Opinion of the European Central Bank of 5 June 2002 at the request of the Irish Department of Finance on a draft Central Bank and Financial Services Authority of Ireland Bill, 2002 (CON/2002/16)
Date: 2002-06-05
Institutions: European Central Bank
Subjects: Ireland, central bank, financial stability, financial supervision, institutional reform, national law

OPINION OF THE EUROPEAN CENTRAL BANK

of 5 June 2002

at the request of the Irish Department of Finance on a draft Central Bank and Financial

Services Authority of Ireland Bill, 2002 

(CON/2002/16)

1. 

On  16  April  2002  the  European  Central  Bank  (ECB)  received  a  request  from  the  Irish

Department of Finance for an opinion on a draft Central Bank and Financial Services Authority

of Ireland Bill, 2002.

2. 

The  ECB’s  competence  to  deliver  an  opinion  is  based  on  Article 2  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  legislative  proposal  contains

provisions concerning a national central bank and rules which materially influence the stability

of  financial  institutions.  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. 

The legislative proposal contains four noteworthy elements. First, the Central Bank of Ireland

would  be  reorganised  and  re-named  as  the  Central  Bank  and  Financial  Services  Authority  of

Ireland, which would be the legal entity that would qualify as the central bank of Ireland and be

a  member  of  the  European  System  of  Central  Banks.  Second,  a  new  ‘body’  called  the  Irish

Financial Services Regulatory Authority (the ‘Regulatory Authority’) would be established as a

constituent  part  of  the  central  bank  with  responsibility  for  the  supervision  of  virtually  all

financial  institutions  and  insurance  undertakings  in  Ireland,  as  well  as  the  protection  of

consumers of financial services. Third, while the decision-making body within the central bank

for  ESCB-related  functions  would  continue  to  be  solely  the  Governor,  the  draft  legislation

provides for the possible establishment of a committee of the central bank’s Board of Directors

called  the  ‘Monetary  Committee  of  the  Board’  (or  a  similar  name)  to  which  the  Governor,

subject to the requirements of the Treaty establishing the European Community and the ESCB

Statute,  would  be  required  to  provide  information  about,  and  with  the  members  of  which  the

Governor  may  discuss,  the  performance  by  the  Governor  of  the  central  bank’s  ESCB-related

functions. Fourth, the central bank’s residual functions, including the co-ordination of activities

of the constituent parts of the central bank and the exchange of information among those parts,

1 

OJ L 189, 3.7.1998, p. 42.

                                                          
would  be  vested  in  a  reconstituted  board  of  directors,  whose  12  members  would  include  the

Governor  as  Chairperson,  six  members  drawn  from  the  Regulatory  Authority  (including  the

Chairperson and Chief Executive of the Regulatory Authority and four members appointed by

the Minister for Finance after consulting the Minister for Enterprise, Trade and Employment),

the Secretary General of the Department of Finance, the Director General of the central bank

and three other directors appointed by the Minister for Finance. 

4. 

The legislative proposal would establish the Regulatory Authority as an autonomous authority

that  will  perform  the  financial  supervision  functions  previously  attributed  to  the  central  bank

and  other  residual  functions  relating  to  the  supervision  of  the  Irish  financial  sector  and  of

financial  intermediaries  in  particular.  The  ECB  welcomes  the  fact  that  the  new  supervisory

authority will remain a constituent part of the central bank. While the ECB’s overall assessment

of the structure is therefore positive, the ECB has a number of detailed, technical reservations

regarding  the  draft  legislation  which  are  set  forth  in  this  opinion.  These  reservations  are

primarily designed to eliminate any legal risks associated with the independent discharge of the

central  bank’s  ESCB-related  tasks.  The  ECB  believes  that  these  reservations  can  be

accommodated  without  disturbing  the  overall  integrity  of  the  Regulatory  Authority  as  an

autonomous  supervisory  authority  operating  within  the  legal  structure  of  the  central  bank  of

Ireland.

5. 

In view of the somewhat complex corporate governance structure for the central bank that the

establishment  of  the  Regulatory  Authority  entails,  the  ECB  is  concerned  that  the  governance

structure  of  the  central  bank  might  not  allow  for  an  effective  contribution  of  central  banking

functions to prudential supervision tasks, which will be conducted in an independent manner by

the Regulatory Authority, or indeed that the pursuance of supervisory tasks might prevail over

the central banking perspective. In this regard, the ECB welcomes the series of provisions that

should safeguard the contribution of central banking functions. First, the central bank has the

function  of  contributing  to  the  stability  of  the  financial  system.  In  addition,  the  pursuance  of

this objective would also be taken into due consideration by the central bank in promoting the

development  of  the  financial  services  industry.  Second,  the  Regulatory  Authority  has  the

obligation  to  consult  and  obtain  the  approval  of  the  Governor  over  matters  relating  to  the

stability of the financial system, including the issue, revocation and suspension of a licence or

authorisation. In this regard, the Governor, in addition to the Chief Executive of the Regulatory

Authority,  enjoys  crucial  powers  to  authorise  central  bank  employees  to  investigate  the

business and carry out  on-site  inspections  of  financial  institutions.  Third,  the  future  Board  of

the  central  bank  is  established  as  the  main  forum  that  will  allow  close  co-operation  between

central banking and supervisory functions within the central bank. Fourth, the Governor or the

Board of the central bank may issue guidelines to the Regulatory Authority as to the principles

and policies that the Regulatory Authority is required  to  implement  in  performing  the  central

bank’s  functions,  and  the  Regulatory  Authority  would  be  required  to  comply  with  such

guidelines.  Fifth,  upon  request  the  Regulatory  Authority  would  be  required  to  provide  the

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Governor with advice, information and assistance. All these provisions, in the view of the ECB,

are fundamental - and should be made the most of in practice – to allow for the continued close

involvement  of  the  central  banking  functions  in  supervision  matters,  as  is  currently  the  case

within the Central Bank of Ireland. Indeed, this involvement is a necessary condition to allow

the Eurosystem to contribute adequately to monitoring the risks to financial stability in the euro

area.  In  addition,  it  also  safeguards  a  smooth  co-ordination  between  the  central  banking

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

national level. An additional safeguard to ensure that supervisory tasks do not prevail over the

central  banking  perspective,  as  referred  to  below  with  regard  to  other  issues  raised  in  this

opinion, would be that the composition of the central bank’s Board would not be such that as

many as half of the Board directors would also be members of the Regulatory Authority.

6. 

The  legislation  would  establish  a  structure  that  is  unique  within  the  Eurosystem  for  the

regulation  and  supervision  of  financial  institutions  by  setting-up  a  statutory  body  enjoying

independent functions, but located within the legal personality of a national central bank. In this

regard, the ECB would like to make two general points. First, under Article 108 of the Treaty,

when  exercising  the  powers  and  carrying  out  the  tasks  and  duties  conferred  upon  it  by  the

Treaty and the ESCB Statute, neither a national central bank nor any member of its decision-

making  bodies  shall  seek  or  take  instructions  from,  inter  alia,  any  government  of  a  Member

State ‘or from any other body’, which would include a statutory body such as the Regulatory

Authority.  Having  particular  regard  to  the  unique  structure  of  the  Regulatory  Authority  as  a

constituent  part  of  the  central  bank,  the  ECB  considers  that  it  is  of  critical  importance,  as

required  by  Article  108  of  the  Treaty,  that  the  Regulatory  Authority  should  not  seek  to

influence  the  Governor,  in  his  capacity  as  the  sole  member  of  the  central  bank’s  decision-

making body responsible for the performance of the central bank’s ESCB tasks. Second, there

would be no precedent within the Eurosystem for a national central bank to be accountable or

liable for  acts  performed  by  a  constituent  part  of  the  central  bank  (the  Regulatory  Authority)

which would be outside the control of the central bank’s key decision-making body responsible

for the discharge of its ESCB-related tasks (the Governor). Such a structure could pose a risk to

a  national  central  bank’s  integrity,  threatening  its  overall  institutional  independence.  The

potential exposure of a national central bank to liabilities resulting from funding and budgetary

decisions  for  the  Regulatory  Authority  could  also  be  seen  as  a  threat  to  its  financial

independence.  In  addition,  the  Governor  would  not  have  autonomy  for  staffing  decisions  in

terms  similar  to  those  available  to  the  Regulatory  Authority.  In  order  to  eliminate  any  legal

risks associated with the independent discharge of the central bank’s ESCB-related tasks, one

of  the  following  two  options  could  be  followed.  First,  the  Governor  could  be  granted  an

explicit  right  to  oppose  any  funding,  budgetary  and  staffing  decisions  which  may  have

implications  for  the  central  bank’s  independence  or  which  may  be  deemed  otherwise

incompatible with the exercise by the Governor of the central bank’s ESCB-related functions.

Second,  all  funding,  budgetary  and  staffing  decisions  for  the  Regulatory  Authority  could  be

3

made by a restructured Board of Directors, removing the requirement that as many as half of

the Board directors would also be members of the Regulatory Authority. 

7.  With regard to funding, while the Regulatory Authority may be funded by levies and fees paid

by financial institutions subject to the Authority’s supervision, in the event that the funds raised

from such levies and fees prove insufficient the central bank’s board of directors may provide

funding to the Authority, following approval by the Minister for Finance of the amount of the

funds concerned and any conditions to the funding imposed by the central bank’s Board. The

draft legislation contains some safeguard provisions which are designed to ensure that this does

not  impede  the  proper  performance  of  the  central  bank’s  ESCB-related  tasks.  First,  the

Governor,  in  his  capacity  as  Chairperson  of  the  central  bank’s  Board  of  Directors,  has  a

platform  from  which  he  may  seek  to  protect  the  central  bank’s  independence  with  respect  to

any  decisions  of  the  central  bank’s  Board  and  the  Minister  for  Finance  to  provide  the

Regulatory  Authority  with  central  bank  funds.  In  practice,  however,  there  may  be  potential

within the central bank’s Board for a conflict of interest between the financial interests of the

Regulatory  Authority  and  the  independence  of  the  central  bank  in  view  of  the  particular

composition of the Board, a majority of whose 12 members would include six members of the

Regulatory  Authority,  including  the  Chairperson  and  Chief  Executive  of  the  Regulatory

Authority,  and  the  Secretary  General  of  the  Department  of  Finance,  whose  Minister  would

ultimately  be  responsible  for  the  approval  of  any  funds  provided  by  the  central  bank  to  the

Regulatory Authority. Second, the central bank has a legal obligation to perform its functions in

a  manner  consistent  with  the  Treaty  and  the  ESCB  Statute.  This  legal  obligation  would

necessarily apply to the directors when exercising their statutory responsibilities as members of

the  central  bank’s  Board  of  Directors.  While  the  legal  risks  posed  to  the  central  bank’s

independence  would  be  reduced  by  these  safeguards,  it  remains  unclear  from  a  legal

perspective whether the Governor would enjoy a sufficient degree of control over any decisions

by the central bank to fund the Regulatory Authority so as to be able to fully protect the central

bank’s institutional and financial independence. 

8.  With  regard  to  the  budget,  the  Regulatory  Authority  would  be  required  to  prepare  an  annual

statement  setting  out  estimates  of  its  income  and  expenditure,  and  the  Minister  for  Finance

would  be  empowered,  following  consultation  of  the  central  bank’s  Board,  to  approve  the

statement.  As  noted  in  the  1998  European  Monetary  Institute  (EMI)  Convergence  Report,

where third parties, and particularly the government, are in a position, directly or indirectly, to

exercise  influence  on  the  determination  of  a  national  central  bank’s  budget,  the  relevant

statutory provisions should contain a safeguard clause to ensure that this does not impede the

proper  performance  of  the  national  central  bank’s  ESCB-related  tasks.  Although  both  the

Minister  for  Finance  and  the  Regulatory  Authority  are  clearly  in  a  position,  directly  or

indirectly,  to  exercise  influence  on  the  determination  of  that  portion  of  the  central  bank’s

budget that relates to the Regulatory Authority, the relevant statutory provisions contain some

safeguard  clauses  which  are  designed  to  ensure  that  this  does  not  impede  the  proper

4

performance  of  the  central  bank’s  ESCB-related  tasks.  First,  in  the  case  of  the  Regulatory

Authority’s  budgetary  powers,  these  safeguards  include  (a)  a  required  consultation  of  the

Governor  of  the  estimates  insofar  as  they  affect  the  carrying  out  of  the  central  bank’s

obligations with respect to the Irish State’s financial stability or the performance of the central

bank’s ESCB-related functions; and (b) the Governor’s power, with respect to the exercise of

his  functions,  to  issue  guidelines  as  to  policies  and  principles  with  which  the  Regulatory

Authority  would  be  required  to  comply.  Second,  in  the  case  of  the  Minister  for  Finance’s

budgetary  powers,  these  safeguards  include  (a)  a  required  consultation  of  the  central  bank’s

Board, of which the Governor is Chairperson, before approving the estimates; and (b) a specific

legal obligation of the Minister to have regard to the central bank’s functions under the Treaty

and  the  ESCB  Statute,  which  are  exclusively  vested  in  the  Governor,  when  approving  the

estimates. While the legal risks posed to the central bank’s independence would be reduced by

these safeguards, it remains unclear from a legal perspective whether the Governor would enjoy

a sufficient degree of control over budgetary decisions taken by the Regulatory Authority and

the  Minister  for  Finance  so  as  to  be  able  to  fully  protect  the  central  bank’s  institutional  and

financial independence. 

9.  With  regard  to  staffing,  the  central  bank’s  Board  of  Directors  would  be  responsible  for

administering  the  staff  of  the  central  bank  and  its  constituent  parts  and  for  administering  the

provision of accommodation and office equipment with a view to enabling the central bank and

its  constituent  parts  to  perform  their  respective  functions.  However,  while  the  central  bank’s

Board  would  be  required  to  appoint  such  employees  of  the  central  bank  as  it  considers

necessary  for  the  effective  performance  of  the  functions  of  the  central  bank  and  each  of  its

constituent parts, the Regulatory Authority and its Chief Executive would have the same power

as the Board to appoint employees of the central bank. In fixing the conditions of employment

of such central bank employees appointed by the Chief Executive of the Regulatory Authority

the  central  bank’s  Board  would  be  required  to  obtain  the  concurrence  of  the  Regulatory

Authority or its Chief Executive. While the legal risks posed to the central bank’s operational

independence would be reduced by certain safeguards, such as the Governor’s power to issue

guidelines and the Regulatory Authority’s legal obligation to perform its functions in a way that

is consistent with the Treaty and the ESCB Statute, it remains unclear from a legal perspective

whether the Governor would enjoy a sufficient degree of control over staffing decisions taken

by the Regulatory Authority and its Chief Executive so as to be able to fully protect the central

bank’s  operational  independence.  This  risk  would  cease  to  exist  if  the  Governor  were  to  be

granted comparable staffing powers as the Regulatory Authority and its Chief Executive.

10.  The  ECB  considers  that  the  significant  role  that  the  Governor  would  have  with  respect  to

financial  stability  issues  eliminates  any  legal  risks  resulting  from  the  separation  between  the

decision-making  power  and  the  central  bank’s  legal  accountability  with  respect  to  those

decisions of the Regulatory Authority which have financial stability implications. However, the

ECB  notes  that  provision  is  made  for  the  appointment  within  the  Regulatory  Authority,  and

5

therefore as a constituent part of the central bank, of a Registrar of Credit Unions responsible

for the registration and supervision of credit unions. The Registrar would not be subject to the

control  or  direction  of  the  Regulatory  Authority.  While  the  Regulatory  Authority  would  be

required to issue guidelines to the Registrar with respect to consultation and co-operation with

the  Governor,  it  is  unclear  whether  the  Governor  would  enjoy  a  sufficient  degree  of  control

over  the  supervisory  decisions  of  the  autonomous  Registrar  in  order  to  protect  the  central

bank’s independence. The legislation should explicitly clarify that the supervisory decisions of

the Registrar of Credit Unions, as a constituent part of the central bank, would be subject to the

same degree of financial stability oversight by the Governor as is proposed for the Regulatory

Authority.

11.  The  draft  legislation  facilitates  the  possible  establishment  by  the  central  bank’s  Board  of

Directors  of  a  committee  of  the  Board  called  the  ‘Monetary  Committee  of  the  Board’  (or  a

similar  name)  consisting  of  those  Board  members  who  are  not  members  of  the  Regulatory

Authority,  to  whom  the  Governor,  subject  to  the  requirements  of  the  Treaty  and  the  ESCB

Statute,  would  be  required  to  provide  information  about,  and  with  whom  the  Governor  may

discuss, the performance of the central bank’s ESCB-related functions. In this regard, the ECB

takes  particular  note  that  the  draft  legislation  would  not  authorise  the  Board  to  delegate  any

function  that  must  be  performed  by  the  Governor.  Given  that  the  Governor’s  ESCB-related

tasks include monetary  policy,  one  might  question  whether  the  statutory  characterisation  of  a

board committee as a ‘Monetary Committee’ might create the misleading impression that such a

committee  enjoys  an  advisory  role  with  respect  to  the  performance  by  the  Governor  of  the

central  bank’s  monetary  policy  tasks.  The  ECB  would  therefore  like  to  express  its  clear

understanding that the members of such a ‘Monetary Committee’ would, in practice, enjoy no

role  with  respect  to  the  performance  of  the  central  bank’s  ESCB-related  functions.  As  is

clarified  in  the  EMI’s  1998  Convergence  Report,  dialogue  between  the  Governor,  in  his

capacity as the sole decision-making body of the central bank responsible for the performance

of the central bank’s ESCB-related tasks, and  the  members  of  such  a  ‘Monetary  Committee’,

even  when  based  on  such  statutory  obligations  to  provide  information  and  exchange  views,

would not be incompatible with the Treaty, provided that (a) this does not result in interference

with the independence of the Governor; (b) the ECB’s competences and accountability at the

Community  level  as  well  as  the  special  status  of  the  Governor  as  a  member  of  the  ECB’s

decision-making  bodies  are  respected;  and  (c)  confidentiality  requirements  resulting  from  the

ESCB Statute are respected. 

12.  As is currently the case, the Director General of the central bank would be required to carry out

the  responsibilities  of  the  Governor  for  the  performance  of  the  central  bank’s  ESCB-related

functions whenever the Governor is unable to carry out those responsibilities, while any one of

the central bank directors may be appointed to act as Governor to carry out the other non-ESCB

related responsibilities of the Governor. It is therefore necessary to explicitly clarify that where

the Governor is unable to carry out certain responsibilities which are vested in the Governor in

6

order  to  ensure  the  proper  performance  of  the  central  bank’s  ESCB-related  functions,  these

responsibilities  would  be  carried  out  by  the  Director  General,  in  his  capacity  as  the  central

bank’s  substitute  decision-making  body  for  the  performance  of  ESCB-related  tasks.  These

responsibilities include all of the Governor’s powers and functions in connection with (a) the

financial stability of the State’s financial system; (b) the issuance to the Regulatory Authority

of  guidelines  as  to  the  policies  and  principles  that  the  Authority  is  required  to  implement;

(c) decisions by the central bank to fund the Regulatory Authority; (d) the establishment of the

Regulatory Authority’s annual estimates of its income and expenditure; (e) requests for advice,

information and assistance from the Regulatory Authority; and (f) the Governor’s responsibility

to  ensure  that  the  resources  of  the  central  bank  allocated  for  carrying  out  the  central  bank’s

ESCB-related responsibilities are used effectively, efficiently and economically.

13.  The  ECB  notes  that  the  explicit  clarification  in  the  draft  legislation  of  the  Governor’s

responsibilities in connection with the holding and managing the foreign reserves held by the

central  bank  is  consistent  with  the  exclusive  vesting  of  the  central  bank’s  ESCB-related

functions  in  the  Governor,  since  the  basic  tasks  to  be  carried  out  through  the  ESCB  under

Article  105(2)  of  the  Treaty  include  the  holding  and  management  of  the  official  foreign

reserves of the Member States. In a similar manner, the ECB welcomes the  provisions  of  the

draft legislation whereby the Governor is responsible for promoting the efficient and effective

operation  of  payment  and  settlement  systems  as  reflecting  the  ESCB’s  related  function

regarding clearing and payment systems provided for in the Treaty and the Statute. Regarding

the identification in the draft legislation of the objectives of the central bank in performing its

ESCB  functions,  two  drafting  points  are  noted.  First,  under  Article  105(5)  of  the  Treaty  the

ESCB’s  required  contribution  to  the  stability  of  the  financial  system  does  not  contain  any

geographical connotations, and the specific reference to the stability of the ‘European’ financial

system should be amended accordingly. Second, under Article 105(1) of the Treaty the ESCB’s

objective of supporting the general economic policies in the Community is stated to be ‘without

prejudice to’ (rather than ‘without affecting’) the objective of price stability. These two drafting

points are adequately addressed in the existing wording of Section 6(2) and (6) of the Central

Bank Act, 1942, as amended.

14.  The  ECB  notes  that  the  list  of  enactments  and  regulations  under  which  the  Regulatory

Authority  is  to  perform  functions  of  the  central  bank  should  not  include  any  ESCB-related

functions  vested  in  the  Governor,  such  as  certain  of  the  functions  of  the  central  bank  under

(a) section  18  of  the  Central  Bank  Act,  1971,  as  amended,  which,  inter  alia,  facilitates  the

collection  by  the  ECB,  assisted  by  the  central  bank,  of  the  necessary  statistical  information

directly from economic agents in order to undertake the tasks of the ESCB, in accordance with

Article 5 of the ESCB Statute; and (b) Section 23 of the Central Bank Act, 1971, as amended,

which, inter alia, facilitates the application by the central bank of the ECB’s requirements that

credit institutions hold minimum reserves on accounts with the ECB and national central banks

in  pursuance  of  monetary  policy  objectives,  in  accordance  with  Article  19.1  of  the  ESCB

7

Statute.  It  is  recognised  that  the  Regulatory  Authority  must  be  able  to  exercise  the  central

bank’s functions under Section 18 in order to collect information and under Section 23 in order

to  apply  specified  ratios  for  purposes  of  the  exercise  of  the  Regulatory  Authority’s  own

functions. 

15.  The ECB notes the proposed repeal of section 7(1)(mm) of the Central Bank Act, 1942, under

which it is stated to be lawful for the central bank to transfer assets, income or liabilities to the

ECB where required under the ESCB Statute. This repeal should not affect the obligations of

the central bank under Chapter VI of the ESCB Statute regarding the financial provisions of the

ESCB.

16.  While the draft legislative proposal does not propose to repeal Section 11 of the Central Bank

Act,  1998,  pursuant  to  which  the  central  bank’s  accounts  may  be  audited  in  accordance  with

Article  27  of  the  ESCB  Statute,  the  proposed  repeal  of  the  related  Section  19  of  the  Central

Bank  Act,  1989  would  appear  to  have  rendered  Section  11  of  the  1998  Act  redundant.  It  is

therefore  suggested  that  a  new  section  be  inserted  in  the  provisions  of  the  draft  legislative

proposal  which  restate  Section  19  of  the  1989  Act  to  clarify  that  the  central  bank’s  accounts

may,  in  addition  to  being  audited  by  the  Comptroller  and  Auditor  General,  be  audited  by

independent external auditors recommended by the ECB in accordance with Article 27 of the

ESCB  Statute.  A  corresponding  revision  to  the  provisions  permitting  the  disclosure  of

information  concerning  matters  arising  in  connection  with  performance  of  the  central  bank’s

functions to such independent external auditors would also be necessary.

17.  Finally,  the  ECB  notes  that  the  draft  legislative  proposal  contains  a  good  deal  of  restatement

and reordering of existing Irish legislation relating to the central bank’s functions and powers.

While the ECB welcomes this partial consolidation of Ireland’s central bank statutes, and most

particularly the Central Bank Act, 1942, the ECB notes that the provisions of Irish law relating

to the basic structure of Ireland’s central bank and the performance of its ESCB-related tasks

would,  following  enactment  of  the  draft  legislative  proposal,  be  contained  in  a  number  of

different laws, including the draft legislative proposal, the surviving provisions of the original

Central Bank Act, 1942, a number of provisions in the Central Bank Acts, 1971 and 1989, the

surviving provisions of the Central Bank Act, 1998, a number  of  provisions  of  the  Economic

and Monetary Union Act, 1998 (as amended by the Finance Act, 2002), as well as a number of

additional  laws  concerning  currency  matters.  The  lack  of  a  consolidated  central  bank  statute

creates  a  structure  for  Ireland’s  central  bank  that  is  somewhat  lacking  in  transparency.  Legal

clarity  and  transparency  would  suggest  that  at  the  first  suitable  opportunity  the  Irish

Government  should  undertake  a  consolidation  exercise.  In  addition,  a  full  consolidation  of

Ireland’s  central  bank  statutes  would  greatly  assist  the  ECB  in  fulfilling  its  ongoing  task  of

responding to consultations from the Irish authorities on draft legislation within the ECB’s field

of competence, as well as of ensuring that Irish legislation, including the statutes of Ireland’s

central bank, are compatible with the Treaty and the ESCB Statute. In this regard it is noted that

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Ireland’s central bank statutes are the only central bank statutes in the Eurosystem which have

not been consolidated.

18.  The  ECB  would  appreciate  being  provided,  for  information  purposes,  with  any  amendments

affecting  any  of  the  issues  addressed  in  this  opinion.  In  addition,  the  ECB  stands  ready  to

provide further comments on the draft legislation prior to enactment by the Oireachtas.

Done at Frankfurt am Main on 5 June 2002.

The President of the ECB

[signed]

Willem F. DUISENBERG

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