Opinion of the European Central Bank of 25 July 2006 at the request of the Bank of Greece on a draft provision on the Bank of Greece’s powers in the field of consumer protection (CON/2006/38)
Date: 2006-07-25
Institutions: European Central Bank
Subjects: Greece, central bank, competence of the institution, consumer protection, financial stability, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 25 July 2006  

at the request of the Bank of Greece 

on a draft provision on the Bank of Greece’s powers in the field of consumer protection 

(CON/2006/38) 

Introduction and legal basis 

On  3  July  2006  the  European  Central  Bank  (ECB)  received  a  request  from  the  Bank  of  Greece  for  an 

opinion  on  a  draft  provision  on  the  Bank  of  Greece’s  powers  in  the  field  of  consumer  protection 

(hereinafter the ‘draft provision’). 

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

European  Community  and  on  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 provisions1, as the draft provision concerns a national central bank (NCB). 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 provision 

1.1  The draft provision would establish a comprehensive consumer-protection regime for transactions 

in  financial  products  and  services  offered  by  entities  supervised  by  the  Bank  of  Greece.  More 

specifically, it would give the Bank of Greece powers to lay down rules on the following: (i) the 

transparency of transactions in financial products and services; and (ii) the protection of consumers 

entering into transactions with entities supervised by the Bank of Greece. The latter power would 

more specifically include laying down rules on the calculation of interest rates, issuance of all types 

of payment instruments, financial intermediaries, credit advertising, a consumer’s right to opt out of 

a financial contract or terminate it early, and a financial institution’s duty to provide information to 

consumers. The draft provision also lays down the Bank of Greece’s powers to impose sanctions in 

case  of  failure  to  comply  with  the  abovementioned  rules  and  the  procedures  for  imposing  such 

sanctions. 

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OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
                                                      
1.2   Furthermore, under paragraph 3 of the draft provision, a consultative body would be established in 

which  both  the  Ministry  of  Development  and  the  Bank  of  Greece  would  participate  with  the 

purpose of applying and developing best practices for effective consumer protection, implementing 

the  relevant  Community  Directives  and  promoting  training  programmes  addressed  both  to 

consumers and to the staff of financial institutions. 

1.3   Finally, the draft provision regulates the civil liability of the Bank of Greece’s statutory bodies and 

staff  for  their  acts  or  omissions  when  carrying  out  duties  on  the  basis  of  the  public  authority 

assigned to the Bank of Greece. In this context, it establishes that a collective body or member of 

staff would only be liable in the case of their wilful misconduct or gross negligence. 

2. 

General observations 

2.1  As regards the granting of new consumer-protection powers to the Bank of Greece, the ECB would 

draw attention to the fact that the new tasks described under paragraph 1.1 are not listed among the 

functions of the NCBs as specified in the Statute of the European System of Central Banks and of 

the European Central Bank. However, without prejudice to the Governing Council’s powers to take 

action under Article 14.4 of the Statute, the ECB does not consider that the abovementioned tasks 

would interfere with the objectives and tasks of the European System of Central Banks (ESCB). 

2.2  Nonetheless, it should be noted that pursuant to the last sentence of Article 14.4 of the Statute, the 

new  tasks  described  in  paragraphs  1.1  and  1.2  would  have  to  be  performed  on  the  responsibility 

and liability of the Bank of Greece, and would not be regarded as being part of the functions of the 

ESCB. 

2.3 

In more general terms, the ECB welcomes the allocation of new powers under the draft provision 

to the Bank of Greece to ensure the transparency of terms and procedures of transactions carried 

out  by  entities  subject  to  its  supervision  (i.e.  credit  institutions,  financial  leasing  companies, 

factoring  companies,  mutual  guarantee  companies,  money-market  broker  companies,  counter-

guarantee funds and bureaux de change). The imposition of specific transparency requirements for 

financial  transactions,  accompanied  by  effective  monitoring  of  the  compliance  with  those 

requirements, should allow consumers to compare more easily different products and services on 

offer  and  could  therefore  enhance  competition  between  intermediaries.  Moreover,  such  powers 

comply  with  the  objectives  of  financial  supervision  as  laid  down  in  the  Statute  of  the  Bank  of 

Greece. In this context, the ECB would draw attention to Article 55A of the Statute of the Bank of 

Greece,  which  states  that  ‘prudential  supervision  shall  also  be  aimed  at  ensuring  transparency  of 

the  procedures  and  terms  of  transactions  carried  out  by  those  subject  to  supervision’.  Indeed, 

prudential  supervision  and  investor/consumer  protection  are  both  intended  to  safeguard  the 

soundness of the financial market and the preservation of confidence in the marketplace. However, 

it is important to ensure that both functions have adequate and equal emphasis and that appropriate 

organisational requirements are in place to ensure it. Therefore, the Bank of Greece’s intention to 

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allocate  the  functions  attributed  by  the  draft  provision  to  a  specific  department  goes  in  the  right 

direction.  

3. 

Specific observations 

3.1  Exclusive competence of the Bank of Greece 

It is the ECB’s understanding that all rule-making described under paragraphs 1.1 and 1.2 would 

fall  under  the  Bank  of  Greece’s  exclusive  competence.  Such  exclusive  competence  in  relation  to 

the protection of consumers of financial services would also correspond with the Bank of Greece’s 

exclusive  competence  to  supervise  the  entities  described  in  Article  55A  of  its  Statute.  The  ECB 

welcomes the fact that the Bank of Greece would have the power to establish rules in relation to the 

transparency of transactions in financial services and products offered by supervised entities, as this 

could  improve  the  clarity  and  efficiency  of  the  regulatory  framework  in  Greece,  simultaneously 

ensuring both adequate consumer protection and a level playing field. 

3.2  Financial independence of the Bank of Greece 

The ECB observes that the new tasks described under paragraphs 1.1 and 1.2 are bound to require 

the Bank of Greece to commit considerable resources, both human and financial, to tasks other than 
the functions specified in the Statute. The ECB has consistently held the view2 that ‘Member States 

may not put their NCBs in the position of not having sufficient financial resources to carry out their 

ESCB or Eurosystem related tasks, as applicable’. The ECB therefore expects that, in planning the 

transfer of additional powers to the Bank of Greece, care will be taken to ensure that the Bank’s 

operational capacity to carry out Eurosystem-related tasks will not be affected. 

3.3  Establishment of a joint consultative body 

Paragraph  3  of  the  draft  provision  could  be  enhanced  by  giving  the  consultative  body  to  be 

established  between  the  Bank  of  Greece  and  the  Ministry  of  Development  the  task  of  organising 

consultations with consumer associations, evaluating such consultations and putting the results to 

practical  use.  This  would  be  in  line  with  envisaged  Community  best  practices  in  the  field  of 
consumer protection3. 

3.4  Liability regime 

The  ECB  welcomes  paragraph  4  of  the  draft  provision,  which  adequately  reflects  the  Core 

Principles  for  Effective  Banking  Supervision  adopted  by  the  Basel  Committee  on  Banking 
Supervision4 by requiring protection from personal and institutional liability for supervisory actions 

2 
3 

4 

See e.g. the ECB’s Convergence Report 2004, p. 28. 
See e.g. the Amended proposal for a Decision of the European Parliament and of the Council establishing a programme 
of Community action in the field of consumer policy (2007-2013), COM(2006) 235 final. 
Available at: http://www.bis.org/publ/bcbs30a.pdf. 

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taken  by  bodies  and  staff  of  the  Bank  of  Greece  in  good  faith  in  the  course  of  performing  their 

supervisory duties.  

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

Done at Frankfurt am Main, 25 July 2006. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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