Opinion of the European Central Bank of 25 May 2001 at the request of the Austrian Ministry of Finance on a draft Article of the Federal law establishing and organising the financial market supervisory authority and amending the laws relating to banking, securities supervision, investment funds, equities funds, savings banks, building societies, mortgage banks, mortgage bonds, the IAPL, the stock exchange (1989), insurance supervision, motor vehicle third party liability insurance (1994), pension funds, capital markets, the Commercial Code, companies limited by shares, limited liability companies and the National Bank (1984) (Finanzmarktaufsichtgesetz  FMAG) (CON/2001/10)
Date: 2001-05-25
Institutions: European Central Bank
Subjects: Austria, Eurosystem, banking supervision, central bank, euro area, exchange of information, financial stability, financial supervision, payment system

EN

OPINION OF THE EUROPEAN CENTRAL BANK

of 25 May 2001

at the request of the Austrian Ministry of Finance on a draft Article of the Federal law

establishing and organising the financial market supervisory authority and amending the laws

relating to banking, securities supervision, investment funds, equities funds, savings banks,

building societies, mortgage banks, mortgage bonds, the IAPL, the stock exchange (1989),

insurance supervision, motor vehicle third party liability insurance (1994), pension funds,

capital markets, the Commercial Code, companies limited by shares, limited liability companies

and the National Bank (1984) (Finanzmarktaufsichtgesetz – FMAG)

(CON/2001/10)

1.

On  19  April  2001  the  European  Central  Bank  (ECB)  received  a  request  from  the  Austrian

Federal Ministry of Finance for an opinion on a draft Federal law establishing and organising

the financial market supervisory authority and amending the laws relating to banking, securities

supervision,  investment  funds,  equities  funds,  savings  banks,  building  societies,  mortgage

banks,  mortgage  bonds,  the  IAPL,  the  stock  exchange  (1989),  insurance  supervision,  motor

vehicle  third  party  liability  insurance  (1994),  pension  funds,  capital  markets,  the  Commercial

Code,  companies  limited  by  shares,  limited  liability  companies  and  the  National  Bank  (1984)

(Finanzmarktaufsichtgesetz – FMAG). The intention of this  draft  Law is the reorganisation  of

prudential supervision in Austria and the grant to the Oesterreichische Nationalbank (OeNB) of

the oversight function of payment systems (hereinafter referred to as the “draft Law”).

2. 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article 105(4)  of  the  Treaty

establishing  the  European  Community  (hereinafter  referred  to  as  the  “Treaty”),  Article  3.1  of

the  Statute  of  the  European  System  of  Central  Banks  and  of  the  European  Central  Bank

(hereinafter referred to as the  Statute), and the third, fifth and  sixth  indents  of  Article 2(1)  of

Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank

by  national  authorities  regarding  draft  legislative  provisions1,  as  the  draft  Law  contains

provisions concerning a national central bank, payment and settlement systems as well as rules

applicable  to  financial  institutions  which  could  materially  influence  the  stability  of  financial

1

OJ L 189, 3.7.1998, p. 42.

                                                          
institutions  and  markets.  In  accordance  with the first sentence  of  Article  17.5  of  the  Rules  of

Procedure  of  the  European  Central  Bank,  this  opinion  has  been  adopted  by  the  Governing

Council of the ECB.

3. 

One aim of the draft Law is to concentrate the capacities of those authorities which are currently

involved in Austria in the various fields of supervision, namely the Federal Ministry of Finance,

the  securities  supervisory  authority  and  the  OeNB,  in  a  newly  established  authority,  the

“Finanzmarktaufsichtsbehörde” (FMA), which is not bound by instructions. The FMA will be

established as a public law entity with legal personality and will, as a global-finance supervisory

authority,  be  competent  for  banking,  insurance,  securities  and  pension  funds  supervision.  The

Federal Ministry of Finance will be entrusted with supervision of the overall fulfilment of the

legal obligations of the FMA. The FMA will be funded by the supervised entities themselves as

well  as  by  an  annual  contribution  of  the  federal  government.  The  official  explanatory

memorandum  accompanying  the  draft  Law  argues  that  the  establishment  of  a  stand-alone

financial regulatory agency in Austria inter alia pursues the objectives of ensuring operational

independence of the regulatory agency and regulatory flexibility. The operational independence

and  freedom  from  instruction  of  the  FMA  corresponds  fully  to  Principle  1  of  the  “Core

principles for effective banking supervision” of the Basel Committee on Banking Supervision.

4. 

As  a  general  observation,  the  ECB  notes  that  the  role  of  the  OeNB  in  the  field  of  prudential

supervision will diminish as a result of the adoption of the draft  Law. This  contrasts  with the

position  expressed  by  the  ECB  in  the  note  on  “The  role  of  central  banks  in  prudential

supervision”2.  The  ECB  considers  that  maintaining  a  close  involvement  of  national  central

banks in prudential supervision is a condition necessary to allow the Eurosystem to contribute

adequately  to  monitoring  the  risks  to  financial  stability  in  the  euro  area.  This  is  of  particular

importance  in  a  context  in  which  the  nature  and  scope  of  these  risks  are  affected  by  the

introduction  of  the  single  currency  and  the  consequent  enhanced  integration  of  financial

markets.  In  addition,  it  safeguards  the  smooth  coordination  between  the  central  banking

functions  exercised  at  the  Eurosystem  level  and  the  supervisory  functions  carried  out  at  the

national  level.  In  the  ECB’s  opinion,  the  objective  of  achieving  more  effective  coordination

between  the  conduct  of  supervisory  functions  in  all  segments  of  financial  activity  could  be

pursued also with means that  do  not imply  a  reduced  role  of the  central  bank  in this field.  In

support of a continued and even reinforced involvement of the OeNB in prudential supervision,

it may be argued that also the Treaty contains a provision relying on the central bank to address

supervisory issues which may arise in increasingly integrated financial markets. In fact, Article

105(6) of the Treaty envisages a simplified procedure to confer upon the ECB specific tasks in

the  context  of  supervision  of  credit  institutions  and  other  financial  institutions  with  the

exception of insurance firms. Furthermore, Article 105(5) of the Treaty entrusts the Eurosystem

2

Published on the ECB’s website (http://www.ecb.int); see the ECB press release of 22.3.2001.

2

                                                          
with  the  task  of  contributing  to  the  smooth  conduct  of  policies  pursued  by  the  competent

authorities  relating  to  prudential  supervision  of  credit  institutions  and  the  stability  of  the

financial system. A reduced role of the OeNB in prudential supervision could  generally  make

compliance with the obligations arising from this provision more difficult. In the opinion of the

ECB,  the  draft  law  does  not  provide  sufficient  safeguards  for  the  OeNB  to  assume  its  full

responsibilities  in  the  context  of  the  prudential  functions  which  the  Eurosystem  has  been

entrusted with in the interest of financial system stability and soundness.

5. 

The ECB notes, moreover, that the draft Law also intends to maintain some of the advantages

stemming  from  the  institutional  framework  in  place, including  the  current  involvement  of  the

OeNB in prudential supervision – with the fundamental and objectively unfounded exception of

limiting  on-site  inspections  to  market  risk  (see  paragraph  9  below).  Such  involvement,

according to the explanatory memorandum, should be supported regardless of the organisational

form chosen for the attribution of supervisory responsibilities. This, in practice, is reflected in

the provisions of the draft Law concerning inter alia the procedures for the nomination of the

members  of  the  FMA's  executive  board  (Vorstand)  and  supervisory  board  (Aufsichtsrat),  the

composition  of  the  FMA's  advisory  board  (Beirat),  the  composition  of  the  Financial  Market

Committee  (Finanzmarktkomitee),  the  possible  operational  involvement  of  the  OeNB  in

supervisory  tasks,  the  institutional  exchange  of  information  between  the  two  bodies,  and  the

consultative role of the OeNB vis-à-vis the FMA and the Federal Minister of Finance. 

6. 

Against this background, the ECB believes that improvements in the draft legislative provisions

in defining the role of the OeNB with regard to financial stability and the conduct of prudential

supervision  tasks  are  required.  This  would  comply  with  the  meaning  and  intention  of  the

relevant provisions of the Treaty establishing the European Community.

7. 

First, the specific role of the OeNB in financial stability and prudential supervision. The draft

Law  should  make  it  clear  that  the  OeNB  has  responsibility  for  the  overall  stability  of  the

financial  system  as  a  whole,  as  a  separate  function  from  hands-on  supervision  and  financial

regulation.  The  express  attribution  of  such  a  role  seems  particularly  useful,  given  the  formal

attribution of the responsibility for prudential supervision of individual institutions to the FMA.

This  would  prove  beneficial  to  the  institutional  framework  being  proposed  in  the  draft  Law.

Central banks are in general in an advantageous position to fulfil the responsibility for financial

stability, given their insight into money and financial market developments and involvement in

payment systems and monetary policy operations. This is both on an ongoing basis and in crisis

management  situations.  In  this  context, the  ECB  welcomes  the  establishment  of  the  Financial

Market  Committee  as  a  body  fostering  cooperation  and  information  sharing  among  the

authorities jointly responsible for financial market stability. Moreover, in view of its financial

stability role, the OeNB should be expressly assigned the task of contributing to the conduct of

prudential supervision of financial intermediaries, in close cooperation with the FMA. 

3

8. 

Secondly, while the draft Law responds in various ways to the need to bridge the supervisory

and the central banking functions, the ECB considers that it could be useful to insert in the draft

Law  the  basic  principle  that  a  smooth  interaction  between  the  FMA  and  the  OeNB  warrants

close  cooperation  between  them  in  all  fields  of  common  interest.  This  principle,  which  is  for

instance  reflected  in  the  draft  provisions  for  Articles  79  and  80  of  the  Banking  Act

(Bankwesengesetz)  contained  in  Section  II  of  the  draft  Law,  should  be  further  reflected  in  a

general provision stipulating a duty of cooperation, whose ultimate purpose would be to have in

place effective and practical arrangements for cooperation and information sharing between the

FMA and the OeNB. Such a provision could go beyond the proposed provisions in Article 1 of

the draft Law concerning Article 21(2) of the Financial Market Law.

9. 

Thirdly,  it  follows  that  the  issue  of  access  to  information  and  information  sharing  in  general

could be further specified in the draft Law than as provided in the amendments to Articles 79

and 80 of the Banking Act contained  in  Section  II  of  the  draft  Law.  In  this  context,  the  ECB

notes first that in Article 43 of the National Bank Act, as in Article 77 of the Banking Act and in

the provisions proposed in Article II of the draft Law concerning Article 21(2) of the Financial

Market Law, there are indeed provisions in this regard. The ECB would however welcome for

the  following  reasons  further  clarification  of  the  access  to  information  and  information

exchange. In particular, the exchange of information would not be dependent on the occurrence

of  specific  events,  as  currently  foreseen  in  these  draft  provisions,  but  would  occur  on  an  on-

going  basis,  which  would  imply  regular  flows  of  information.  Furthermore,  the  ECB  would

welcome  the  express  removal  of  possible  legal  obstacles  to  information  sharing  between  the

FMA  and  the  OeNB.  The  relevant  provisions  of  the  “post-BCCI  Directive”3,  which  were

incorporated  in  all  sectoral  directives,  stipulate  that  information  subject  to  confidentiality  and

professional  secrecy  requirements  may  be  shared  between  supervisory  authorities  and  central

banks, and vice versa, for the purposes of the exercise of their respective tasks. In view of the

fact that the draft Law will establish a new supervisory authority, the ECB would welcome the

express inclusion of such a principle both in the Law establishing the FMA and in  the  OeNB

Act.  Central  banking  is  a  valuable  input  to  the  supervisory  process,  while  access  by  central

banks to supervisory resources benefits the conduct of monetary policy operations, the oversight

of payment systems and the pursuance  of  financial stability.  It  may  be  noted that  information

sharing may entail a cross-border dimension, since information concerning Eurosystem-related

tasks might need to be conveyed to other national central banks of the Eurosystem and the ECB.

A  provision  reflecting  this  aspect  would  be  welcome.  This  suggestion  is  in  line  with  the

recommendations  put  forward  by  the  recent  Economic  and  Financial  Committee's  "Report  on

3

Article  4  of  the  European  Parliament  and  Council  Directive  95/26/EC  of  29  June  1995  amending  Directives
77/780/EEC and 89/646/EEC in the field of credit institutions, Directives 73/239/EEC and 92/49/EEC in the field of
non-life insurance, Directives 79/267/EEC and 92/96/EEC in the field of life assurance, Directive 93/22/EEC in the
field  of  investment  firms  and  Directive  85/611/EEC  in  the  field  of  undertakings  for  collective  investment  in
transferable securities (Ucits), with a view to reinforcing prudential supervision, OJ L 168 , 18.7.1995 p. 7.

4

                                                          
financial crisis management"4, to remove any legal impediments to the cross-border exchange

of  information  among  supervisors  and  central  banks  on  a  cross-border  basis.  With  regard  to

access to information from financial institutions, the ECB welcomes the proposed amendments

to  Article  22e  and  Article  26  of  the  Banking  Act  contained  in  Section  II  of  the  draft  Law,

stipulating that the OeNB will remain a recipient of information from reporting institutions. In

the same manner, Article 79(2) and (3) of the Banking Act are also welcome, since they foresee

that both the FMA and the OeNB will be able to access the reports which each of them receives

from credit institutions.  In  line  with the foregoing  given  the  enhanced  integration  of financial

services, access to supervisory information by the OeNB should not be limited to information

on  the banking  sector but  should  also  include  the  other  sectors  of  the  financial  system  which

may be deemed relevant for the stability of the financial system. The central bank should have

the means to assess possible systemic implications of the behaviour of complex financial groups

on  money  and  capital  markets as  well as  on payment  and  settlement  systems.  This  would  for

instance  also  be  in  line  with  the  European  Commission's  recent  proposal  for  a  Community

directive  on  the  supervision  of  financial  conglomerates5,  which  purports  to  lift  the  legal

obstacles for supervisory information sharing with central banks. 

10.  Fourthly, the operational involvement of the OeNB in prudential supervision. The involvement

of the OeNB in on-site inspections is substantially reduced by the draft Law as a consequence of

the full attribution of supervisory responsibilities to the FMA. The on-site examination powers

will be limited to the examination of market risks under the proposed amendments to Article 70

of the Banking Act contained in Section II of the draft Law. The possibility remains, under the

proposed amendments to Articles 26b, 27 and 70 of the Banking Act, that the FMA may request

the  OeNB  to  carry  out  inspections  in  respect  of  market  risks.  This  is  conditional,  under  draft

Article  70  of  the  Banking  Act,  on  the  process  being  substantially  streamlined  or  being  made

more expeditious or being in the interests of expediency, simplicity, speed or cost-saving. The

ECB  would  like  to  note  that,  in  line  with  the  intention  of  the  draft  Law,  the  operational

involvement of the OeNB might represent a considerable advantage to the activities of the FMA

in  view  of  the  experience  and  expertise  of  the  central  bank  as  well  as  of  the  central  bank's

infrastructure.  The  possibility  of  the  involvement  of  the  OeNB  seems  however  to  be  very

restricted by the provisions of the draft Law. On the one hand, such involvement may well go

beyond the mere  assessment  of  market  risks  and  could include full  on-site  examination  tasks.

On  the  other  hand,  the  conditions  set  for  the  FMA  to  have  recourse  to  the  OeNB  could  be

drafted in a broader manner so that the contribution of the central bank would not be envisaged

as  an  exceptional  procedure.  In  addition,  it  is  to  be  recalled  that  market  and  credit  risk  are

4

5

The Economic and Financial Committee’s “Report on financial crisis management”, 17.4.2001, EFC/ECFIN/251/01-
en-Final.
Article  9(1)  of  the  proposal  for  a  directive  of  the  European  Parliament  and  of  the  Council  on  the  supplementary
supervision  of  credit  institutions,  insurance  undertakings  and  investment  firms  in  a  financial  conglomerate  and
amending  Council  Directives  73/239/EEC,  79/267/EEC,  92/49/EEC,  92/96/EEC,  93/6/EEC  and  93/22/EEC,  and
Directives 98/78/EC and 2000/12/EC of the European Parliament and the Council, COM (2001) 213 final.

5

                                                          
related in many respects. Hence, the specific exchange rate risk does indeed form part of market

risk, but it is also an indication of creditworthiness of current issuers in close connection with

solvency  provisions.  It  should  also  be  borne  in  mind  that  the  methods  of  measurement  and

management  of  credit  and  market  risks  are  continuously  growing  closer.  The  ECB  therefore

considers it to be desirable for the draft Law to create the legal basis to confer on the OeNB not

only  the  procedural  limitation  of  market  risk  but  –  in  any  event  –  also  credit  risk.  This  is

particularly  significant  since  provision  for  the  participation  of  the  OeNB  in  the  inspection  of

credit  risk  impairs  the  contributions  of  the  OeNB  to  new  activities  arising  from  the  current

reworking of the Basle Capital Accord and the EU provisions on capital adequacy.

11.  Fifthly, the ECB welcomes the proposed Article 80(2) of the Banking Act contained in Section

II of the draft Law, which provides the OeNB with the right to be consulted by the FMA and the

Federal  Minister  of  Finance  on  legal  acts  issued  under  the  Banking  Act.  The  ECB  would

suggest that, in view of its financial stability role, the OeNB be provided with an advisory role

for  all  national  legislation  falling  within  such  field  of  competence,  without  any  restriction  to

legal  acts  in  the  banking  field.  The  ECB  refers  in  this  context  to  the  special  meaning  of

Article 7(3)  of  the  National  Bank  Act  according  to  which  the  OeNB  has  the  right  to  be

consulted  on  all  drafts  with  political  implications  for  the  financial  market  or  otherwise  the

interests of the OeNB.

12.  The ECB would welcome the inclusion in the draft Law of a provision stipulating that the FMA

will respect all pre-existing commitments to cooperate and share information undertaken by the

Federal  Minister  of  Finance  in  its  capacity  as  former  supervisory  authority  vis-à-vis  other

supervisory authorities and central banks of the EU Member States.

13.  The  ECB  welcomes  the  provisions  directed  at  enhancing  and  reinforcing  the  supervisory

framework for credit institutions. In particular the ECB welcomes the proposed provisions for

the Banking Act allowing for the possibility of the FMA to inform the public about the licence

status  and  about  supervisory  measures  that  are  taken  vis-à-vis  an  institution  (proposed

amendments in Section II of the draft Law to Article 4, new paragraph 7 and Article 70, new

paragraph  7),  the  strengthening  of  the  credit  institutions'  advisory  boards  (Aufsichtsräte)

(proposed  new  Article  63a  of  the  Banking  Act),  and  the  rotation  principle  of  bank  auditors

(proposed amendments to Article 62 of the Banking Act), according to which auditors of banks

must  be  changed  after  a  certain  number  of  years  in  order  to  ensure  their  impartiality  and

independence.

14. 

In addition to the issues described above, the draft Law proposes changes to the National Bank

Act  dealing  with  payments  systems  oversight.  According  to  these  draft  provisions,  the  OeNB

will be the competent authority in Austria for the oversight of payment systems. Section XIX of

the draft Law (proposed new Article 44a(1) of the National Bank Act) provides that the OeNB

will be competent to oversee (i) payment systems to which Austrian law applies; (ii) participants

6

in payment systems which are located in Austria and to which Austrian laws applies; and (iii)

participants in payment systems which are located in Austria, which are not subject to Austrian

law.  Section  XIX  of  the  draft  Law  (proposed  new  Article  44a(5)  of  the  National  Bank  Act)

provides  that  the  OeNB  will  be  competent  to  make  regulations  in  order  to  implement  any

relevant  recommendations  of  the  Committee  on  Payment  and  Settlement  Systems  (CPSS).  In

the fulfilment of its tasks as  overseer  of  payments  systems,  the  OeNB  will also  be entitled  to

request information concerning payment systems, to carry out on-site inspections (either in its

own  name  or  via  the  FMA),  and  to  impose  sanctions  in  cases  of  non-compliance  with  its

regulations.

15. 

In  this  context,  the  ECB  would  like  to  state  first  of  all  that  payment  systems  oversight  is  an

essential function of central banks. The aim of the oversight of clearing and payment systems is

the maintenance of systemic stability, the promotion of efficiency and the safeguarding of the

transmission channel for monetary policy. These concerns are material to both the confidence of

the users of the payment systems and of the users of the payment instruments and, ultimately, to
the  maintenance  of  public  confidence  in  the  currency.  Article  105(2)6  of  the  Treaty  and
Article 3.17  of  the  Statute  provide  for  the  legal  basis  for  the  oversight  activities  of  the

Eurosystem.  In  addition,  the  competence  of  the  Eurosystem  for the system’s  oversight  results

from  Article  22  of  the  Statute,  which  provides:  “The  ECB  and  national  central  banks  may

provide facilities, and the ECB may  make regulations8,  to  ensure efficient  and  sound  clearing

and payment systems within the Community and with other countries”. Within the Eurosystem,

the  Governing  Council  of  the  ECB  formulates  the  common  policy  stance,  determining  the

objectives and core principles of the common oversight policy of the Eurosystem. The national

central  banks  (NCBs)  and  the  ECB  are  responsible  for  the  implementation  of  the  common

policy stance and for the performance of the regular oversight activities over the systems under

their  respective  responsibility.  In  addition,  for  areas  not  specifically  covered  by  the  common

oversight  policy,  policies  defined  at  the  level  of  an  individual  NCB  apply  which  must  be

consistent with the objectives and principles defined at the level of the Eurosystem.

16.  Against  this  general  background,  the  ECB  welcomes  the  grant  by  law  to  the  OeNB  of  the

competence of payment systems oversight in Austria. This step enhances the transparency of the

central bank’s policies and is in line with the IMF’s Code of Good Practices on Transparency in

Monetary and Financial  Policies.  However, the  ECB  notes  that  Section  XIX  of the  draft  Law

(proposed new Article 44a(1) of the National Bank Act) seems to restrict the oversight function

of the OeNB to the protection of security of payment systems. Although this task is of primary

6

7

8

“The  basic  tasks  to  be  carried  out  through  the  ESCB  shall  be:  […]  to  promote  the  smooth  operation  of  payment
systems”.
“In accordance with Article 105(2) of the Treaty, the basic tasks to be carried out through the ESCB shall be: […] to
promote the smooth operation of payment systems”.
See  Article  34.2  of  the Statute:  “A  regulation  shall  have  general  application.  It  shall be  binding  in  its  entirety  and
directly applicable in all Member States”.

7

                                                          
importance  within  the  oversight  function,  it  is  only  one  aspect  of  a  broader  spectrum,  as

described above. Therefore, the ECB suggests replacing the proposed new Article 44a(1) of the

National Bank Act with a more general provision in line with the Treaty. It should provide that

the  OeNB  is  under  an  obligation  to  ensure  the  sound  and  efficient  operation  of  payment

systems, which includes the security of the payment instruments, within the framework of the

task of the European System of Central Banks (ESCB) relating to the promotion of the smooth

operation of payment systems as specified by Article 105(2) of the Treaty.

17.  According to Section XIX of the draft Law (proposed new Article 44a(1)1 of the National Bank

Act)  oversight  shall  be  applicable  “to  payment  systems  to  which  Austrian  laws  apply”.  The

ECB notes that for systems which have no clear domestic anchorage, the body entrusted with

oversight  responsibility  is  the  NCB  where  the  system  is  legally  incorporated,  unless  the

Governing Council of the ECB decides otherwise on the basis of the features of the system and

entrusts oversight responsibilities to the ECB. Obviously, this can also affect  systems  that are

established and operated on the basis of the laws of individual Member States. Therefore,  the

ECB suggests clarifying in the draft Law that the proposed new Article 44a(1)1 of the National

Bank Act does not interfere with any oversight function of the ECB that has been determined by

its Governing Council.

18.  The ECB notes that according to Section XIX of the draft Law (proposed new Article 44a(1)3

of  the  National  Bank  Act)  oversight  shall  be  exercised  with  regard  “to  the  participants  of

payment  systems  based  in  Austria,  which  are  not  subject  to  Austrian  law”.  The  ECB

understands that this provision applies to participants located in Austria who participate through

remote access in a payment system governed by foreign law and that those participants would

fall under Austrian oversight of payment systems. Clarification should be introduced in the draft

Law in this respect.

19.  The  ECB  would  also  like  to  comment  on  the  proposed  new  Article  44a(5)  contained  in

Section XIX of the draft Law as well as on the related section in the explanatory memorandum.

These provisions specify that OeNB is entitled by means of regulations to officially establish the

content of the recommendations made by the CPSS, which is an international standard setting

body with the function of elaborating recommendations for clearing and payment  transactions

and systems. 

On the basis of the Articles of the Treaty and of the Statute referred to in paragraph 15 above, in
conjunction with the first paragraph of Article 12.19 of the Statute, the Governing Council of the

ECB is the decision-making body responsible for the definition of the common policy stance of
the Eurosystem in the field of oversight. According to the third paragraph Article 12.110 of the

9

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“The Governing Council shall adopt the guidelines and take the decisions necessary to ensure the performance of the
tasks entrusted to the ESCB under this Treaty and this Statute”.
“To the extent deemed possible and appropriate and without prejudice to the provisions of this Article, the ECB shall
have recourse to the national central banks to carry out operations which form part of the tasks of the ESCB”.

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Statute, within the Eurosystem, the NCBs shall be available, and the ECB shall have recourse to

them  to  the  extent  deemed  possible  and  appropriate,  for  the  implementation  of  the  oversight

policy stance. Against this background, it will be in the first instance within the competence of

the Governing Council of the ECB to decide on any adoption and enforcement of the CPSS’s

recommendations  at  the  level  of  the  Eurosystem.  It  is  within  this  general  institutional

framework and the general appreciation pertaining to the Governing Council of the ECB that the

OeNB,  like  the  other  NCBs  within  the  Eurosystem,  may  implement  at  a  national  level  the

CPSS’s  recommendations.  Consequently  and  more  in  general,  the  ECB  would  appreciate

amendment of the proposed new Article 44a(5) contained in Section XIX  of the  draft  Law  to

make it clear that exercise of the regulatory power of the OeNB in the field of payment systems

oversight should be in line with the  common  policy  stance  that the  Governing  Council of the

ECB has adopted for the Eurosystem.

20.  The ECB welcomes the grant to the OeNB of a regulatory power in the field of payment system

oversight. It should, however, be recalled that any ECB regulation would supersede an OeNB

regulation adopted by virtue of the regulatory power conferred by the draft Law on the OeNB.

Although the ECB has not yet used the possibility provided by Article 22 of the Statute to adopt

regulations  to  ensure efficient  and  sound  clearing  and payment  systems,  as  pointed  out in the

explanatory memorandum to the draft Law, it should be noted that the Governing Council of the

ECB  can  always  take  an  initiative,  where  necessary.  The  ECB  would  therefore  appreciate

amendment  of  the  explanatory  memorandum  to  the  draft  Law  to  avoid  the  impression  of

impairing the competencies of the ECB in this field. 

21.  The  proposed  new  Article  44a(6)  contained  in  Section  XIX  of  the  draft  Law  stipulates  that

“upon  agreement  with  the  FMA,  on-site  inspections  can  also  be  carried  out  by  the  auditing

divisions of the FMA, on behalf of and at the expense of the Oesterreichische Nationalbank.”

The  ECB  understands  that  for  the  tasks  performed  under  this  provision,  and  whenever  the

OeNB makes recourse to the FMA in the performance of its oversight functions, the personnel

of the FMA will be accountable to the OeNB only and not be bound by instructions from the

FMA or any other third party. 

22.  According to the new draft Article 69 of the Banking Act contained in Section II  of  the  draft

Law,  the  oversight  of  securities  settlement  systems  (SSSs),  currently  a  competence  of  the

Federal Ministry of Finance, will be transferred to the FMA. In this respect, it should be recalled

that the smooth operation of securities settlement systems is crucial for the smooth functioning

of  payment  systems.  It  has  been  recognised  by  international  fora  such  as  the  Wise  Men

Committee,  the  CPSS  and  IOSCO  that  the  oversight  of  securities  settlement  systems  also

require  the  expertise  of  the  central  bank,  due  to  the  interdependency  between  the  payment

systems and the securities settlement systems. Consequently, the OeNB could also be involved

in  the  oversight  of  securities  settlement  systems.  In  addition,  as  also  stated  in  the

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recommendation being finalised by the CPSS-IOSCO Joint Task Force on Securities Settlement

Systems  of  the  G10  States  (CPSS-IOSCO  Recommendation  18),  SSSs  should  be  subject  to

regulation  and  oversight.  In  particular,  the  responsibilities  and  objectives  of  the  securities

regulator and the central bank with respect to SSSs should be clearly defined, and their roles and

major  policies  should  be  publicly  disclosed.  In  addition,  they  should  have  the  ability  and  the

resources to perform their responsibilities, including assessing and promoting implementation of

these recommendations. The ECB stresses the importance of compliance by the draft Law with

the principles of the abovementioned CPSS-IOSCO Recommendation 18.

Done at Frankfurt am Main on 25 May 2001.

The President of the ECB

[signed]

Willem F. DUISENBERG

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