Opinion of the European Central Bank of 28 March 2003 at the request of the Bank of Greece on amendments to the Statute of the Bank of Greece (CON/2003/4)
Date: 2003-03-28
Institutions: European Central Bank
Subjects: Greece, central bank, institutional reform, national law

EN

OPINION OF THE EUROPEAN CENTRAL BANK

of 28 March 2003

at the request of the Bank of Greece

on amendments to the Statute of the Bank of Greece

(CON/2003/4)

1.

On  26  February  2003,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Bank  of

Greece for an opinion on proposed amendments to its Statute. The Bank of Greece  informed  the

ECB  that  it  would  present  these  amendments  at  the  general  meeting  of  the  Bank  of  Greece’s

shareholders scheduled for 22 April 2003 and, following approval by such general meeting, to the

Greek Parliament for ratification.

2. 

In  accordance  with  the  second  indent  of  Article 105(4)  of  the  Treaty  establishing  the  European

Community and the second indent of Article 4(a) of the Statute of the European System of Central

Banks  and  of  the  European  Central  Bank  (ESCB  Statute)  and  the  third  indent  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  provisions,  the  ECB  is  competent  to  deliver  an

opinion since the provisions concern the Statute of the Bank of Greece. In accordance with the first

sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing

Council of the ECB has adopted this opinion.

3.  Most  of  the  proposed  amendments  concern  technical  modifications  to:  general  provisions

(Article 2), the General Council (Article 27), the Monetary Policy Council (Article 35A), accounts

and  statements  (Article  52),  monetary  policy  instruments  (Article  55D,  Article  56  No  4  and

Article 58)  and  the  withdrawal  of  banknotes  denominated  in  drachmae  (Article  68).  In  addition,

there  are  several  insertions  related  to  auditors  (Article  44)  and  the  business  of  the  bank  and

monetary policy instruments (Article 55 Nos 5 and 18, Article 55B, Article 56 Nos 3 and 5). Each

paragraph  below  will  describe  the  proposed  amendments,  explain  their  rationale  and  provide  for

the ECB’s views separately for each amendment. Additions to the Statute of the Bank of Greece

are underlined, whilst deletions are crossed out.

4.

Section (e) of Article 2 

It is proposed that this Article read as follows:

'The main tasks of the Bank of Greece shall be to:

[…]

e) 

promote and oversee the smooth operation and efficiency of payment systems and means of

payment,  as  well  as  of  trading,  settlement  or  clearing  systems  for  over-the-counter  (OTC)

transactions in securities and other financial instruments, in accordance with Article 55 no.

5 hereof;

[...]'

This amendment is mainly intended to establish, for reasons of legal certainty, the authority of the

Bank of Greece over means of payment. The ECB welcomes this clarification, which does not give

rise to any specific observations from the ESCB’s perspective.

5. 

Section (i) of Article 27

It is proposed that this Article read as follows:

'The General Council shall decide on the following matters:

[…]

i) 

matters connected  with  the  acquisition of immovable  property  required  for  the  business of

the Bank and the temporary acquisition and sale of similar property under Article 58 under

Articles 56 n° 3 and 58;

[…]'

This  amendment  is  intended  to  align  the  General  Council’s  authority  to  acquire  immovable
property  with  the  new  content  of  the  relevant  substantive  provisions  of  the  Statute1.  The  above

arrangement  is  a  matter  internal  to  the  Bank  of  Greece  and  does  not  give  rise  to  any  specific

observations from the ESCB’s perspective.

6.

Article 35A

It is proposed that this Article read as follows:

'The  Monetary  Policy  Council  shall  be  responsible  for  decisions  pertaining  to  monetary  policy

definition  and  implementation  and  to  the  conduct  of  exchange  rate  policy,  the  operation  and

efficiency of payment systems and means of payment and the issue of banknotes. These tasks shall

be exercised by virtue of Acts of the said Council. 

1

See paragraphs 13 and 16 of this opinion for Article 56 Nos 3 and 58, respectively.

2

                                                     
[…]'

This  amendment  is  intended  to  align  the  content  of  this  provision  with  that  of  Section  (e)  of

Article 2 (see paragraph 4 above). The ECB’s opinion applies here mutatis mutandis as well, i.e.

the ECB welcomes the clarification which does not give rise to any specific observations from the

ESCB’s  perspective.  To  avoid  misunderstanding,  and  as  already  noted  in  the  ECB’s  Opinion

CON/00/07 of  17  April  2000  on  previous amendments  to  the  Statute  of the  Bank  of  Greece, the

powers of the Monetary Policy Council of the Bank of Greece have to be read in conjunction with

Article 2 of the Statute of the Bank of Greece. This Article recognises expressly that such powers

have to be executed in the framework of and in accordance with the ESCB legal framework. 

7.

Article 44

It is proposed that this Article read as follows:

'The first General Meeting of Shareholders and, subsequently, the Annual General Meeting shall

elect  three  qualified  persons  and  two  substitutes  as  Auditors,  to  examine  and  report  upon  the

balance sheet of the Bank to be presented at the next Annual General Meeting, and shall determine

their fees. No Councillor or other officer of the Bank shall be eligible as Auditor during his term of

office.  Instead  of  the  above  natural  persons,  the  General  Meeting  may  elect  as  auditors  a

corporation or syndicate of Chartered Accountants.

[…]'

The new wording of the provision enables the Bank of Greece to appoint not only physical persons

registered as auditors but also auditing firms that are, for example, organised as public companies

limited  by  shares.  The  ECB  notes  that  this  does  not  rule  out  the  possibility,  for  reasons  of

convenience,  of  the  audit  provided  for  by  the  Statute  of  the  Bank  of  Greece  coinciding  with  the

audit  prescribed  by  the  Statute  of  the  ESCB.  The  ECB  welcomes  this  extension  of  the  Bank  of

Greece’s choice of auditors since it reflects current auditing practice.

8.

Article 52

It is proposed that this Article read as follows:

'The Bank shall draw up a statement of its assets and liabilities as at the 15th and last day of each

month, and shall publish it not later than a week after these dates within a week.'

This provision is in accordance with the prevailing practice within the ESCB and is therefore fully

supported by the ECB.

3

9.

Article 55 No 5

It is proposed that this Article read as follows:

'The  business  of  the  Bank  shall  be  restricted  to  the  following  operations.  The  Bank,  acting  in

accordance with the provisions applicable each time in the ESCB legal framework, may:

[…]

5. 

establish operating rules and oversee payment systems and settlement systems for over-the

counter transactions, with a view to ensuring the efficiency and soundness of these systems

and  in  particular  to  reducing  systemic  risk  and  strengthening  competition;  the  Bank  may

also manage such systems without prejudice to the rules applicable each time in the ESCB

legal framework. Moreover, it may set rules and oversee the operational reliability and legal

safety of means of payment with a view to safeguarding their efficiency.

These  systems  shall  include  systems  for  netting,  settlement  and  clearing  of  payments,  as  well  as

systems for the settlement and clearing of over-the counter transactions in securities, in physical or

book-entry form, and other financial instruments.

The Bank shall take all the necessary measures for the application of the rules set forth by the ECB

with a view to ensuring efficient and sound clearing and payment systems in the sense of Article 22

of the ESCB Statute.

[…]'

The proposed amendment is intended to align Article 55 No 5 with the amendment to Section (e) of

Article 2 (see paragraph 4 above). It specifies the powers of the Bank of Greece concerning means

of payment. The ECB’s opinion applies here mutatis mutandis as well, i.e. the ECB welcomes the

clarification  of  the  powers  of  the  Bank  of  Greece  over  means  of  payment.  However,  in  order  to

avoid  any  misunderstanding,  the  ECB  recommends  introducing  the  sentence  'in  accordance  with

the provisions, if any, applicable each time in the ESCB legal framework' at the end of the above

amendment. Such addition, similarly to other provisions of the Statute of the Bank of Greece, takes

into account the applicable ESCB rules.

10.  Article 55 No 18

It is proposed that this Article read as follows:

'The  business  of  the  Bank  shall  be  restricted  to  the  following  operations.  The  Bank,  acting  in

accordance with the provisions applicable each time in the ESCB legal framework, may:

[…]

18. 

by  securing  and  keeping  the  required  technical  equipment  and  necessary  personnel,

undertake the striking of metal coins and medals also on behalf of the Greek government as

4

well  as  or  of  third  parties.  Moreover,  the  Bank  may  engage  in  printing  activities  of  any

nature  whatsoever  and  dispose  of  the  articles  produced  hereunder  by  way  of  derogation
from the provision of Article 56 No 22 hereof; 

[…]'

The proposed amendment is intended to clarify that the Bank of Greece on its own behalf may also

carry  out  the  activities  provided  for  therein.  In  addition,  the  proposed  insertion  of  the  second

sentence enables the Bank of Greece to utilise its plant, equipment and personnel by broadening the

scope  of  its  business,  both  to  engage  in  printing  activities  of  any  kind  and  to  sell  the  goods

produced  in  its  plant.  Moreover,  the  proposed  insertion  provides  a  legal  basis  for  activities

traditionally undertaken by the Bank of Greece, which have so far been legitimised on an ad hoc

basis,  by  statutory  ratification  of  the  agreements  concluded  from  time  to  time.  The  above

arrangement  is  a  matter  internal  to  the  Bank  of  Greece  and  does  not  give  rise  to  any  specific

observations from the ESCB’s perspective.

11. Article 55B

It is proposed that this Article read as follows:

'The  Bank,  through  the  Monetary  Policy  Council,  shall  establish  a  framework  of  administrative

sanctions  and specify  in  detail  how they  are  to  be  applied  to  persons  who  violate  the  provisions

pertaining 

to 

the 

tasks  of 

the  Monetary  Policy  Council  under  Article  35A.

These sanctions shall include in particular the following:

[…]

f) 

a fine in favour of the Greek State, calculated either as a rate of up to 40 per cent  on the

amount of the violation, or as a lump sum of up to two hundred thousand euro (€200,000) or,

in  case  of  relapse,  up  to  three  hundred  thousand  euro  (€300,000),  provided  that  the

imposition of this sanction is not in conflict with the rules in force from time to time within

the European System of Central Banks. The above ceilings may be adjusted by an act of the

Monetary Policy Council.

[…]'

By adding a 'fine in favour of the Greek State' to the list of sanctions in Article 55B, the Bank of

Greece  is  empowered  to  impose  sanctions  on  entities  other  than  credit  institutions,  when  they

breach  provisions  falling  under the  powers  of  the  Monetary  Policy  Council.  The  ECB  has  noted

with satisfaction that such sanctions may not be imposed if they conflict with ESCB rules, notably

concerning breaches for which the ESCB rules restrictively list the sanctions imposed that exclude

fines.  However,  the  ECB  would  like  to  recommend  caution  when  applying  this  Article.  The

2 

Article 56 No 2 reads as follows: “The Bank is not entitled to: […] 2.: engage in trade, or otherwise have a direct interest
in any commercial, industrial or other enterprise; […]”

5

                                                     
absence of rules within the ESCB in certain areas may be deliberate and thus preclude a national

authority  from  assuming  responsibility  in  this  respect.  For  example,  the  TARGET  legal

documentation does not provide for a system of fines, and thus the Bank of Greece may not create

such a system as far as TARGET-related matters are concerned. Therefore, the Bank of Greece is

encouraged  to  liaise  with  the  ECB  in  those  cases  where  doubts  might  exist  as  to  whether

application of the Article could perhaps conflict with existing or possible future ESCB policies.

12.  Article 55D

It is proposed that this Article read as follows:

'Without  prejudice  to  the  provisions  of  Article  5  of  the  ESCB  Statute  and  of  complementary

European Union legislation adopted in application thereof, the Bank of Greece, in addition to its

controlling authority in the context of prudential supervision, shall have the right to examine and

make copies of all the books and records belonging to any natural person or legal entity engaged

in any sort of enterprise, provided that, in the Bank’s judgement there are indications of a violation

in the conduct of any activity which is related to the tasks of the Bank of Greece, under Article 2

thereof.

[…]'

The above provision, according to its current wording, provides for the Bank of Greece’s power to

examine  the  books  and  records  of  persons  not  supervised  by  it  'provided  that,  in  the  Bank’s

judgement, there are indications of a violation in the conduct of any activity which is related to the

task  of  the  Bank  of  Greece,  under  Article  2  hereof.'  The  deletion  of  the  phrase  'under  Article  2

hereof',  which  refers  to  the  Bank  of  Greece’s  main  activities  only,  is  intended  to  make

unambiguously clear that the above power to examine books and records extends to all activities

related to the tasks of the Bank of Greece and not only to its main activities. The ECB welcomes

this  clarification,  which  does  not  give  rise  to  any  specific  observations  from  the  ESCB’s

perspective.

13.  Article 56 No 3

It is proposed that this Article read as follows:

'The Bank is not entitled to:

[…]

3. 

become the  possessor  of immovable property,  except  insofar  as  it  is  necessary  for  its  own

business, and with the exception provided for in Article 58 as well as with the exception of

acquisitions under a specific provision of law or by universal or quasi-universal succession.

6

A  justified  decision  of  the  General  Council  may  permit  the  maintenance  or  acquisition  of

immovable property provided that it serves a specific interest of the Bank;'

The proposed amendment is intended to relax the above prohibition, which, however, is maintained

as  the  main  rule  and  is  associated  with  the  prohibition  of  trade  provided  for  in  the  immediately
preceding  paragraph3.  Specifically,  its  intention  is  to  enable  the  Bank  of  Greece  to  maintain  its

immovable  property  (e.g.  its  branch  buildings)  in  the  event  that  its  business  shrinks  and/or  to

acquire immovable property within the context of a broader transfer of property, imposed by law or

initiated for reasons of general concern (e.g. social security buildings, where the Bank of Greece

itself provides social security coverage for its staff). The above arrangement is a matter internal to

the  Bank  of  Greece  and  does  not  give  rise  to  any  specific  observations  from  the  ESCB’s

perspective.

14. Article 56 No 4

It is proposed that this Article read as follows:

'The Bank is not entitled to:

[…]

4. 

purchase  its  own  shares,  or  the  shares  of  any  other  Bank,  or  corporation,  except  for  the

shares of the Bank for International Settlements;'

The new wording of this provision repeals the prohibition on acquisition by the Bank of Greece of

its  own  shares,  which,  at  the  time  of  its  introduction,  referred  to  a  rule  applicable  to  all  public

companies limited by shares so as to harmonise its Statute with the current  derogations from  the

general prohibition,  which,  however,  continues to  be  the  main  rule according  to  Article  16(1)  of
Law 2190/19204.  As  a  result  of  the  repeal  of  that  prohibition,  in  conjunction  with  the  express
provision  of  Article 72  of  the  Statute5,  the  cases  of  legitimate  acquisition  referred  to  in
Article 16(2) and (5) of Law 2190/19206 also apply to the Bank of Greece. Such cases of legitimate

acquisition derive from EC Directive [...]. The above arrangement is a matter internal to the Bank

of Greece and does not give rise to any specific observations from the ESCB’s perspective.

3 
4
5

6

See footnote 3 for the text of Article 56 No 2.
Article 16(1) of Law 2190/1920 reads as follows: “A company limited by shares may not acquire its own shares”.
Article  72  of  the  Statute  reads  as  follows:  “The  provision  of  the  laws  on  corporations  (sociétés  anonymes)  and  Banks
shall not apply to the Bank of Greece when in conflict with this Statute”.
Article 16(2) of Law 2190/1920 reads as follows: “This provision shall not apply in the case of a) acquisitions made in
view of amortisation of the capital…, b) acquisitions made in view of reduction of capital …, c) acquisitions by way of
compulsory  attachment  in  satisfaction  of  the  company’s  own  claims,  d)  acquisitions  made  by  banking  companies  by
order of a third party e) acquisitions made gratuitously provided they have been paid off completely, f) acquisitions made
for  the  purpose  of  distribution  of  shares  to  the  company  personnel  or  to  the  personnel  of  a  company  connected
herewith…”
Article  16(5)  of  Law  2190/1920  reads  as  follows:  “Companies  the  shares  of  which  are  quoted  on  the  Athens  Stock
Exchange  may,  following  a  decision  of  the  General  Meeting  of  Shareholders  taken  by  virtue  of  the  provisions  of
Articles 29 paras 1 and 2 and 31, para 1, acquire their own shares through the Stock Exchange up to 10% of the total of
their shares …”

7

                                                     
15.  Article 56 No 5

It is proposed that this Article read as follows:

'The Bank is not entitled to:

[…]

5. 

[…]’

pay interest on deposits or current accounts with the Bank. The Bank may, in derogation to
the general prohibition, pay interest to the Greek State as provided for in Article 457, as well

as on deposits of other Banks in Greece. Furthermore, interest may be paid on time deposits

kept with the Bank in foreign convertible exchange, of other Banks, or of natural persons or

legal  entities  established  abroad  as  well  as  on  advances  made  to  the  Bank  by  the  said

persons and in the cases where payment of interest is provided for by the rules in force from

time to time within the European System of Central Banks.

According to the current wording of the above provision, one of the exceptions to the continuing

basic prohibition of payment of interest by the Bank of Greece on deposits or accounts is its right to

pay interest 'on time deposits kept with the Bank in foreign convertible exchange, of other Banks,

or of natural persons or legal entities established abroad, as well as on advances made to the Bank

in  foreign  convertible  exchange  by  the  said  person'.  The  repeal  of  this  condition  for  payment  of

interest  on  deposits  (i.e.  to  be  in  foreign  convertible  exchange)  is  proposed  in  response  to

reasonable  requests  by  legal  entities  established  abroad  (e.g.  the  Commission  of  the  European

Communities), particularly in relation to deposits in currencies of EU Member States in the name

of legal entities established abroad, on which interest used to accrue, as long as they were deposits

in foreign exchange, but this ceased to apply on conversion into euro deposits. The ECB welcomes

this clarification, which does not give rise to any observations from the ESCB’s perspective.

16. Article 58

It is proposed that this Article read as follows:

‘[...]

In  the  case  of  failure  to  repay  a  debt  due  to  the  Bank,  any  immovable  property  coming  into  the

possession of the Bank under this article shall be realised as speedily as possible by public auction

or  private  sale.  No  such  property  may  be  retained  by  the  Bank  for  its  own  purposes,  unless

required for the carrying on of the business of the Bank without prejudice to Article 56 No 3.

[…]'

7 

Article 45 reads as follows: “[….] The Bank shall pay interest on such accounts. The interest rate shall be determined in
an  agreement  to  be  entered  into  between  the  parties  concerned  and  shall  in  any  case  reflect  the  market  terms  and
conditions.” 

8

                                                     
The proposed amendment is intended to align Article 58 with the amended provision on acquisition

of immovable property as per Article 56 No 3 (see paragraph 13 above). The above arrangement is

a matter internal to the Bank of Greece and does not give rise to any specific observations from the

ESCB’s perspective.

17.  Article 68

It is proposed that this Article read as follows:

'In  the  event  of  calling  in  of  any  series  of  banknotes  denominated  in  drachmae,  the  General

Council shall determine and publicly announce the period within which the said notes should be

presented for exchange. After expiration of such period, the banknotes denominated in drachmae

recalled shall cease to be legal tender except within the Bank of Greece.

Two years After the expiration of the latest date publicly announced for the calling in of a series of

banknotes  denominated  in  drachmae,  the  Bank  is  entitled  to  deduct  from  the  amount  of  note

circulation the amount of the banknotes denominated in drachmae of the series then  outstanding

and  unpaid,  and  the  notes  shall  no  longer  be  considered  in  circulation.  Ten  years  after  the

expiration of the same as above date, these notes shall  be  considered as  having  been  prescribed

and the bearer of same shall have no valid claim whatsoever arising therefrom.'

In  so  far  as  this  paragraph  and  the  preceding  paragraph  (i.e.  Article  68  in  whole)  concern

withdrawal of illegal tender, it could be totally repealed. However, this is not, for the time being,

considered  by  the  Bank  of  Greece,  as  the  drachma  withdrawal  procedure  is  still  in  progress  and

both the Bank of Greece General Council decision on withdrawal and the exchange of drachmae
and Article 5 of Law 2948/20018 on the same issue expressly refer to Article 68. Since there can be

no confusion as to the meaning of the first paragraph of Article 68 now that the drachma has been

replaced  by  the  euro,  the  ECB  does  not  have  any  reservations  on  this  point.  However,  the  ECB

would of course recommend revising the first paragraph so as to reflect the actual situation once the

above reasons not to do so have disappeared (it being acknowledged that this may only be in 2012

when the exchange period for drachmae against euro banknotes has expired). In addition, the Bank

of  Greece’s  right  'to  deduct  from  the  amount  of  note  circulation  the  amount  of  the  banknotes

denominated in drachma of the series then outstanding and unpaid' so that 'the notes shall no longer

be  considered  in circulation'  (first  sentence  of  the  provision),  as  it  is  exclusively  associated  with

currency  in  circulation,  can  no  longer  be  subject  to  a  time  limit  (since  it  would  now  concern  a

totally withdrawn currency) and can only be exercised from the moment of withdrawal onwards.

Therefore, the proposed amendment abolishes the time limit (of two years), so that this issue will

8

Article 5 of Law 2948/2001 reads as follows: “1. From 1st March 2002 up to 1st March 2012 drachmae banknotes shall
continue to be accepted for exchange with euro banknotes from the Bank of Greece, pursuant to Article 68 of its Statute.
2. From the 1st March 2002 up to 1st March 2004 drachmae coins shall continue to be accepted for exchange with euro
banknotes from the Bank of Greece and the public financial offices [….]”

9

                                                     
not seem to be addressed contra litteram legis. The ECB welcomes this clarification, which does

not give rise to any specific observations from the ESCB’s perspective.

18.

The  ECB  confirms  that  it  has  no  objection  to  the  competent  national  authorities  making  this

opinion publicly available at their discretion. This opinion will be published on the ECB’s website

six months after the date of its adoption.

Done at Frankfurt am Main on 28 March 2003.

The President of the ECB

[signed]

Willem F. DUISENBERG

10