Opinion of the European Central Bank at the request of the Swedish Ministry of Finance under Article 109f (6) of the Treaty establishing the European Community (the "Treaty") and Article 5.3 of the Statute of the EMI on a draft legislative proposal to amend the Riksbank Act (CON/98/25)
Date: 1998-06-10
Institutions: European Central Bank
Subjects: Sweden, financial institution, monetary policy, national law, terminology

OPINION OF THE EUROPEAN CENTRAL BANK

at  the  request  of  the  Swedish  Ministry  of  Finance  under  Article  109f  (6)  of  the  Treaty

establishing the European Community (the “Treaty”) and Article 5.3 of the Statute of the EMI

on a draft legislative proposal to amend the Riksbank Act

CON/98/25

1.

On  23  April  1998  the  EMI  received  a  request  from  the  Swedish  Ministry  of  Finance  for  an

opinion on a draft legislative proposal to amend the Riksbank Act (“Lagrådsremiss - Ändringar

i lagen (1988 : 1385) om Sveriges riksbank”) and on 11 May 1998 the EMI received a revised

version of the legislative proposal (“Regeringens proposition 1997/98 : 164 - Ändringar i lagen

(1988 : 1385) om Sveriges riksbank”) (the “legislative proposal”).

2.

In  accordance  with  Article  1091  (2)  of  the  Treaty,  the  ECB  has  taken  over  the  advisory

functions of the EMI which has gone into liquidation upon the establishment of the ECB on 1

June 1998. The ECB’s competence to deliver an opinion is based on Article 1.1, second indent,

of the Council Decision (93/717/EC) of 22 November 1993 on the consultation of the EMI by

the authorities of the Member States on draft legislative provisions, as the legislative proposal

contains provisions concerning the status and activities of Sveriges Riksbank (the “Bank”).

3.

The  ECB  notes  the  connection  to  the  previous  legislative  report  entitled  “The  status  of  the

Riksbank” (“Lagrådsremiss - Riksbankens ställning”) which was submitted to the EMI for an

opinion  in  October  1997,  and  a  reference  is  made  to  the  EMI’s  opinion  in  the  matter

(CON/97/26) dated 7 November 1997 (the “Opinion”).

4.

In view of the relatively extensive Opinion already provided by the EMI regarding the status of

the  Bank,  and  the  purpose  of  the  present  legislative  proposal  to  review  the  Riksbank  Act

(“lagen  (1988  :  1385)  om  Sveriges  riksbank”)  (the  “Act”)  in  order  to  improve  inter  alia  its

disposition, the ECB will at this instance limit its comments to certain substantive elements of

the legislative proposal.

5.

The ECB notes that the references in the Act to “credit institutions” (“kreditinstitut”) are now

proposed to be replaced by references to “financial institutions” (“finansinstitut”) in the revised

- 2 -

legislative  proposal 

(as  opposed 

to  “monetary 

financial 

institutions” 

(“monetära

finansinstitut”), which latter terminology was suggested in the former version submitted to the

EMI).  It  is  assumed  that  the  chosen  term,  “financial  institutions”,  will  provide  the  requisite

scope and clarity for the purposes of the Act. 

6.

The  ECB  also  notes  and  welcomes  the  requirement  that  the  Bank  obtains  adequate  collateral

(“betryggande säkerhet”) in respect of credit operations for monetary policy purposes (Section

5 of Chapter 6 of the legislative proposal) and intra-day credit for payment systems  purposes

(Section  7  of  Chapter  6  of  the  legislative  proposal),  in  compliance  with  the  Statute  of  the

European  System  of  Central  Banks  and  of  the  European  Central  Bank  (the  “ESCB  Statute”)

(cf Article 18 of the ESCB Statute).

7.

Moreover,  the  proposed  amendments  in  relation  to  credit  operations  and  repurchase

transactions  for  monetary  policy  purposes  contained  in  Chapter  6  of  the  legislative  proposal

will facilitate the future integration of the Bank into the European System of Central Banks (the

“ESCB”).  In  particular,  the  legislative  proposal  will  enable  the  Bank  to  carry  out  both

repurchase  transactions  and  credit  operations  with  counterparties  in  accordance  with  the

monetary policy framework developed by the EMI.

8.

Finally,  the  ECB  notes  Section  8  of  Chapter  6  of  the  revised  Act,  whereby  the  Bank,  under

certain extraordinary circumstances, may provide credit or guarantees on special terms in order

to  support  the  liquidity  of  banks  and  Swedish  entities  under  supervision  by  the  Swedish

Financial Supervisory Authority. Such a legal provision concerning a function for the Bank as

lender  of  last  resort  might  need  to  be  reviewed  again  before  Sweden’s  participation  in  EMU

and  the  Bank’s  integration  into  the  ESCB  in  order  to  make  it  subject  to  the  requirements

derived from the Bank’s full participation in the ESCB (cf also the EMI’s previous Opinion on

the topic of integration of the Bank into the ESCB).

9.

The ECB has no objection to this opinion being made public.

10 June 1998