Opinion of the European Central Bank of 14 February 2007 at the request of the Irish Department of Finance on a draft law on asset covered securities (CON/2007/3)
Date: 2007-02-14
Institutions: European Central Bank
Subjects: Ireland, capital market, financial stability, national law, securities

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 14 February 2007 

at the request of the Irish Department of Finance 

on a draft law on asset covered securities 

(CON/2007/3) 

Introduction and legal basis 

On 25 January 2007 the European Central Bank (ECB) received a request from the Irish Department of 

Finance  for  an  opinion  on  the  draft  Asset  Covered  Securities  (Amendment)  Bill  2007  (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 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 law relates to a national central bank 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 law 

The  draft  law  mainly  represents  a  technical  update  and  modernisation  of  the  Asset  Covered  Securities 

Act 2001 (the ‘2001 Act’), which established the legislative foundations for the launch in 2003 of an Irish 

asset-covered securities market. 

2. 

General observations 

2.1  The ECB has no specific comments regarding the draft law. 

2.2   The ECB recalls that, when consulted on the 2001 Act, the ECB noted ‘that the legislation has been 

explicitly  designed  by  the  Irish  Government  to  bring  Ireland  in  line  with  best  practices  in  other 

European  financial  centres,  taking  into  account  that  the  introduction  of  the  euro  and  the  new 

monetary policy framework have led to the development of an integrated and competitive money 

market  in  the  euro  area…  The  ECB  considers  that  the  Irish  Government’s  initiative  will  make  a 

1  

OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
 
                                                 
positive contribution to the integration of capital markets in the euro area’2. In this respect, the ECB 

is pleased to note the positive evolution of this market since 2003, which has seen the issuance in 

the  international  capital  markets  of  both  mortgage  and  public  credit-covered  securities  involving 

domestic  Irish  mortgage  credit  portfolios,  as  well  as  euro-denominated  public  credit  portfolios 

whose underlying borrowers are located throughout the euro area. 

3. 

Implementing measures 

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

Done at Frankfurt am Main, 14 February 2007. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

2  

ECB  Opinion  CON/2001/6  of  25  April  2001  at  the  request  of  the  Irish  Department  of  Finance  on  a  draft  legislative 
proposal on a Mortgage and Public Credit Bond Bill, paragraph 4. 

2