Opinion of the European Central Bank of 3 November 2006 at the request of the Italian Ministry of Economic Affairs and Finance on a draft legislative decree exercising powers delegated under the Law on the protection of savings (CON/2006/51)
Date: 2006-11-03
Institutions: European Central Bank
Subjects: Italy, central bank, financial stability, financial supervision, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 3 November 2006  

at the request of the Italian Ministry of Economic Affairs and Finance  

on a draft legislative decree exercising powers delegated under the Law on the protection of savings 

(CON/2006/51) 

Introduction and legal basis 

On 25 September 2006 the European Central Bank (ECB) received a request from the Italian Ministry of 

Economic  Affairs  and  Finance  for  an  opinion  on  a  draft  legislative  decree  (hereinafter  the  ‘draft 

legislative  decree’),  which  is  to  be  adopted  in  exercise  of  powers  delegated  under  Article  43  of  Law 

No 262 of 28 December 2005 on the protection of savings (hereinafter ‘Law 262/2005’). 

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 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 draft legislative decree relates to the Banca d’Italia and rules applicable to 

financial institutions insofar as they materially influence the stability of financial institutions and markets. 

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 legislative decree 

1.1   Article  43  of  Law  262/2005  requires  that  coordination  measures  between  Law  262/05  and  the 

consolidated  Law  on  banking  (TUB),  the  consolidated  Law  on  finance  (TUF)  and  other  relevant 

special legislation be issued within one year of the entry into force of Law 262/2005.  

1.2   The  ECB  was  consulted  on  an  early  draft  of  Law  262/2005,  which  extensively  modified  the 

institutional framework for the regulation and supervision of financial markets and intermediaries 
in Italy, as well as on later amendments and certain implementation measures2.  

1.3   According to the explanatory memorandum, one of the main aims of the draft legislative decree is 

to ‘restore coherence to the system’ on the basis of the founding principles of the 2005 reform, in 

particular  the  principle  of  allocating  regulatory  and  supervisory  tasks  between  the  various 

1  
2  

OJ L 189, 3.7.1998, p. 42.  
See ECB Opinions: CON/2004/16 of 11 May 2004 at the request of the Italian Ministry of Economic affairs and Finance 
on  a  draft  law  on  the  protection  of  savings;  CON/2005/34  of  6  October  2005  at  the  request  of  the  Italian  Ministry  of 
Economy  and  Finance  on  an  amendment  to  the  draft  law  on  the  protection  of  savings  concerning  the  Banca  d’Italia; 
CON/2005/58 of 23 December 2005 at the request of the Italian Ministry of Economy and Finance on an amendment to 
the  draft  law  on  the  protection  of  savings  concerning  the  Banca  d’Italia;  and  CON/2006/44  of  25  August  2006  at  the 
request of the Banca d’Italia on the amended Statute of the Banca d’Italia.  

 
 
 
 
                                                 
authorities in accordance with those authorities’ objectives. The draft legislative decree does in fact 

further  clarify  and  improve  the  allocation  of  supervisory  powers  between  the  Banca  d’Italia,  the 

financial markets regulator (Commissione nazionale per le Società e la Borsa, CONSOB) and the 

insurance supervisory authority (Istituto per la Vigilanza sulle Assicurazioni Private e di Interesse 

Collettivo, ISVAP), in accordance with their specific supervisory purposes. 

1.4  The draft legislative decree also amends certain provisions regarding listed companies to enhance 

corporate governance mechanisms.    

1.5  Finally, in amending Law No 287 of 10 October 1990 on competition and fair trading (hereinafter 

‘Law  287/1990’)  and  Article  19  of  Law  262/2005,  the  draft  legislative  decree  also  revises  the 

institutional arrangements for coordination between the Banca d’Italia and the Italian Competition 

Authority (Autorità Garante della Concorrenza e del Mercato, AGCM).  

2. 

Refinement of the supervisory model 

2.1  The ECB welcomes the draft legislative decree as it further refines the Italian supervisory model. 

By  eliminating  possible  operational  problems  arising  from  overlapping  competences,  the  draft 

legislative  decree  aims  to  enhance  the  efficiency  and  effectiveness  of  the  overall  supervisory 

activity. 

2.2  The  Banca  d’Italia  will  remain  responsible  for  safeguarding  financial  stability  and  for  the 

prudential  regulation  and  supervision  of  credit  institutions  and  other  financial  intermediaries. 

CONSOB will be responsible for the overall transparency of financial markets, including conduct 

of business regulation of all financial intermediaries and corporate disclosure practices. The draft 
legislative decree rightly clarifies3 that bank deposits do not constitute financial products, which are 

subject  to  CONSOB’s  transparency  competence  pursuant  to  the  TUF,  and  streamlines  the 

application  of  investor  protection  rules  for  insurance  products  of  a  financial  nature.  Furthermore, 
Article 129 of the TUB is amended4 in accordance with the aim of giving CONSOB full powers in 

relation  to  investor  protection  and  the  transparency  of  financial  instruments.  Under  the  new 

provision, Banca d’Italia’s current task of authorising the issue or offer of financial instruments in 

Italy or  abroad  by  Italian entities  will  be  replaced  by  the power  to  seek  information,  for  the  sole 

purpose of monitoring financial markets. 

2.3 

In  particular,  the  ECB  welcomes  Article  1  of  the  draft  legislative  decree,  which  contains  several 

important amendments to the TUB. First, it provides that the Chairperson of the Interdepartmental 

Committee  for  Credit  and  Savings  (Comitato  Interministeriale  per  il  Credito  ed  il  Risparmio, 

CICR) may invite the chairpersons of supervisory authorities to take part in CICR meetings when 

topics  within  their  competence  will  be  discussed.  This  amendment  is  consistent  with  the 

requirement under Law 262/2005 to coordinate between the various supervisory authorities in the 

financial  sector.  However,  the  operational  independence  of  supervisory  authorities,  which  is  an 

3 
4 

See Article 3 of the draft legislative decree. 
See Article 1 of the draft legislative decree. 

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essential  and  internationally  recognised  standard,  should  be  safeguarded  by  avoiding  any 

interference  by  political  authorities  in  day-to-day  supervisory  activity.  In  this  respect,  the  role  of 

the CICR might need to be further clarified, given that regulation is to a large extent determined at 

Community  level  and  that  coordination  with  the  Government  is  subject  to  the  requirement  of 

professional  secrecy  of  banking  supervision  authorities.  Second,  the  Banca  d’Italia  is  given 

extensive regulatory powers, in accordance with CICR resolutions, to lay down the conditions and 

limits for banks’ assumption of risk activities in cases of possible conflicts of interest. Such cases 

are no longer explicitly described in the TUB and this will enhance the flexibility of the regulatory 

framework,  making  it  possible  to  take  future  developments  into  account,  and  ultimately  the 

effectiveness of supervisory action.  

3.   Relationship between the Banca d’Italia and the AGCM 

3.1  Articles 2 and 4 of draft legislative decree contain amendments to Article 20 of Law 287/1990 and 

Article  19  of  Law  262/2005  which  affect  the  powers  of  the  AGCM  and  its  relationship  with  the 

Banca  d’Italia.  These  provisions  are  welcome  as  they  comply  with  the  general  principles  of 

Community law in this area and follow the recommendations previously made by the ECB on this 
issue5.  The  draft  legislative  decree  confirms  that,  for  operations  which  constitute  a  bank  merger 

requiring  prior  notification,  the  AGCM  is  responsible  for  the  assessment  of  market  competition, 

while the Banca d’Italia retains the responsibility for assessing the compatibility of the merger with 

sound and prudent management. More specifically, the draft legislative decree clarifies two aspects 

relating to coordination between the two authorities. 

3.2  First,  Article  4  of  the  draft  legislative  decree  repeals  paragraphs  12  to  14  of  Article  19  of 

Law 262/2005,  which  provided  that  the  authorisations  of  the  AGCM  and  the  Banca  d’Italia 

concerning mergers and acquisitions involving banks should be adopted as a single measure. This 

clarification  is  welcome  as  it  follows  an  ECB  recommendation  to  maintain  a  clear  distinction 
between the two procedures6. 

3.3  Second,  the  new  paragraph  5bis  of  Article  20  of  Law  287/19907  provides  that,  notwithstanding 

competition concerns, the AGCM may, at the Banca d’Italia’s request, authorise: (a) an agreement, 

on  the  basis  of  the  operational  requirements  of  the  payments  system  and  provided  that  the 

authorisation  is  for  a  limited  period;  and/or  (b)  a  banking  merger  which  creates  or  reinforces  a 

dominant position, for reasons of the stability of one or more of the parties involved. However, the 

draft legislative decree contains an additional safeguard as Article 2 requires that such exceptional 

authorisations by the AGCM do not unduly restrain competition. The ECB welcomes the proposed 

arrangements,  which  balance  the  potentially  conflicting  objectives  of  market  competition  and 

5   
6 
7 

See paragraph 14 of Opinion CON/2004/16 and paragraphs 7 and 8 of Opinion CON/2005/58.   
See paragraph 8 of Opinion CON/2005/58. 
Introduced by Article 2 of the draft legislative decree. 

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financial  stability  by  introducing  safeguards  similar  to  those  which  apply  under  Community  law 

and follow previous ECB recommendations on this important subject.  

4.  

Liability regime 

The  ECB  takes  note  of  the  new  liability  regime  introduced  by  Article  4  of  the  draft  legislative  decree. 

This provision states that, in exercising their own control functions, the relevant supervision authorities 

and the members of their decision-making bodies and their employees will be liable for losses caused by 

wilful  misconduct  or  gross  negligence  (dolo  o  colpa  grave),  but  not  for  losses  caused  by  simple 
negligence (colpa)8. The provision is welcome as it is fully in line with the Core Principles for Effective 
Banking Supervision adopted by the Basel Committee on Banking Supervision9. 

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

Done at Frankfurt am Main, 3 November 2006. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

8  

9 

See  also  paragraph  4  of  ECB  Opinion  CON/2006/38  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.  
Available on the website of the Bank for International Settlements at www.bis.org. 

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