Opinion of the European Central Bank of 5 October 2007 at the request of the Portuguese Ministry of Finance and Public Administration on a draft decreelaw amending the legal framework of credit institutions and financial companies (CON/2007/29)
Date: 2007-10-05
Institutions: European Central Bank
Subjects: Portugal, central bank, competence of the institution, consumer protection, credit institution, financial stability, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 5 October 2007 

at the request of the Portuguese Ministry of Finance and Public Administration on a draft decree-

law amending the legal framework of credit institutions and financial companies 

(CON/2007/29) 

Introduction and legal basis 

On 6 August 2007 the European Central Bank (ECB) received a request from the Portuguese Ministry of 

Finance and Public Administration for an opinion on a draft decree-law amending the legal framework of 

credit institutions and financial companies (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 indent 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  Banco  de  Portugal.  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 is intended to enhance the consumer protection regime for transactions in financial 

products and services offered by entities supervised by the Banco de Portugal. More specifically, it 

will empower the Banco de Portugal to lay down rules on: (i) the conduct of credit institutions in 

their  dealings  with  customers,  namely  by  issuing  instructions  concerning  codes  of  conduct  to  be 

adopted  by  the  credit  institutions  and/or  industry  associations  and  by  establishing  guidelines  for 

this purpose; and (ii) the transparency of transactions in financial products and services. The draft 

law  will  also  give  the  Banco  de  Portugal  powers  to  impose  sanctions  in  case  of  breach  of  such 

rules.  

1.2   Furthermore, the draft law will empower the Banco de Portugal to lay down minimum information 

requirements  which  credit  institutions  will  have  to  comply  with  when  advertising  their  products 

and services to the public. The Banco de Portugal will be empowered to lay down mandatory rules 

1  

OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
                                                      
on the content of contracts between credit institutions and their customers and to impose penalties 

for breach, by credit institutions, with the rules on advertising issued by it. 

1.3   Finally,  the  draft  law  will  provide  for  an  additional  derogation  from  the  current  regime  for  data 

protection  and  professional  secrecy  which  applies  to  supervisory  authorities,  in  order  to  allow 

judges in criminal or insolvency proceedings to have access to confidential information held by the 

Banco de Portugal about credit liabilities and cheque users (payers).  

2. 

General observations 

2.1  As  regards  the  granting  of  new  consumer  protection  powers  to  the  Banco  de  Portugal,  the  ECB 

notes  that  the  new  tasks  described  in  paragraph  1.1  and  1.2  above  are  not  listed  among  the 

functions of national central banks (NCBs) as specified in the Statute of the European System of 

Central Banks and of the European Central Bank (the ESCB Statute). However, as pointed out on 
previous occasions2, and without prejudice to the Governing Council’s powers under Article 14.4 

of  the  ESCB  Statute,  the  ECB  does  not  consider  that  the  abovementioned  tasks  would  interfere 

with the objectives and tasks of the European System of Central Banks. 

2.2  Nonetheless,  pursuant  to  the  last  sentence  of  Article  14.4  of  the  ESCB  Statute,  these  new  tasks 

would have to be performed on the responsibility and liability of the Banco de Portugal, and would 

not be regarded as being part of the ESCB’s functions. 

2.3   The  ECB  understands  that  the  underlying  reason  for  allocating  the  above  tasks  to  the  Banco  de 

Portugal  is  linked  to  its  overall  responsibility  for  supervision  of  the  financial  market.  In  this 

context, the ECB considers that the new tasks may complement the Banco de Portugal’s existing 

supervisory  powers  and  thus  contribute  to  the  soundness  of  the  financial  market  and  the 

preservation of confidence in the marketplace.  

2.4  The  ECB  welcomes  the  allocation  of  new  powers  to  the  Banco  de  Portugal  with  the  aim  of 

ensuring  the  transparency  of  transactions  for  financial  services  and  products  offered  by  entities 

subject to its supervision, as this could improve the clarity and efficiency of the national regulatory 

framework while ensuring adequate consumer protection and a level playing field. The imposition 

of  specific  transparency  requirements  for  financial  transactions,  accompanied  by  effective 

monitoring  of  compliance  with  those  requirements,  should  allow  consumers  to  compare  more 

easily the different products and services on offer and could therefore enhance competition. 

2  

See ECB Opinion CON/2006/47 of 13 September 2006 at the request of the Czech Ministry of Industry and Trade on an 
amendment to the Law on Česká národní banka, 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, and ECB Opinion 
CON/2007/8 of 21 March 2007 at the request of the Czech Ministry of Industry and Trade on certain provisions of a draft 
law amending the Law on consumer protection relating to Česká národní banka. 

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2.5  As  previously  stated  by  the  ECB  with  regard  to  granting  similar  powers  to  other  NCBs3,  it  is 

important  to  ensure  that  both  prudential  supervision  and  investor/consumer  protection  have 

adequate and equal emphasis and that appropriate resources are available to ensure the performance 

of such functions. 

3. 

Specific observations 

3.1 

It is noted that, without prejudice to the rules applicable to complaints made to credit institutions, 

the customers of these institutions may submit complaints directly to the Banco de Portugal if there 

is breach of legislative or regulatory provisions governing their activities, as long as the complaint 

is  not  related  to  a  dispute  of  a  purely  contractual  nature  between  the  customer  and  the  credit 

institution.  Disputes  between  credit  institutions  and  their  customers  stemming  from  unregulated 

commercial practices, and complaints on any matter which has already been brought before a court 

of law or an arbitration tribunal will fall outside the scope of the Banco de Portugal’s intervention. 

3.2  However,  the  ECB  suggests  that  the  negative  competence  clause  in  Article  77-A(4)  may  not  be 

sufficient  to  avoid  a  potentially  large  volume  of  complaints,  even  though  it  specifically  aims  to 

tackle this risk. These new tasks and procedures broadly described under Article 77-A of the draft 

law are likely to require the Banco de Portugal to commit considerable resources, both human and 

financial. The ECB has consistently held the view that ‘Member States may not put their NCBs in 

the  position  of  not  having  sufficient  financial  resources  to  carry  out  their  ESCB  or  Eurosystem 
related tasks, as applicable’4.  

3.3  The ECB therefore expects that, when granting these additional powers to the Banco de Portugal, 

care  will  be  taken  to  ensure  that  the  Banco  de  Portugal’s  operational  capacity  to  carry  out 

Eurosystem-related tasks will not be affected. 

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

Done at Frankfurt am Main, 5 October 2007. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

3  
4 

See ECB Opinion CON/2006/38, ECB Opinion CON/2006/47 and ECB Opinion CON/2007/8.  
See e.g. the ECB’s Convergence Report 2004, p. 28, and similarly in the ECB’s Convergence Report December 2006, 
p. 27. 

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