Opinion of the European Central Bank of 18 June 2007 at the request of the Italian Ministry of Economic Affairs and Finance on a draft law on the regulation and supervision of markets and the functioning of the competent independent authorities (CON/2007/17)
Date: 2007-06-18
Institutions: European Central Bank
Subjects: Italy, central bank, financial stability, financial supervision, market supervision, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 18 June 2007 

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

on a draft law on the regulation and supervision of markets and the functioning of the competent 

independent authorities  

(CON/2007/17) 

Introduction and legal basis 

On  14  May  2007  the  European  Central  Bank  (ECB)  received  a  request  from  the  Italian  Ministry  of 

Economic Affairs and Finance for an opinion on a draft law on the regulation and supervision of markets 

and the functioning of the competent independent authorities (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  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 law 

1.1  The draft law was approved by the Italian Council of Ministers on 2 February 2007 and submitted 

to  the  Parliament  on  5  March  2007.  It  is  currently  being  discussed  by  the  competent  Senate 

committees. This opinion is based on the version of the draft law that the consulting authority sent 

to the ECB with its consultation request. The ECB notes that the preparation of the draft law is a 

dynamic process, whereby amendments may still be introduced. It stands ready to comment on any 

such amendments to the extent possible.  

1.2  The aims of the draft law are to strengthen the existing legislative framework as regards the Italian 

authorities  for  the  regulation  and  supervision  of  markets,  to  fill  current  lacunae  and  to  eliminate 

overlapping  jurisdictions.  In  particular,  as  regards  the  financial  sector,  the  draft  law  further 

modifies  the  institutional  supervisory  framework  in  Italy  and  represents  another  step  in  the 

direction  of  the  refinement  of  the  Italian  supervisory  model  on  the  basis  of  allocating  regulatory 

and supervisory tasks to authorities in accordance with their objectives. The ECB has already been 

1 

OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
                                                 
consulted  previously  on  other  Italian  draft  legislative  provisions  which  had  as  their  aim  the 
establishment of a functional supervisory model2.  

2. 

Refinement of the supervisory model 

2.1 

In  general,  the  draft  law  further  refines  the  current  functional  supervisory  system  regarding  the 

financial sector. The Istituto per la Vigilanza sulle Assicurazioni Private e di Interesse Collettivo 

(ISVAP, the insurance supervisory authority) and the Commissione di vigilanza sui fondi pensione 

(COVIP,  the  pension  funds  authority)  will  be  abolished  by  legislative  decrees  which  must  be 

adopted  within  one  year  from  the  date  of  entry  into  force  of  the  draft  law.  These  two  bodies’ 

existing tasks and duties are allocated to the Banca d’Italia and the Commissione nazionale per le 

Società e la Borsa (CONSOB, the National Commission for Companies and the Stock Exchange), 

in accordance with their respective objectives. As a result, as stated in Article 7 of the draft law, 

there will be two supervisory authorities: the Banca d’Italia, which will be responsible for matters 

relating  to  the  stability  of  financial  institutions,  and  CONSOB,  which  will  be  responsible  for 

matters  relating  to  the  transparency  of  the  market  and  the  propriety  of  conduct.  Moreover,  the 

Ufficio  Italiano  dei  Cambi  (UIC,  the  Italian  Foreign  Exchange  Office)  will  be  liquidated  and  its 

functions and assets attributed to the Banca d’Italia. 

2.2  The ECB confirms its positive assessment of this supervisory model, which involves a functional 
division of responsibilities for supervising the financial sector3, and welcomes the draft law’s aim 

of enhancing the model’s efficiency and effectiveness. First, the proposed institutional framework 

is oriented towards recognising the essential role of the central bank in promoting the safety and 

soundness of financial institutions and the stability of the financial system as a whole. Second, the 

chosen approach fully recognises the emergence of financial groups that provide different types of 

financial services and the need to address prudential concerns relating to such groups in a highly 

coordinated  manner.  However,  careful  attention  should  be  paid  to  some  elements  of  the  new 

institutional framework, as further specified below. 

2.3  The  ECB  notes  that  the  Comitato  Interministeriale  per  il  Credito  ed  il  Risparmio  (CICR, 

Interdepartmental Committee for Credit and Savings) is proposed to be abolished and that the tasks 

and  duties  assigned  to  it  by  the  consolidated  Law  on  Banking  (TUB)  will  be  allocated  to  the 

Ministry of Economic Affairs and Finance and the Banca d’Italia by means of legislative decrees 

(which  must  be  adopted  within  one  year  from  the  date  of  entry  into  force  of  the  draft  law).  The 

ECB  recalls  its  previous  request  for  a  clarification  of  CICR’s  role,  in  particular  with  a  view  to 

2 

3 

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; CON/2006/44 of 25 August 2006 at the request of the Banca d’Italia on 
the amended Statute of the Banca d’Italia; and CON/2006/51 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. 
See  ECB  Opinion  CON/2004/21  of  7  June  2004  at  the  request  of  the  Ministry  of  Finance  of  the  Netherlands  on  a  draft 
Financial Sector Supervision Act. 

2 

 
 
                                                 
safeguarding  the  operational  independence  of  supervisory  authorities,  which  is  an  essential  and 
internationally  recognised  standard4.  The  ECB  therefore  welcomes  the  specific  reference  to 

‘ensuring the independence of supervisory activities’ in Article 10(1)(g) as regards the matters to 

be specified by subsequent legislative decrees, which will regulate in detail the transfer of powers 

and  resources  between  authorities  and  coordinate  between  existing  laws  concerning  financial 

intermediaries and markets. The ECB stands ready to provide a further assessment of such matters 

when  consulted  on  these  legislative  decrees.  However,  the  reference  in  Article  1(3)  to  the 

‘functions  for  the  general  direction  and  for  the  high  supervision  of  the  Government  and  of  the 

Ministers’ in relation to the matters referred to in the draft law, particularly in connection with the 

cross-reference to this provision in Article 9(4), might merit further clarification to safeguard the 

independence of supervisory authorities. 

2.4  Furthermore, the ECB welcomes the improved accountability of supervisory action introduced by 

Article  18  of  the  draft  law,  which  establishes  a  duty  for  supervisory  authorities  to  consult 

stakeholders, give reasons for their decisions and explain the consequences of their actions. Indeed, 

supervisory  independence  must  be  accompanied  by  clear  accountability  as  regards  the  action 

undertaken by the authorities. The ECB also notes that Article 21 of the draft law establishes an ad-

hoc  bicameral  committee,  to  which  all  authorities  will  present  annual  reports,  and  welcomes  the 

explicit prohibition of any interference by this committee in day-to-day supervision.  

2.5 

In  addition,  in  line  with  the  experience  of  other  EU  Member  States,  Article  9  of  the  draft  law 

establishes a new Committee for Financial Stability (CFS), composed of the Minister for Economic 

Affairs  and  Finance  (who  will  chair  the  CFS),  the  Banca  d’Italia’s  Governor  and  CONSOB’s 

President. The ECB welcomes the establishment of the CFS, as it responds to the need to promote 

financial  stability  and  take  coordinated  action  in  financial  crises  that  may  have  an  impact  on  the 

entire financial system. The establishment of such coordination at national level is also in line with 

recommendations made at EU level. However, the ECB considers that the tasks attributed to such 

committees must not compromise the central bank’s independence, in particular with regard to the 

preservation  of  the  stability  of  the  financial  system  and  crisis  management,  which  may  directly 
concern certain central bank functions5.  

3. 

The UIC 

3.1  The  ECB  notes  that  the  UIC’s  tasks  and  duties  will  in  the  future  be  performed  by  the  Banca 

d’Italia,  including  responsibility  for  anti-money  laundering  measures,  which  will  be  assigned  in 
particular  to  the  Financial  Analysis  Service6.  Moreover,  an  Anti-Money  Laundering  Committee 

4 
5 

6  

On this issue, see paragraph 10 of ECB Opinion CON/2004/16 and paragraph 2.3 of ECB Opinion CON/2006/51. 
See paragraph 11 of ECB Opinion CON/2002/13 of 24 April 2002 at the request of the Belgian Ministry of Finance on a 
draft proposal for a law on prudential supervision of the financial sector and financial services. 
Article 12 of the draft law. 

3 

 
 
                                                 
will be established within the Ministry of Economic Affairs and Finance7. The ECB welcomes that 

the Committee will be established for coordination purposes only, without affecting the Financial 

Intelligence Unit’s independence. 

3.2  The fact that the UIC and its tasks will be absorbed by the Banca d’Italia will constitute a transfer 

of  additional  powers  to  a  national  central  bank  (NCB).  The  ECB  has  always  made  clear  that 

‘Member  States  may  not  put  their  NCBs  in  a  position  where  they  have  insufficient  financial 
resources to carry out their ESCB- or Eurosystem-related tasks, as applicable’8. The ECB therefore 

expects  that,  in  implementing  the  new  structure,  care  will  be  taken  to  ensure  that  the  Banca 
d’Italia’s operational capacity to carry out Eurosystem-related tasks will not be affected9. 

3.3  Directive  2005/60/EC  of  the  European  Parliament  and  of  the  Council  of  26  October  2005  on  the 

prevention  of  the  use  of  the  financial  system  for  the  purpose  of  money  laundering  and  terrorist 
financing10  requires  that  Member  States  ensure  that  their  Financial  Intelligence  Unit  ‘has  access, 

directly  or  indirectly,  on  a  timely  basis,  to  the  financial,  administrative  and  law  enforcement 

information  that  it  requires  to  properly  fulfil  its  tasks’.  The  Italian  legislation  implementing 

Directive  2005/60/EC  will  therefore  have  to  ensure  that  the  Banca  d’Italia  is  entrusted  with  such 

powers,  in  order  to  be  able  to  request  and  receive  all  necessary  information  from  the  institutions 
and persons covered by that Directive11. 

4. 

Relationship between the Banca d’Italia and the Competition Authority  

Article  14(5)  of  the  draft  law  provides  that,  in  the  event  of  a  merger  in  the  banking  sector,  the  Banca 

d’Italia must issue a non-binding opinion within 30 days of receiving the relevant documentation. In the 

event  of  non-compliance  with  this  obligation,  the  Autorità  Garante  della  Concorrenza  e  del  Mercato 

(AGCM, the Competition Authority) may adopt its decision without it. The ECB welcomes this solution, 

which  reflects  the  principle  of  allocating  powers  to  authorities  in  accordance  with  their  respective 
objectives and maintains a clear distinction from the merger authorisation process12. 

5. 

The Banca d’Italia’s ownership structure 

5.1  Pursuant to Article 14(6) and (7) of the draft law, upon a proposal by the Minister for Economic 

Affairs and Finance, the Government is delegated the power to adopt, within one year from the date 

7 

8 
9 

10 
11 
12 

Article 11 of the draft law. See also paragraph 9 of ECB Opinion CON/1998/35 at the request of the Italian Ministry of 
the Treasury, Budget and Economic Planning under Articles 109f (6) and 109l (2) of the Treaty establishing the European 
Community,  Article  5.3  of  the  Statute  of  the  European  Monetary  Institute  and  Council  Decision  93/717/EC  of 
22 November 1993 on a draft legislative decree implementing Article 108 of the Treaty concerning the Ufficio Italiano 
dei Cambi. 
See e.g. the ECB’s Convergence Report 2007, p. 19. 
See  paragraph  2.3  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.  
OJ L 309, 25.11.2005, p. 15. 
See Articles 21 and 22 of Directive 2005/60/EC. 
On this issue, see paragraph 14 of ECB Opinion CON/2004/16, paragraphs 7 and 8 of ECB Opinion CON/2005/58 and 
Section 3 of ECB Opinion CON/2006/51. 

4 

 
 
 
                                                 
of entry into force of the draft law, a legislative decree redefining the criteria for participation in the 

Banca  d’Italia’s  capital  and  introducing  limits  on  the  possession  of  participation  shares,  as  a 

guarantee  of  the  Banca  d’Italia’s  independence,  as  well  as  criteria  for  the  remuneration  of 

participation shares, having regard to the public nature of the functions exercised.  

5.2.  The ECB reiterates what it has already stated in this regard in past opinions, in particular the need 

for  the  modified  ownership  structure  to  comply  with  central  bank  independence  and  the  public 

nature of the Banca d’Italia. It expects to be consulted by the Italian Government on the relevant 
draft legislative decree13. 

6. 

Compatibility with Article 14.2 of the Statute of the European System of Central Banks and 

of the European Central Bank 

Article 16(6) of the draft law provides for a penalty of ‘termination’ if a member of the board of any of 

the  authorities  referred  to  in  the  draft  law  breaches  the  rules  regarding  conflicts  of  interest.  The  ECB 

would point out that Article 14.2 of the Statute contains an exhaustive list of the grounds for dismissal of 

Governors and other members of NCB decision-making bodies who are involved in the performance of 

ESCB-related  tasks.  Therefore,  to  avoid  any  incompatibility  with  Community  law,  the  ECB  strongly 

recommends  that  Article  16(6)  of  the  draft  law  is  listed  in  Article  16(8)  of  the  draft  law  as  one  of  the 

provisions which do not apply to Banca d’Italia. 

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

Done at Frankfurt am Main, 18 June 2007. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

13 

See paragraphs 8 and 10 of ECB Opinion CON/2005/34, paragraph 5 of ECB Opinion CON/2005/58 and paragraph 3.1 
of ECB Opinion CON/2006/44. 

5