Opinion of the European Central Bank of 3 August 2006 at the request of the Belgian Ministry of Finance on a draft law amending the Organic Statute of the Nationale Bank van België/Banque Nationale de Belgique (CON/2006/40)
Date: 2006-08-03
Institutions: European Central Bank
Subjects: Belgium, claim, credit, guarantee, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 3 August 2006 

at the request of the Belgian Ministry of Finance 

on a draft law amending the Organic Statute of the Nationale Bank van België/ 

Banque Nationale de Belgique 

(CON/2006/40) 

Introduction and legal basis 

On  8  May  2006  the  European  Central  Bank  (ECB)  received  a  request  from  the  Belgian  Ministry  of 

Finance for an opinion on a draft law amending Article 7 of the Law of 22 February 1998 establishing the 

Organic Statute of the Nationale Bank van België/Banque Nationale de Belgique (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 on the 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  conditions  under  which  claims 

law  concerns 

the  draft 

(schuldvorderingen/créances)  can  be  pledged  to  the  Nationale  Bank  van  België/Banque  Nationale  de 

Belgique  (NBB)  as  collateral  for  the  NBB’s  credit  operations.  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 

The purpose of the draft law is to introduce in Belgian law a specific technique for pledging claims to the 

NBB, thereby strengthening the protection of the NBB’s rights as a pledgee without this protection being 

dependent  on  ex  ante  notification  of  the  pledge  to  the  debtor.  This  protection  should  be  viewed  in  the 

light  of the  requirement  under  primary  Community law  that  Eurosystem  credit  operations are  based  on 

adequate  collateral  (Article  18.1  of  the  Statute  of  the  European  System  of  Central  Banks  and  of  the 

European  Central  Bank).  As  a  result,  the  ECB  has  to  ensure  that  appropriate  legal  rules  and/or  other 

measures  exist.  The  ECB  understands  that  the  draft  law  will,  in  this  respect  only,  replace  the  general 

Belgian  regime  applicable  to  pledges  (see  paragraph  2.2 below).  The  technique  introduced  by  the  draft 

law consists of entering the pledge in a register held by either the NBB or a third party authorised by the 

1  

OJ L 189, 3.7.1998, p. 42. 

 
 
 
 
                                                           
NBB  (hereinafter  the  ‘register’).  This  entry  results,  amongst  other  things,  in  the  pledge  being  effective 

against third parties (erga omnes tegenwerpelijk/opposable erga omnes) except the debtor of the pledged 

claim, to whom the pledge is generally not notified ex ante (see paragraph 3.3 below). The register may 

only be consulted by third parties who are considering accepting in rem rights (including in rem security 

rights)  over  claims  which  are  eligible  to  be  pledged  to  the  NBB.  Only  third  parties  who  are  entitled  to 

consult the register are deemed by law to be acting in bad faith if they seek to exercise their right to a 

claim that has already been pledged to the NBB and entered in the register. The ECB understands that 

other third parties are only deemed to be acting in bad faith if they have actual knowledge of the pledge 

(e.g. the pledgor).  

2. 

General observations 

2.1  The  pledging  technique  in  the  draft  law  enables  the  NBB  to  avoid  certain  legal  risks  relating  to 

issues  of  priority  that  might  arise  under  the  general  Belgian  regime  applicable  to  pledges  (see 

paragraph  2.2  below).  The  ECB  therefore  welcomes  the  draft  law.  The  draft  law  will  become 

particularly  relevant  when  the  NBB  accepts  credit  claims  meeting  the  Eurosystem  eligibility 

criteria  as  collateral  following  the  introduction  of  a  single  list  of  eligible  collateral  for  the 

Eurosystem’s  credit  operations,  which  will  include  credit  claims  (see  also  the  explanatory 
memorandum accompanying the draft law, p. 1) from 1 January 20072. 

2.2  The present opinion is restricted to the draft law and does not cover claims collateralisation rules 

under  the  laws  of  other  Member  States  that  have  adopted  the  euro  (hereinafter  ‘participating 

Member  States’).  The  ECB  nonetheless  understands  that  Belgium  is  one  of  the  participating 

Member States in which claims can be validly collateralised (e.g. through a pledge) without such 

validity being dependent on ex ante notification to, or recognition by, the debtor. Under the general 

Belgian  regime  applicable  to  pledges,  the  mere  conclusion  of  the  pledge  agreement  renders  this 

pledge  effective  against  all  third  parties,  except  against  the  debtor  of  the  pledged  claim  (against 

whom the pledge is only effective if the pledge has been either notified to the debtor or the latter 

has  recognised  it).  As  a  consequence,  any  debtor  which  has  not  been  notified and  which  has  not 

recognised the pledge can validly continue to pay the original creditor, provided that the debtor is 

acting  in  good  faith  (i.e.  without  having  actual  knowledge  of  the  pledge  through  other  means). 

Such notification or recognition is also relevant in determining the priority of claims in the event 

that  two  or  more  parties,  acting  in  good  faith,  seek  to  exercise  conflicting  rights  to  the  pledged 

claim  (e.g.  because  the  claim  has  been  re-pledged  or  because  ownership  of  the  claim  has  been 

transferred), as the party which first notified the pledge to the debtor or to whom the debtor first 

recognised the pledge will have priority. This notification or recognition also determines whether 

the  debtor,  acting  in  good  faith,  is  entitled  to  diminish  or  extinguish  its  debt  through  set-off  or 

2  

See the document entitled ‘Decisions taken by the Governing Council of the ECB (in addition to decisions setting interest 
rates)’  for  July  2005  and  the  related  ECB  press  release  of  22  July  2005  entitled  ‘Eurosystem  collateral  framework: 
Inclusion of non-marketable assets in the Single List’, available on the ECB’s website at www.ecb.int. 

2 

 
 
                                                           
another similar mechanism. Thus, while debtor notification might, in participating Member States 

such as Belgium, not be a statutory requirement for the validity of collateralisation of a claim, such 

notification may nonetheless be relevant for the value and effectiveness of the rights of the party 

that the collateral is intended to protect (in the present case the NBB). 

2.3 

In  view  of  the  diversity  of  national  law  regarding  debtor  notification,  the  consequences  of  an 
absence  of  such  notification  and  the  methods  to  address  these  consequences3,  the  ECB  does  not 

require such notification in participating Member States where ex ante notification is not required 

for collateralisation of a claim to be valid. The pledging technique in the draft law guarantees the 

priority of the NBB’s rights in relation to a pledge that has been registered over in rem (security) 

rights that third parties subsequently establish on this pledged claim, since the pledging technique 

in the draft law deems such third parties by law to be acting in bad faith. However, given that the 

right to consult this register is restricted to third parties who intend to accept ‘an in rem (security) 

right’ on a claim that is eligible to be pledged to the NBB, the ECB understands that, for instance, 

the  substitution  of  the  debtor  (delegatie/délégation)  does  not  fall  within  this  category. 

Consequently, as this technique and other similar techniques may still affect the rights of the NBB, 

it  might  be  necessary  to  address  this  issue  through  other  rules  (e.g.  contractual  arrangements)  or 

techniques. Also, it is not clear whether under the pledging technique in the draft law, a third party 

which  had  acquired  an  in  rem  right  to  a  claim  which  was  subsequently  pledged  to  the  NBB  and 

entered in the register would have priority in the event that the third party’s right was notified to, or 

recognised by, the debtor after the NBB’s pledge was entered in the register. The ECB questions 

whether, in this specific case, making priority of the third party’s right dependent on its notification 

to,  or  recognition  by,  the  debtor  before  the  entry  of  the  NBB’s  pledge  in  the  register  might  not 

provide more legal certainty than a ‘declaration of honour’ by the credit institution (pledgor) to the 

NBB  of  the  absence  of  such  a  right.  The  ECB  understands  that  there  is  a  similar  rule  under  the 

general Belgian regime applicable to pledges. Finally, the ECB notes that the benefit of the draft 

law  is  currently  limited  to  claims  pledged  to  the  NBB and  therefore does  not  apply  to  claims 

pledged under the pledging technique in the draft law to another Eurosystem central bank. Such an 

extension  could,  for  instance, be  relevant  for  the  cross-border  collateralisation  of  claims  in  the 

framework  of  Eurosystem  credit  operations  if  the  NBB  acts  as  correspondent  agent  for 

another Eurosystem  central  bank.  In  any  event,  the  ECB  understands  that,  even  if  the  benefit  of 

the draft  law  remains  only  applicable  to  claims  pledged  to  the  NBB,  the  general  Belgian  regime 

applicable  to  pledges,  i.e.  with  ex  ante  notification  not  being  a  precondition  for  the  pledge’s 

validity (see paragraph 2.2 above), will still allow such cross-border collateralisation. 

2.4  While debtor notification might not be required for collateralisation of a claim to be valid under the 

general  Belgian  regime  applicable  to  pledges  (see  paragraph  2.2  above),  it  might  still  affect  the 

3  

See also the abovementioned document entitled ‘Decisions taken by the Governing Council of the ECB (in addition to 
decisions  setting  interest  rates)’  for  July  2005  and  related  ECB  press  release  of  22 July  2005,  the  latter  under  the 
subheading ‘Additional legal requirements’. 

3 

 
                                                           
value and effectiveness of the pledgee’s rights. Indeed, the question of whether or not the debtor 

can validly pay its creditor (the pledgor) or a third party (e.g. in the event of a subsequent pledge of 

the same claim) or validly diminish or even extinguish its debt through set-off depends on whether 

and when the pledge has been notified to, or recognised by, the debtor. The pledging technique in 

the draft law does not entirely eliminate the possibility of such payment and set-off, as Article 6 of 

the draft law only contains a prohibition on set-off by the debtor and an obligation for the debtor to 

pay the claim to the NBB in the event of the insolvency of the credit institution that pledged the 

claim to the NBB (see also paragraph 3.4 below). The NBB would be fully legally protected if the 

pledge would, by the mere fact of registration, also be effective against the debtor. In the absence 

of such a provision, the effects of the debtor’s payment and set-off possibility may be similar to in 

other participating Member States where debtor notification is not required for the collateralisation 

of a claim to be valid. 

3. 

Specific observations 

3.1  Article  6  of  the  draft  law  lists  certain  specific  consequences  of  the  pledge  in  the  event  that  the 

credit institution that pledged the claim to the NBB becomes insolvent. Since the Eurosystem’s and 

the NBB’s credit operations also include intraday credit operations and as the counterparties who 

are  eligible  to  conduct  such  operations  are  not  restricted  to  credit  institutions,  the  scope  of 

Article 6,  which  only  covers  credit  institutions,  might  be  too  narrow.  Even  though  the  ECB 

understands  that,  in  practice,  the  NBB  only  envisages  receiving  credit  claims  as  collateral  from 

counterparties  that  are  credit  institutions,  it  might  be  more  appropriate  to  instead  refer  to  any 

counterparty that is eligible for central bank credit operations and thus eligible to pledge a claim to 

the NBB. 

3.2  One specific consequence of the credit institution’s possible insolvency is that, if the NBB notifies 

the  pledge  to  the  debtor,  the  debtor  can  thereafter  only  validly  make  payment  to  the  NBB. 

Although  this  is  not  explicitly  stated  in  the  draft  law,  which  is  a  lex  specialis  compared  to  the 

general Belgian regime applicable to pledges, the ECB understands the draft law leaves the NBB 

the  possibility  of  notifying  the  pledge  to  the  debtor  outside  the  specific  situation  of  the  credit 

institution’s  insolvency,  if  the  NBB  wishes  to  have  recourse  to  such  notification  for  whatever 

reason.  Such  notification  will  then  result  in  the  debtor  being  deemed  to  be  acting  in  bad  faith 

because of its actual knowledge of the pledge and, hence, will ensure that only a payment to the 

NBB validly releases the debtor from its obligation to pay. Furthermore, irrespective of whether or 

not the credit institution is insolvent, the NBB will not have any repayment claim against the payee 

if  the  payee  is  not  an  entity  that  is  entitled  to  consult  the  register  (as  only  such  entities  can  be 

deemed to be acting in bad faith; see paragraph 1 above) or an entity that has actual knowledge of 

the pledge, the latter possibility being less likely in practice.  

4 

 
 
3.3  The ECB also understands that the prohibition in Article 6 of the draft law on set-off in the event of 

insolvency of the credit institution (i.e. the NBB’s pledgor) does not prevent a valid reduction or 

even extinction of the claim through set-off, if the conditions for such set-off have been fulfilled 

before the credit institution’s insolvency (see paragraph 2.4 above). 

3.4  Finally,  the  ECB  welcomes  the  fact  that  Article  6  of  the  draft  law  applies  the  simplified 
enforcement procedure laid down in Belgian law4 in relation to in rem collateral arrangements and 
loans for financial instruments, with regard to claims pledged to the NBB5. The ECB notes that the 

application of this procedure is normally not limited to insolvency proceedings, but encompasses, 

for instance, attachments. In view of the benefits of such a wide scope of application in the event of 

enforcement of the NBB’s pledge under the draft law, the ECB suggests including this simplified 

enforcement  procedure  in  a  separate  provision  of  the  draft  law  instead  of  in  Article  6,  as  this 

Article seems to limit the procedure to insolvency situations. 

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

Done at Frankfurt am Main, 3 August 2006. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

4  

5  

Article 8  of  the  Law  of  15  December  2004  on  financial  collateral  and  various  tax  provisions  in  relation  to  in  rem 
collateral arrangements and loans for financial instruments. 
See  also  paragraph  8  of  ECB  Opinion  CON/2005/43  of  3  November  2005  at  the  request  of  the  Belgian  Ministry  of 
Finance  on  a  draft  law  abolishing  bearer  securities  and  a  draft  royal  decree  concerning  dematerialised  corporate 
securities. 

5