control and supervision by the Bank of Greece of persons (legal or natural) authorised to buy and sell foreign currency, especially credit institutions and bureaux de change (CON/97/03)
Date: 1997-03-17
Institutions: European Monetary Institute
Subjects: Greece, central bank, financial stability, financial supervision, foreign currency, national law

GS/LD/97/128

OPINION OF THE EUROPEAN MONETARY INSTITUTE

on  a  consultation  from  the  Bank  of  Greece  under  Article  109f  (6)  of  the  Treaty  establishing  the

European  Community  (the  “Treaty”)  and  Article  5.3  of  the  Statute  of  the  EMI  as  elaborated  in  the

Council Decision of 22nd November 1993 (93/717/EC) (the “Decision”)

on draft legislative provisions supplementing Law 5422/1932 referring to the regulatory framework for

the operation, control and supervision by the Bank of Greece of persons (legal or natural) authorised to

buy and sell foreign currency, especially credit institutions and bureaux de change.

CON/97/03

1.

The  above  consultation  was  initiated  by  the  Bank  of  Greece,  which  on  17th  February  1997

submitted the relevant draft provisions to the European Monetary Institute.

2.

The EMI’s competence to deliver an opinion is based on Article 1, section 1 of the Decision, as

the  draft  provisions  relate,  inter  alia,  to  the  following:  the  status  and  powers  of  the  Bank  of

Greece (second indent of section 1); and, rules which may have an impact upon the stability of

financial institutions and markets (fifth indent of section 1).

3.

It  is  foreseen  in  the  draft  provisions  that  the  Bank  of  Greece  will  be  further  involved  in  the

supervision of legal and natural persons authorised to buy and sell foreign currency by setting the

general  regulatory  framework  for  the  operation,  control  and  supervision  of  such  parties.  The

EMI  is  of  the  opinion  that  this  further  involvement  is  not,  in  principle,  inconsistent  with  the

requirement  for  independence  of  central  banks,  imposed  by  Article  107  of  the  Treaty  as

reflected in Article 7 of the Statute of the ESCB, nor is it incompatible with either the Treaty or

the Statute of the ESCB (so as to be contrary to the requirements of Article 108 of the Treaty as

reflected in Article 14.1 of the Statute of the ESCB). This evaluation does not prejudge the rights

of the ECB under Article 14.4 of the Statute of the ESCB.

4. With regard to the substance of the envisaged measures the draft entitles the Bank, in particular,

to  request  bureaux  de  change  to  establish  a  higher  minimum  capital  than  applying  for  other

sociétés anonymes, to differentiate this amount according to the number of branches in operation

and  to  oblige  to  deposit  part  of  this  amount  with  the  Bank  of  Greece.  The  Bank  may  also  lay

down the details for cases of non-compliance. These competence given to the Bank of Greece

can be considered as aiming at ensuring the soundness and reliability of the market participants

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and therefore foster the overall stability of financial institutions or financial markets. They do not

infringe the Treaty on European Union or its underlying principles.

5.

The EMI confirms that it has no objection to this opinion being made public.

17 March 1997