Opinion of the European Central Bank of 28 November 2008 at the request of the Polish Minister for Finance on a draft law on the provision of State Treasury support to financial institutions (CON/2008/80)
Date: 2008-11-28
Institutions: European Central Bank
Subjects: Poland, Treasury, credit guarantee, financial institution, financial risk, financial stability, liquidity control

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 28 November 2008 

at the request of the Polish Minister for Finance  

on a draft law on the provision of State Treasury support to financial institutions 

(CON/2008/80) 

Introduction and legal basis 

On 10 November 2008 the European Central Bank (ECB) received a request from the Polish Minister for 

Finance for an opinion on a draft law on the provision of State Treasury support to financial institutions 

(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 (Narodowy Bank Polski, (NBP)) 

and contains 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  aims  at  re-establishing  appropriate  liquidity  conditions  in  the  financial  market  by 

enabling the Minister for Finance to use, until 31 December 2009, a number of measures with the 
aim  of  providing  State  Treasury  support  to  financial  institutions2  (hereinafter,  the  ‘support 

measures’).  The  draft  law  specifies  five  categories  of  financial  institutions  established  in  Poland 
eligible  to  benefit  from  the  support  measures:  banks3,  investment  funds,  investment  fund 
associations4, brokerage houses and insurance companies5.  

1  
2  
3  

4  

OJ L 189, 3.7.1998, p. 42. 
See Articles 1 and 18 of the draft law. See the explanatory memorandum to the draft law, p. 1. 
Credit institutions registered in Poland are legally referred to as ‘banks’ (this definition does not cover the Polish version 
of  credit  unions,  operating  pursuant  to  the  Law  of  14  December  1995  on  cooperative  savings  and  loan  associations 
(Dz. U. of 4 January 1996 No 1, Item 2, as amended)). The term ‘credit institutions’ as used in Polish law only relates to 
European  Economic  Area  (EEA)  credit  institutions  from  outside  Poland.  Non-EEA  credit  institutions  are  referred  to 
under Polish law as ‘foreign banks’ (Article 2, Article 4(1), Article 4(3) and Articles 4(17) to (20) of the Law on banking 
of 29 August 1997 (consolidated text: Dz.U. of 12 June 2002 No 72, Item 665, as amended).  
An  investment  fund  has  a  legal personality  under  Polish  law  but  may  only  be  represented  through  an  investment  fund 
association (which is a special type of joint stock company, normally administrating a number of investment funds with 

 
 
 
 
                                                 
1.2  The  draft  law  provides  for  the  following  types  of  support  measures,  of  which  the  first  two  are 

available to banks only6: 

(i) 

a  State  guarantee  for  the  repayment  of  the  refinancing  credit  extended  to  a  bank  by  NBP, 

under  the  conditions  set  out  in  Article  42(4)  of  the  Law  on  Narodowy  Bank  Polski  of 
29 August  1997  (hereinafter  the  ‘Law  on  NBP’)7.  Such  a  State  guarantee  may  cover  up  to 

50% of the amount of the NBP’s refinancing credit remaining to be paid. It is to be granted 

at the request of NBP’s President, by means of an agreement between the Finance Minister 
and the beneficiary bank8; 

(ii)   a  State  guarantee  for  the  repayment  of  the  credit  facility  or  loan  provided  within  a  line  of 

credit extended by a bank to another bank, in which case the State guarantee is granted at the 

request of the banks concerned by means of an agreement between the Finance Minister and 
the beneficiary bank9; 

(iii) 

loans of Treasury securities to financial institutions, at the request of the financial institution 
concerned 10; and  

(iv)  preferential sales of Treasury securities to financial institutions, involving deferred payment, 

payment  in  instalments  or  a  sale  directed  to  a  specified  institution,  at  the  request  of  the 
financial institution concerned11.  

All  support  measures  are  granted  by  the  Minister  for  Finance,  following  consultation  with  the 
Financial  Supervision  Commission  and  the  NBP’s  President12.  The  Minister  for  Finance  may 

require  the  beneficiary  institution  to  provide  collateral  covering  the  obligation  to  repay  the  full 
amount of the support, including interest13. 

2. 

General observations  

2.1  The  ECB  recalls  that  it  is  important  for  national  authorities  to  coordinate  their  responses  to  the 

current  financial  situation  with  their  EU  partners.  Given  the  similarities  of  the  causes  and 

consequences  of  the  financial  crisis  across  Member  States  and  the  potential  interdependencies  of 

policy  responses,  the  ECB  notes  that  coordination  is  already  taking  place  at  the  European  and 

various  investment  models);  see  Articles  3(1),  4(1)  and  4(2)  of  the  Law  on  investment  funds  (Dz.U.  of  28  June  2004 
No 146, Item 1546, as amended). 
Article 2 of the draft law. 
See Article 3(2) of the draft law. 
Consolidated text: Dz.U. of 1 April 2005 No 1, item 2, as amended. See further description of the conditions specified in 
Article 42(4) of Law on NBP in paragraph 4.2(ii) of this opinion. 
See Article 3(1)(1) and Article 4 of the draft law. 
See Article 3(1)(1) and Article 5 of the draft law. 
See Article 3(1)(2)and Article 10 of the draft law. 
See Article 3(1)(3) to (5) and Articles 11 to 13 of the draft law. 
See Article 16(4) of the draft law. 
See Article 3(3) and (4) of the draft law. 

5  
6  
7  

8  
9  
10  
11  
12  
13  

2 

 
                                                                                                                                                             
international level to restore confidence and preserve financial stability. More specifically, the ECB 

refers to: 

(i) 

the  conclusions  adopted  at  the  Ecofin  meeting  on  7 October  2008,  which  highlighted 

common principles to guide the action of Member States as follows: (i) interventions should 

be  timely  and  the  support  should  in  principle  be  temporary;  (ii)  the  interests  of  taxpayers 

should  be  protected;  (iii)  existing  shareholders  should  bear  the  due  consequences  of  the 

intervention;  (iv)  the  government  should  be  in  a  position  to  bring  about  a  change  of 

management; (v) management should not retain undue benefits; (vi) governments may have, 

inter alia, the power to intervene in remuneration; and (vii) legitimate interest of competitors 

must  be  protected,  in  particular  through  the  State  aid  rules,  and  negative  spill-over  effects 
should be avoided14; 

(ii) 

the ‘Declaration on a concerted European action plan of the euro area countries’, adopted on 

12 October 2008 by the Heads of States of the euro area, as subsequently endorsed by the 

European  Council  on  16  October  2008  for  all  Member  States  (hereinafter  ‘the  Paris 
Declaration’)15. In the Paris Declaration, the Member States confirmed their commitment to 

act  together  in  a  decisive  and  comprehensive  way  in  order  to  restore  confidence  and  the 

proper functioning of the financial system, with the aim of restoring appropriate and efficient 

financing conditions for the economy. They agreed on common principles to be followed by 

the  EU  governments,  central  banks  and  supervisors  to  avoid  national  measures  adversely 

affecting  the  functioning  of  the  single  market  and  the  other  Member  States.  The  Paris 

Declaration further states that Member States have to act in a coordinated manner to avoid 

significant  differences  in  national  implementation  having  a  counter-productive  effect, 

creating  distortions  in  global  banking  markets.  In  this  context,  the  need  to  work  in 

cooperation  with  the  ECB  was  also  emphasised.  Against  this  background,  the  ECB  has 

repeatedly highlighted that all the initiatives put in place by national governments to restore 

confidence in financial markets should be aimed at implementing such common principles, 
in a spirit of close cooperation with other Member States and EU institutions16.  

2.2  The ECB wishes to draw the consulting authority’s attention to the recent ECB opinions issued at 

the  request  of  other  Member  States,  whereby  the  ECB  has  commented  on  legislative  proposals 
sharing  some  of  the  features  of  the  Polish  scheme17.  It  is  the  ECB’s  intention  to  facilitate 

14  

15  
16  

17  

the  press  release  of 

the  Council’s  website, 

the  2894th  Council  meeting  (13784/08),  available  on 

See 
www.consilium.europa.eu. 
See the Declaration of 12 October 2008, available on the French Presidency’s website at www.ue2008.fr. 
Cf., for example, paragraph 2.4 of ECB Opinion CON/2008/44 of 3 October 2008 at the request of the Irish Minister for 
Finance  on  a  draft  Credit  Institutions  (Financial  Support)  Bill  2008;  paragraph  2.2  of  ECB  Opinion  CON/2008/46  of 
8 October  2008  at  the  request  of  the  Belgian  Ministry  of  Finance  on  a  preliminary  draft  law  on  measures  promoting 
financial  stability  and  in  particular  establishing a  State  guarantee  for  the  provision  of  credit  in  the  context  of  financial 
stability. 
See, for example, ECB Opinion CON/2008/48 of 15 October 2008 at the request of the Irish Minister for Finance on a 
draft Credit Institutions (Financial Support) Scheme 2008; ECB Opinion CON/2008/50 of 17 October 2008 at the request 
of the Belgian Ministry of Finance on a draft royal decree adopted under Article 117bis of the Law of 2 August 2002 on 
the supervision of the financial sector and on financial services; ECB Opinion CON/2008/52 of 17 October 2008 at the 

3 

                                                 
coordination  of  the  various  national  efforts  addressing  the  current  financial  situation,  inter  alia, 
through the timely adoption and publication of ECB opinions on such draft national legislation18. 

3. 

Specific observations 

3.1  Eligibility for support 

Article 2 of the draft law provides that support measures will be available to financial institutions 

established  in  Poland  and  falling  within  one  of  the  covered  categories,  which,  inter  alia,  implies 

that Polish subsidiaries of financial institutions established in other Member States are covered by 

the  draft  law.  The  ECB  welcomes  the  above  provision,  as  it  avoids  the  preferential  treatment  of 
specific financial institutions and a possible distortion of the level playing field19. 

3.2 

Scope and remuneration of State guarantees 

As regards the support measures in the form of State guarantees under Articles 4 to 8 of the draft 

law,  the  ECB  considers  that  the  proposed  arrangements  in  their  practical  implementation  should 

aim at: (i) addressing the funding problems of liquidity-constrained solvent banks by improving the 

functioning of the market for bank debt of longer term maturity; (ii) preserving the level playing 

field  among  financial  institutions  and  avoiding  market  distortions;  and  (iii)  ensuring  consistency 
with  NBP’s  liquidity  management20.  The  ECB  makes  the  following  specific  comments  in  this 

regard:  

(i) 

The ECB considers that further clarification is needed in the draft law as regards the type of 

liabilities that the State guarantees may cover. In particular, the ECB notes that the draft law 

does  not  explicitly  exclude  interbank  deposits  from  among  the  obligations  that  may  be 

secured with a State guarantee. In this respect, the ECB recalls that State guarantees to cover 

interbank deposits should be avoided as they have the potential to interfere with the conduct 

of the central bank’s liquidity-providing operations, and thus on the transmission of NBP’s 
monetary policy decisions21. The ECB considers that State guarantees to be provided under 

the  draft  law  may  have  an  economic  character  of  guarantees  for  the  repayment  of  the 

interbank deposits if the guarantee is provided for the repayment of an unsecured loan drawn 

request of the Spanish State Secretary for Economic Affairs on a Royal Decree-Law creating a Fund for the acquisition of 
financial assets and on a Royal Decree-Law adopting urgent financial and economic measures in relation to the concerted 
European action plan of the euro area countries; ECB Opinion CON/2008/54 of 17 October 2008 at the request of the 
Danish Ministry of Economic and Business Affairs on a proposed Law on financial stability; ECB Opinion CON/2008/55 
of 20 October 2008 at the request of the Austrian Ministry of Finance on draft legal measures to ensure the stability of the 
Austrian financial market; ECB Opinion CON/2008/56 of 21 October 2008 at the request of the Banque de France on a 
draft  amending  finance  law  for  the  financing  of  the  economy,  ECB  Opinion  CON/2008/57  of  21  October  2008  at  the 
request  of  the  German  Ministry of  Finance  on  a  Law  on  the  implementation  of  a  package  of  measures  to  stabilise  the 
financial market and an order on its implementation and ECB Opinion CON/2008/62 of 29 October 2008 at the request of 
the Swedish Ministry of Finance on a draft ordinance on State guarantees for banks, etc. All ECB opinions are available 
on the ECB website at www.ecb.europa.eu. 
All ECB opinions are available on the ECB’s website at: www.ecb.europa.eu. 
Cf., for example, paragraph 3.2 of Opinion CON/2008/57. 
Cf., for example, paragraph 2.1.2 of Opinion CON/2008/62. 
Cf., for example, paragraph 3.2 of Opinion CON/2008/50 and paragraph 2.3 of Opinion CON/2008/54. 

18  
19  
20  
21  

4 

  
 
 
                                                                                                                                                             
by the borrower bank. This may be the case, in particular, for guarantees provided (i) under 

Article  4(1)  of  the  draft  law  together  with  Article  42(4)  (1)  of  the  Law  on  NBP  for  the 

repayment  of  NBP’s  refinancing  credit  in  the  form  of  an  unsecured  line  of  credit;  and 

(ii) under Article 5(1) of the draft law for the repayment of unsecured interbank loans arising 

from the lines of credit. The ECB recommends that provision of State guarantees which have 

the economic characteristics of guarantees for deposits be avoided. 

(ii)   The  ECB  also  notes  that  the  Paris  Declaration  states  that  the  Member  State  governments 

would  make  available  a  State  guarantee  with  regard  to  new  medium  term  (up  to  5  years) 

bank senior debt issuance. The ECB understands that the draft law  empowers the Minister 

for Finance to provide State guarantees on the basis of the agreements to be entered into until 

the  end  of  2009,  while  the  maximum  time  limit  for  guaranteed  obligations  remains 
undefined22. The ECB recommends that the draft law be amended to ensure full compliance 
with the Paris Declaration’s criteria in this respect23. 

(iii)  Article  8  of  the  draft  law  provides  for  a  fee  that  may  be  charged  on  a  beneficiary  bank  in 

connection  with  the  provision  of  the  State  guarantee,  the  level  of  which  is  to  be  set  in  the 

relevant agreement. In this respect, the ECB points out that the fee charged in respect of the 

provision  of  the  State  guarantee  should  be  risk-based  and  determined  on  the  basis  of  the 

costs  of  a  corresponding  guarantee  under  normal  market  conditions.  For  the  sake  of 

transparency, a further more precise indication should be given on the method to be used to 

calculate the fees. The ECB recalls in this respect that it is of crucial importance to ensure 

harmonisation  of  the  price  for  such  guarantees  within  the  EU,  to  ensure  a  level  playing 
field24. Moreover, the ECB understands that the fees under Article 8(1) of the draft law are to 

be imposed on the beneficiaries of the support measures, and that no such fee will be charged 

to  NBP,  even  though  it  is  the  party  which  formally  requests  the  State  guarantee  to  be 
provided in respect of the repayment of the NBP’s own refinancing credit25. Similarly, the 

ECB  understands  that  NBP  will  not  be  requested  to  establish  collateral  in  connection  with 

the provision of a State guarantee under Article 3(3) of the draft law. For the sake of clarity 

and  legal  certainty,  the  ECB  recommends  that  the  draft  law  should  expressly  refer  to  the 

beneficiary institution as the party which is obliged to pay the fee under Article 8(1) of the 

draft  law,  and  which  may  be  required  to  provide  collateral  under  Article  3(3)  of  the  draft 

law. 

22  
23  
24  
25  

See Article 18 of the draft law and comment to this Article in the explanatory memorandum to the draft law.  
See, for example, paragraphs 3.4-3.5 of Opinion CON/2008/55. 
See, for example, paragraph 2.1.3 of Opinion CON/2008/62. 
See, however, Article 16(1) and the introductory part of the explanatory memorandum to the draft law which both suggest 
that a request for provision of the support measures is in all cases submitted by the applicant institution. 

5 

                                                 
3.3   Conditions of support 

According  to  the  provisions  of  the  Paris  Declaration,  and  as  noted  in  past  ECB  opinions26,  the 

support provided under the draft law should be designed in order to avoid any distortion in the level 

playing field and possible abuse at the expense of non-beneficiaries. The ECB notes that the draft 

law  provides  that  the  specific  conditions  for  granting  the  support  in  relation  to  beneficiary 

institutions will be decided by the Minister for Finance and set out in an agreement to be entered 
into with such institutions (potentially on the basis of the pre-defined framework agreement)27. The 

explanatory  memorandum  to  the  draft  law  clarifies  that  such  contractual  conditions  may  include 

rules regarding: (i) the manner of application of the received support, whereby it is envisaged, in 

particular,  that  the  beneficiary  institution  will  be  obliged  to  only  use  the  funds  obtained  for 

covering funding needs directly related to its ongoing business; and (ii) the beneficiary institution’s 

necessary financial discipline, whereby, in particular, limitations are envisaged as regards executive 

remuneration and dividend payouts. The ECB recommends inclusion in the draft law of the main 

principles according to which contractual conditions for the use of support measures will be set, in 

accordance with the abovementioned Paris Declaration criteria. In the same vein, the ECB would 

welcome the inclusion in the draft law of more specific conditions which would have to be satisfied 

before the Minister for Finance could partially waive the repayment of support under Article 14 of 

the draft law.  

3.4  As  a  general  remark,  in  line  with  its  previous  opinions28,  the  ECB  reiterates  the  importance  of 

ensuring  that  the  regulatory  practice  under  the  proposed  arrangements  will  be  conducted  in  full 

compliance  with  the  relevant  Community  law  provisions,  including  EU  single  market  principles 

and financial services legislation, as well as competition and State aid rules. In the latter respect, 

the ECB draws the consulting authority’s attention to the Commission’s recently adopted guidance 
on compliance by the financial sector support schemes with EU State aid rules29, which includes in 

the specific context of the provision of State guarantees, detailed rules on the setting of eligibility 
criteria for the beneficiary institutions30.  

26  
27 
28  
29  

30  

See, for example, paragraph 3.5 of Opinion CON/2008/57.  
See Articles 8(2) and 16(4) of the draft law. 
See, for example, paragraph 3.3 of Opinion CON/2008/57. 
See  the  ‘Communication  from  the  Commission  –  The  application  of  State  aid  rules  to  measures  taken  in  relation  to 
financial  institutions  in  the  context  of  the  current  global  financial  crisis’  of  13  October  2008,  available  on  the 
Commission’s website at www.ec.europa.eu (hereinafter the ‘Commission’s guidance’). 
See paragraph 18 of the Commission’s guidance, specifying that ‘The eligibility criteria of financial institutions … must 
be  objective,  taking  due  account  of  their  role  in  the  relevant  banking  system  and  the  overall  economy,  and  non-
discriminatory  so  as  to  avoid  undue  distortive  effects  on  neighbouring  markets  and  the  internal  market  as  a  whole.  In 
application  of  the  principle  of  non  discrimination  on  the  grounds  of  nationality,  all  institutions  incorporated  in  the 
Member State concerned, including subsidiaries, and with significant activities in that Member State should be covered 
by the scheme’. 

6 

 
                                                 
4.   Role of NBP and the monetary financing prohibition 

4.1  NBP’s role under the draft law is as follows: (i)  pursuant to Article 4(2) of the draft law, NBP’s 

President  makes  a  formal  request  to  the  Minister  for  Finance  for  a  State  guarantee  covering  the 
repayment of an NBP’s refinancing credit31; and (ii) pursuant to Article 16(4) of the draft law, NBP 

is  consulted,  along  with  the  Financial  Supervision  Commission  (FSC),  on  the  Minister  for 

Finance’s decision to use supporting measures in relation to a given institution. The ECB notes that 

the  precise  scope  of  advice  to  be  provided  by  the  FSC  and  by  NBP  is  not  specified  and 

recommends that more specific provisions are included in the draft law in this respect, in particular 

as  regards  the  body  assessing  the  compliance  of  the  beneficiary  institution  with  the  conditions 

linked  to  the  support  measures  provided.  As  a  general  point,  the  ECB  expects  that  all  the 

abovementioned functions to be performed by NBP will be conducted in a manner fully compatible 

with NBP’s institutional and financial independence, as a safeguard for the proper performance of 

its  tasks  under  the  Treaty  and  the  Statute  of  the  European  System  of  Central  Banks  and  of  the 

European Central Bank. It is therefore expected that the involvement of NBP will not go beyond an 

advisory  and  procedural  role  and,  in  particular,  that  it  will  fully  comply  with  the  monetary 
financing prohibition laid down in Article 101(1) of the Treaty32, interpreted in line with Council 

Regulation (EC) No 3603/93 of 13 December 1993 specifying definitions for the application of the 
prohibitions referred to in Articles 104 and 104b(1) of the Treaty33. 

4.2 

In this context, specifically as regards the support measure provided for under Article 4 of the draft 

law,  i.e.  State  guarantees  for  the  repayment  of  NBP’s  refinancing  credit  extended  under 

Article 42(4) of the Law on NBP, the ECB notes that NBP’s refinancing credit may be extended 

under  this  provision:  (i)  as  a  line  of  credit  open  for  the  specified  amount,  or  (ii)  as  a  ‘lombard 

facility’, i.e. against pledges of securities, up to an amount corresponding to a specified proportion 

of the face value of such securities; or (iii) in other forms, as specified by the NBP Management 

Board.  The  ECB  further  notes  that  a  refinancing  credit  in  the  form  of  a  lombard  facility  may  be 
used by NBP in the function of providing emergency liquidity assistance (ELA)34. The ECB recalls 

that  ELA  as  a  central  bank  task  consists  of  liquidity  assistance  provided  by  central  banks  in 

exceptional  circumstances  and  on  a  case-by-case  basis  to  temporarily  illiquid  but  solvent 
institutions35. It is also noted that, under Article 237(d) of the Treaty, the ECB is entrusted with the 

31  
32  
33  
34  

35  

See, however, a restriction in footnote 25 of this opinion. 
See paragraph 3.2 of Opinion CON/2008/52. 
Now Article 101 and Article 103(1) of the Treaty, respectively, OJ L 332, 31.12.1993, p. 1. 
See  NBP  Management  Board  Resolution  No  44/2008  of  13  October  2008  (Dz.  Urz.  NBP  of  15  October  2008  No  16 
Item 19) amending the NBP Management Board Resolution resolution No 4/2008 of 1 February 2008 introducing ‘Rules 
of  refinancing  with  the  lombard  credit  granted  by  Narodowy  Bank  Polski’  (Dz.  Urz.  NBP  of  12  February  2008  No  3 
Item 3, hereinafter the ‘Lombard credit rules’). Paragraph 2 of the amending resolution introduces a new paragraph 2a to 
Lombard  credit  rules,  envisaging  a  possibility  of  provision  ‘in  justified  cases’  of  the  lombard  facility  against  types  of 
collateral other than bonds and bills issued by the State Treasury or NBP. The lombard credit is normally to be repaid on 
the operational day following the day of issuance of the lombard credit, but NBP may agree on a longer repayment period 
(see paragraph 7(1) to (2) of Lombard credit rules). 
See the ECB Financial Stability Review, December 2006, p. 171 and the ECB’s Annual Report 1999, p. 98. It is also the 
ECB’s  view  that  ‘national  legislation  foreseeing  the  financing  by  NCBs  [national  central  banks]  of  credit  institutions 
other  than  in  connection  with  central  banking  tasks  (such  as  monetary  policy,  payment  systems  or  temporary  liquidity 

7 

                                                 
task  of  monitoring  the  compliance  of  all  ESCB  central  banks  with  the  prohibition  on  monetary 
financing36. 

4.3  

In the above context, the ECB understands that Article 4(1) of the draft law introduces an explicit 

legal  basis  for  the  provision  of  State  guarantees  securing  the  repayment  of  NBP’s  refinancing 

credit, including in cases where such credit is provided as ELA. As stated by the ECB in another 
opinion37, the following criteria need to be met to ensure that the extension by the ESCB central 

banks  of  ELA  secured  by  a  State  guarantee  comply  with  the  monetary  financing  prohibition. 

First, the  central  bank  needs  to  independently  exercise  full  discretion  regarding  the  decision 

whether  to  extend  ELA  in  exceptional  circumstances.  The  ECB  understands  that  such  decision 
would be the sole responsibility of NBP’s Management Board38. The ECB is of the view that the 

same degree of independence should be exercised by NBP in this respect as in the performance of 

its ESCB-related tasks. Explicit provisions to this effect could be considered, by analogy with other 
draft  national  provisions  directly  addressing  the  extension  of  ELA  by  ESCB  central  banks39. 

Second, it should be ensured that the credit provided by the NBP is as short term as possible. The 

ECB would welcome any clarification in this regard, at least in the explanatory memorandum to the 

draft  law.  Third,  there  must  be  systemic  stability  aspects  at  stake.  In  the  present  case,  the  ECB 

understands  that  the  granting  of  the  above  credit  would  be  part  of  the  NBP’s  contribution  to  the 

stability  of  the  financial  system.  The  ECB  reiterates  its  earlier  recommendation  that  NBP’s 
financial stability function should be expressly recognised in the Law on NBP40. Fourth, there must 

be no doubts as to the legal validity and enforceability of the State guarantee under Polish law. In 

this respect, the ECB welcomes the fact that the establishment of the State guarantee is enshrined in 

the draft law and expects that set-off mechanism foreseen by Article 6(2) of the draft law will not 
impede  effective  enforcement  of  the  NBP’s  claims41.  Fifth,  there  must  be  no  doubts  as  to  the 

economic adequacy of the State guarantee, which should cover both principal and interest on the 

loans, thus fully preserving NBP’s financial independence. Any lack of clarity in the draft law, e.g. 

as regards the party obliged to pay fees, needs to be eliminated. Further, where the State guarantee 

would  constitute  the  sole  form  of  collateral  for  the  ELA  operation,  it  is  essential  that  the  State 

support operations), in particular to support insolvent credit and/or other financial institutions, is incompatible with the 
monetary financing prohibition’ (see the ECB’s May 2006 Convergence Report, p. 68; the December 2006 Convergence 
Report,  p.  30;  the  May  2007  Convergence  Report,  p.  22  and  the  May  2008  Convergence  Report,  p.  24,  which  are 
available on the ECB’s website at www.ecb.europa.eu). 
See paragraph 4.1 of Opinion CON/2008/46. 
See Paragraph 4.3 of Opinion CON/2008/46. 
See Article 17(3)(2) of the Law on NBP stipulating that NBP’s Management Board performs such functions as are not 
restricted for other NBP governing bodies. 
See paragraph 4.11 of the ECB Opinion CON/2008/42 of 10 September 2008 at the request of the Banque centrale du 
Luxembourg on amendments to the draft law improving the legislative framework for Luxembourg as a financial centre 
and  amending  the  Law  of  23  December  1998  on  monetary  status  and  on  the  Banque  centrale  du  Luxembourg;  see 
paragraph 3.3 of Opinion CON/2008/46. 
See  paragraph  2.2  of  the  ECB  Opinion  CON/2008/39  of  1  September  2008  at  the  request  of  the  Polish  Minister  for 
Finance on a draft law on the Financial Stability Committee. 
Article 6(2) of the draft law foresees that collateral provided by the debtor and realised by NBP is to be deducted from 
the scope of the State guarantee. 

36  
37  
38  

39  

40  

41  

8 

                                                                                                                                                             
guarantee  covers  100%  of  the  amount  of  the  credit,  and  not  only  up  to  50%  of  the  amount 

remaining for repayment, as stated in the draft law. 

4.4  Finally,  for  the  sake  of  completeness,  the  ECB  recalls  its  stance  as  expressed  in  the  ECB’s 
Convergence Report42 with respect to Article 42(3) of the Law on NBP, which is outside the scope 

of the present draft law and which allows NBP’s refinancing credit to be granted for the purposes 

of implementing bank rehabilitation proceedings. The ECB noted in this regard that ‘safeguards … 

aiming  at  ensuring  timely  repayment  of  the  credit  do  not  fully  exclude  an  interpretation  of  legal 

provisions that would allow an extension of refinancing credit to a bank undergoing rehabilitation 

proceedings  which  then  becomes  insolvent.  More  explicit  safeguards  are  needed  to  avoid 

incompatibility  with  the  monetary  financing  prohibition  under  Article  101  of  the  Treaty’.  In  the 

present opinion, the ECB reiterates that compliance with Article 101 of the Treaty is a necessary 

element of the regulation of the refinancing credit. The obligation of ensuring such compliance is 
binding on the Polish authorities as of the date of Poland’s EU accession, i.e. 1 May 200443. 

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

Done at Frankfurt am Main, 28 November 2008. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

42  
43  

See the ECB’s Convergence Report of December 2006, p. 228 and the ECB’s Convergence Report of May 2008, p. 244. 
See the ECB’s Convergence Report of May 2008, p. 22. 

9