Opinion of the European Central Bank of 15 June 2007 at the request of the Greek Ministry of Economy and Finance on certain provisions of a draft law on the taking up and pursuit of the business of credit institutions, the sufficiency of own funds of credit institutions, undertakings providing investment services and other provisions (CON/2007/15)
Date: 2007-06-15
Institutions: European Central Bank
Subjects: Greece, credit institution, financial stability, financial supervision, national law, payment system

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 15 June 2007 

at the request of the Greek Ministry of Economy and Finance  

on certain provisions of a draft law on the taking up and pursuit of the business of credit 

institutions, the sufficiency of own funds of credit institutions, undertakings providing 

investment services and other provisions  

(CON/2007/15) 

Introduction and legal basis 

On  25  April  2007  the  European  Central  Bank  (ECB)  received  a  request  from  the  Greek  Ministry  of 

Economy and Finance for an opinion on certain provisions of a draft law on the taking up and pursuit of 

the  business  of  credit  institutions,  the  sufficiency  of  own  funds  of  credit  institutions,  undertakings 

providing investment services and other provisions (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, 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 draft law relates to a national central bank, payment and settlement systems 

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  implements  Directive  2006/48/EC  of  the  European  Parliament  and  of  the  Council  of 
14 June  2006  relating  to  the  taking  up  and  pursuit  of  the  business  of  credit  institutions  (recast)2  and 

Directive  2006/49/EC  of  the  European  Parliament  and  of  the  Council  of  14 June  2006  on  the  capital 
adequacy of investment firms and credit institutions (recast)3. The draft law complements the soon to be 

adopted amendments to the Bank of Greece’s Statute, with the aim of providing for acceptance of credit 

claims  as  eligible  collateral,  in  line  with  the  Eurosystem’s  single  list  of  eligible  collateral  for  credit 

1  
2  
3  

OJ L 189, 3.7.1998, p. 42.  
OJ L 177, 30.6.2006, p. 1. 
OJ L 177, 30.6.2006, p. 201. 

 
 
 
 
                                                 
operations4 (hereinafter the ‘single list’). The draft provisions on which the ECB was consulted concern: 

(i) supervision, in particular its costs and sanctions; (ii) the provision of collateral to the Bank of Greece 

in the context of the exercise of monetary policy, especially as a consequence of the introduction of the 

single list; and (iii) the liability regime. 

2. 

Costs of supervision 

Article 86 of the draft law provides that the costs of auditing should be borne by the supervised credit and 

financial institutions. It empowers the Bank of Greece to determine the nature and extent of the costs, as 

well  as  criteria  on  the  basis  of  which  such  costs  may  be  differentiated  by  category  of  supervised 

institutions or audited activities. The ECB welcomes the fact that financial supervision will be financed 

by supervised institutions, since this would further enhance the Bank of Greece's financial soundness. 

3. 

Provision of collateral to the Bank of Greece 

3.1  The  draft  law  makes  clear  that  the  Bank  of  Greece  accepts  credit  claims  as  collateral  in  order  to 

secure  its  claims  arising  out  of  monetary  policy  operations  and  the  provision  of  intraday  credit. 

Such  credit  claims  will  fulfil  the  Eurosystem’s  eligibility  criteria  for  collateral  following  the 

introduction of the single list. 

3.2 

In  connection  with  the  above,  the  draft  law  stipulates  that  announcement  to  a  debtor  of  the 

establishment  of  collateral  (including  a  pledge)  provided  by  a  credit  institution  in  favour  of  the 

Bank  of  Greece  or  another  central  bank  of  the  Eurosystem,  in  the  context  of  monetary  policy 

operations or the provision of intraday liquidity on its claims from a bank loan or a credit of any 

kind  granted  to  the  debtor,  takes  priority  over  any  subsequent  announcement  or  registration  of 

collateral  on  the  same,  already  collateralised  claim.  This  is  to  ensure  that  collateral  consisting  of 

credit claims in favour of the Eurosystem that have not been registered in the public books pursuant 

to  Law  2844/2000  still  take  priority  over  subsequent  collateral  on  the  same  claims  registered 

therein, if the debtor has been notified of the provision of collateral to the Eurosystem prior to such 

registration.  Hence,  with  specific  regard  to  collateral  consisting  of  credit  claims  established  in 

favour of the Eurosystem, priority is not determined on the basis of the time of registration in the 

public  books,  but  a  more  flexible  approach  has  been  adopted,  in  line  with  the  Eurosystem 

procedures. The ECB therefore welcomes these provisions of the draft law. 

3.3  Regarding  Article  89,  which  provides  for  additional collateral  coverage  within  two  working  days 

for cases where the claims are not covered by the pledge, it is noted that such collateral coverage 

should be fulfilled at all times. The debtor should be obliged to supplement the additional collateral 

immediately  so  that  at  the  end  of  the  business  day  sufficient  collateral  coverage  is  restored. 

Therefore, it is suggested to amend the wording of this article. 

4  

See ECB Opinion CON/2007/13 of 8 May 2007 at the request of the Bank of Greece on amendments to its Statute. 

2 

 
 
 
                                                 
3.4  Regarding Article 90 on the amendment of Law 2789/2000, the legislator is invited to clarify the 

wording of Article 90(2), in order to extend to the ECB or another central bank of the Eurosystem 

the possibility of an off-the-stock-market sale of collateral. 

4. 

Publication of sanctions  

Article 69(4) of the draft law provides for publication of the Bank of Greece’s decisions on the imposition 

of  sanctions,  in  order  to  ensure  transparency  in  the  market.    The  ECB  welcomes  the  reference  to  the 

stability of the financial markets in this paragraph: the Bank of Greece can only publish a decision on the 

imposition of sanctions if it considers that such publication is not related to the supervisory requirements 

set out in the draft law and is not likely to create a risk of serious disruption of the financial markets or 

disproportionate loss to interested parties. Such publication is accompanied by sufficient safeguards. 

5.   Liability regime 

The ECB also welcomes Article 69(5) of the draft law, which adequately reflects the Core Principles for 
Effective  Banking  Supervision  adopted  by  the  Basel  Committee  on  Banking  Supervision5  by  requiring 

protection from personal and institutional liability for supervisory actions taken by bodies and staff of the 
Bank of Greece in good faith in the course of performing their supervisory duties6. 

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

Done at Frankfurt am Main, 15 June 2007. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

5 
6 

Available on the Bank for International Settlements’s website at www.bis.org. 
See also paragraph 3.4 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. 

3