Opinion of the European Central Bank of 22 June 2006 at the request of the French Senate on a draft law on the Banque de France (CON/2006/32)
Date: 2006-06-22
Institutions: European Central Bank
Subjects: France, appointment of staff, central bank, institutional activity, national law, statistics

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 22 June 2006  

at the request of the French Senate on a draft law on the Banque de France 

(CON/2006/32) 

Introduction and legal basis 

On  30  May 2006,  the  European  Central  Bank  (ECB)  received  a  request  from  the  French  Senate  for  an 

opinion on a draft law (proposition de loi) on the Banque de France (hereinafter the ‘draft law’). 

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

European Community and the third and fourth 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  amends  the  Banque  de  France’s  Statute  and  relates  to  the 

collection, compilation and distribution of monetary, financial, banking, payment systems and balance of 

payment statistics. In accordance with the first sentence of Article 17.5 of the Rules of Procedure of the 

European Central Bank, the Governing Council has adopted this opinion. 

1. 

Purpose of the draft law 

1.1.  The draft law replaces the Banque de France’s Monetary Policy Council (MPC) with a new body, 

the  Monetary  Committee  of  the  General  Council  (hereinafter  the  ‘Monetary  Committee’),  which 

would  form  part  of  the  Banque  de  France’s  General  Council,  whose  task  it  is  to  administer  the 
Banque  de  France2.  The  Monetary  Committee  would  be  composed  of  seven  members  as  is 

currently the case for the MPC: the Banque de France’s Governor and the two Deputy Governors, 
as  well  as  four  other  members3.  While  the  Monetary  Committee  would  continue  to  examine 

monetary trends and analyse the implications of the monetary policy formulated within the ESCB 
framework4,  its  tasks  would  be  expressly  extended  in  the  Banque  de  France’s  Statute  to  the 
adoption of the measures transposing the ECB’s guidelines5. The draft law defines the conditions 

of appointment of the four members of the Monetary Committee, other than the Governor and the 

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2  
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4  
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OJ L 189, 3.7.1998, p. 42. 
Current Article L.142-6 of the Monetary and Financial Code (MFC). 
Article L. 142-3 and Article L. 142-5 of the MFC, as proposed by the draft law. 
First paragraph of Article L. 142-4 of the MFC, as proposed by the draft law. 
Second paragraph of Article L. 142-4 of the MFC, as proposed by the draft law. 

 
 
 
 
                                                 
Deputy Governors, as well as the incompatibility regime with regard to the possibility of carrying 

on other professional activities and the rules relating to conflicts of interest applicable to them. 

1.2.  The  draft  law  also  introduces  into  the  Banque  de  France’s  Statute  a  confirmation  of  the  central 

bank’s  role  and  powers  when  collecting  the  statistical  data  needed  to  establish  the  balance  of 
payments6.  A  specific  provision  deals  with  the  possibility  for  the  Banque  de  France  to  receive 

information from undertakings and professional associations relating to their financial situation and 

to communicate this information to central banks, to other institutions performing similar tasks and 
to  credit  institutions  and  financial  institutions7.  Finally,  the  draft  law  provides  that  the  dividend 

paid  by  the  Banque  de  France  to  the  State  will  be  increased  by  the  amount  of  the  savings  on 
remuneration credits which result from this law8. 

2. 

Reform of the Banque de France’s decision-making bodies 

Creation of the General Council’s Monetary Committee 

2.1  The  purpose  of  the  reform  of  the  Banque  de  France’s  decision-making  bodies  is  to  take  into 
account the transfer of monetary policy responsibilities to the ECB9 and to simplify the Banque de 
France’s management and supervisory bodies by grouping them together10. The draft law provides 

for the MPC’s disbanding. The ECB notes in this respect that, since the transfer of the monetary 

policy powers to the ESCB, the ECB’s Governing Council is the single collegial decision-making 

body  defining  the  euro  area’s  monetary  policy  and,  in  particular,  the  body  that  adopts  the 

guidelines and takes the decisions necessary to ensure the performance of the Eurosystem’s tasks. 

In this context, the ECB welcomes the clarification brought by the abrogation of the MPC.  

2.2  At the same time, the MPC will be replaced by the Monetary Committee, a body which will form 

part  of  the  General  Council.  The  draft  law  simplifies  the  conditions  currently  applicable  to  the 
appointment of the members of the MPC, other than the Governor and the Deputy Governors11, in 
order to take into account the evolving functions of the MPC12. According to the preamble to the 

draft law, this should result in a significant downward adjustment of the remuneration of the four 
members of the Monetary Committee other than the Governor and the Deputy Governors13. One of 

the main changes introduced by this reform will be that the Monetary Committee members will be 
able to carry out other professional activities if certain conditions are fulfilled14. 

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7  
8  
9  
10  
11  
12  
13  
14  

Article L. 141-6 of the MFC, as proposed by the draft law. 
Article L. 144-1 of the MFC, as proposed by the draft law. 
Article 7 of the draft law. 
Second sentence of the preamble to the draft law. 
Preamble to the draft law, Article 1. 
Cf. the current Article L. 142-3 of the MFC and Article L. 142-5 of the MFC, as proposed by the draft law. 
Preamble to the draft law, seventh paragraph. 
Preamble to the draft law, seventh paragraph. 
Fourth paragraph of Article L.142-7 of the MFC, as proposed in Article 1 of the draft law. 

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Personal independence 

2.3.  As  a  matter  of principle, membership  of a decision-making body involved in the performance of 

ESCB-related tasks is incompatible with the exercise of other functions that might create a conflict 
of interest15. Concerning the Monetary Committee members (other than the Governor and Deputy 

Governors), the ECB notes in this respect that the draft law provides for a specific incompatibility 

regime and a set of rules on avoiding conflicts of interest. 

2.4.  As regards the incompatibility regime provided for in the draft law16, the above four members of 
the Monetary Committee  may not perform any duties or hold any interests in regulated entities17 
and  may  not  hold  any  parliamentary  office18.  The  ECB  would  recommend  extending  this 

incompatibility regime to the holding of an “office in the executive or legislative branches of the 
State or of regional or local administrations”19. The ECB also notes that a specific check procedure 

to  prevent  conflicts  of  interest  has  been  set  up  in  the  draft  law  and  that  the  prior  agreement  of  a 

majority  of  Monetary  Committee  members  (except  the  interested  member)  is  required  for  the 
exercise of any other professional activity20.  

2.5.  The draft law provides that ‘those members of the Monetary Policy Council appointed by decree of 

the  Council  of  Ministers  who  hold  office  on  the  date  this  law  is  published  shall  as  of  right  be 
members of the Monetary Committee. Their term of office shall not be extended after its expiry’21. 

The ECB suggests clarifying this provision to ensure that only the four members of the Monetary 

Committee  other  than  the  Governor  and  the  Deputy  Governors  are  referred  to  by  this  provision. 

Indeed, the Governor and the Deputy Governors are also members of the MPC and appointed by a 
Council of Ministers decree. Their mandate as members of the MPC is renewable22 and therefore 

their  mandate  as  members  of  the  Monetary  Committee  has  to  be  renewable.  The  ECB  also 

recommends  deleting  the  reference  to  the  MPC  in  the  provision  of  the  Statute  of  the  Banque  de 
France relating to litigation23. 

2.6.  Under the draft law, it is also provided that ‘If any member [of the Monetary Committee other than 

the  Governor  or  the  Deputy  Governors]  is  unable  to  complete  their  term  of  office,  they  shall  be 

replaced  immediately  (…).  In  any  such  case,  the  person  appointed  shall  hold  office  only  for  the 
remainder  of  the  term  of  the  member  replaced’24.  Furthermore,  in  such  cases,  contrary  to  the 

generally applicable rule, the terms of office of the members of the Monetary Committee may be 

15  
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24  

ECB Convergence Report, May 2006, 3.1.3, Safeguards against conflict of interest, p. 65. 
Article L. 142-7 of the MFC, as proposed by the draft law. 
As listed in Book V of the MFC. 
Article L.142-7 of the MFC, as proposed by the draft law. 
ECB Convergence Report, May 2006, 3.1.3, Safeguards against conflict of interest, p. 65. 
Fourth paragraph of Article L.142-7 of the MFC, as proposed by the draft law. 
Article L. 142-5 of the MFC, as proposed in Article 2 of the draft law. 
Current last paragraph of Article L. 142-8 of the MFC. 
Current Article L.144-3 of the MFC. 
Article L.142-5 of the MFC, sixth paragraph (as proposed in Article 1 of the draft law). 

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renewed25.  However,  the  principle  of  personal  independence,  as  laid  down  in  Article  14.2  of  the 
Statute of the European System of Central Banks and of the European Central Bank26, requires that 

the same rules for the security of tenure of the office of Governor should apply to other members of 

the  decision-making  bodies  of  NCBs  involved  in  the  performance  of  ESCB-related  tasks.  As  a 

consequence, the draft law should be amended in order to bring the terms of office of a member of 

the Monetary Committee replacing another member who is unable to complete their term of office 

into line with Article 14.2 of the ESCB Statute. 

3.  Other comments 

3.1.  The ECB welcomes the clarifications made on the role of the Banque de France regarding balance 
of payments and international investment position statistics27. A decree to be adopted will set out 
the  sanctions  applicable  in  the  case  of  breaches  of  reporting  obligations28.  The  ECB  understands 

that  this  decree  will  be  without  prejudice  to  the  ECB’s  competence  to  impose  sanctions  on 
reporting agents for specific breaches of their statistical reporting obligations29. 

3.2.  The ECB notes the following concerns regarding Article 7 of the draft law30. First, since it enables 

the French authorities to interfere with the allocation of profits to be proposed by the Banque de 

France’s General Council, such provision might be considered as affecting the Banque de France’s 

institutional independence. Second, this provision of the draft law seems to imply that the amount 

of the savings on remuneration credits which result from this law would be automatically due to the 

French State even in the absence of a dividend paid by the Banque de France. The ECB recalls that 

‘the  decision  on  allocation  of  profits  should  be  taken  by  the  NCB’s  decision-making  body  on 
professional  grounds,  and  should  not  be  subject  to  the  discretion  of  third  parties’31.  As  a 

consequence,  the  ECB  would  recommend  deleting  such  provision,  since  it  is  incompatible  with 
Article 108 of the Treaty as well as with the Monetary and Financial Code32. 

25  
26  

27  
28  
29  

30  

31  
32  

Article L.142-5 of the MFC, seventh paragraph (as proposed in Article 1 of the draft law). 
As  further  explained  in  the  ECB  Convergence  Reports  of  2004  and  2006  (October  2004,  2.3.1,  ‘Central  bank 
independence’, p. 27 and May 2006, 3.1.3, ‘Personal independence’, p. 64). 
Article L. 141-6 of the MFC, as proposed by the draft law. 
Article L.141-6 I and II of the MFC, as proposed in Article 2 of the draft law. 
See Council Regulation (EC) No 2533/98 of 23 November 1998 concerning the collection of statistical information by 
the European Central Bank, (OJ L 318, 27.11.1998, p. 8) and Council Regulation (EC) No 2532/98 of 23 November 1998 
concerning the powers of the European Central Bank to impose sanctions, (OJ L 318, 27.11.1998, p. 4). 
Article 7 of the draft law provides that the dividend paid by the Banque de France to the State will be increased by the 
amount of the savings on remuneration credits which result from this law. 
ECB Convergence Report, May 2006, 3.1.4, ‘Distribution of profits, NCBs’ capital and financial provisions’, p. 66. 
Fourth  paragraph  of  the  Article  L.142-2,  of  the  MFC  as  proposed  by  the  draft  law  and  current  Article  R.144-4  of  the 
MFC (regulatory part). 

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4.  

Final observations 

4.1.  Should the provisions of the draft law be subject, in the course of the parliamentary procedure, to 

substantial amendments falling within the ECB’s field of competence, the ECB wishes to draw the 

consulting authority’s attention to the need to re-consult the ECB on these amendments. 

4.2.  The  ECB  will  also  need  to  be  consulted  on  the  draft  amendments  to  the  regulatory  part  of  the 

Monetary and Financial Code pursuant to the changes introduced to the Statute of the Banque de 
France, as well as on the draft version of the decree referred to in Article 2 of the draft law33. 

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 22 June 2006. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

33  

New proposed Article L.141-6, III of the MFC, as proposed by the draft law. 

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