Opinion of the European Central Bank of 25 March 2009 at the request of the Belgian Ministry of Finance on a draft law amending the Law of 2 August 2002 on the supervision of the financial sector and on financial services (CON/2009/29)
Date: 2009-03-25
Institutions: European Central Bank
Subjects: Belgium, State aid, central bank, financial stability, financial supervision, guarantee, monetary crisis, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 25 March 2009 

at the request of the Belgian Ministry of Finance 

on a draft law amending the Law of 2 August 2002 on the supervision of the financial sector and on 

financial services 

(CON/2009/29) 

Introduction and legal basis 

On  18  March  2009  the  European  Central  Bank  (ECB)  received  a  request  from  the  Nationale  Bank  van 

België/Banque Nationale de Belgique (NBB), acting on behalf of the Belgian Ministry of Finance, for an 

opinion on a draft law amending the Law of 2 August 2002 on the supervision of the financial sector and 

on  financial services  (hereinafter  the  ‘draft  law’). Given  the  current  turbulence  in  the  financial  markets 

and the need for firm intervention by the authorities involved, the consulting authority has requested the 

ECB to provide its opinion as a matter of extreme urgency to allow the swift adoption of 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  on  the  sixth  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 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 

In the context of the current financial market crisis, the draft law extends in two respects the scope 

of the measures that, under Article 117bis of the Law of 2 August 2002 on the supervision of the 
financial  sector  and  on  financial  services2,  the  King  is  empowered  to  take,  after  consulting  the 

1  
2  

OJ L 189, 3.7.1998, p. 42.  
Concerning  Article  117bis  of  the  Law  of  2  August  2002,  see  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,  in  particular 
paragraphs 1.1, 2.1 and 5; and 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, in particular paragraph 2.1. All ECB opinions are available on the ECB website 
at www.ecb.europa.eu. 

 
 
 
 
                                                 
Financial  Stability  Committee,  in  the  event  of  a  sudden  crisis  on  the  financial  markets  or  of  a 

serious threat of systemic crisis, in order to limit the scale or effects thereof. 

1.2  First, the draft law adds three legislative acts to the list of financial sector legislation which can be 

complemented or derogated from by regulations adopted by the King. These three legislative acts 
govern in particular the holding of dematerialised and immobilised securities3. The draft law will 

allow the King to amend these legislative acts in order to enhance the protection of depositors of 

dematerialised  or  fungible  financial  instruments  held  with  a  financial  intermediary  that  becomes 

insolvent with regard to certain legal risks revealed in the context of the current financial crisis and 
in particular by the Lehman bankruptcy4. 

1.3 

Second,  the  draft  law  provides  that,  in  addition  to  guarantees  for  the  liabilities  of  supervised 
institutions5, the King may also establish a system to grant the guarantee of the Belgian State for: 

(i)  

certain  claims  (schuldvorderingen/créances)  held  by  supervised  financial  institutions6. 

Reference  is  made,  for  example,  to  the  loans  granted  by  Fortis  Bank  to  a  special  purpose 
vehicle established to acquire part of its structured products portfolio7; 

(ii)  

the repayment to natural persons who are partners of a cooperative company (coöperatieve 

vennootschapp/société  cooperative)  of  their  shares  in  such  a  company,  provided  it  is  a 
supervised institution or that at least half of its assets are invested in a supervised institution8. 

The aim of this provision is to ensure that the shares issued by such cooperative companies 

enjoy similar protection to that put in place for other substitutes for savings (i.e. deposits and 
‘branche  21’  insurance  products9)  insofar  as  such  shares  have  the  same  characteristics  as 

savings (i.e. offering a regular return and guaranteeing the repayment of the invested capital 
on demand, subject to limited constraints)10.  

3  

4  
5 

6 
7  
8 
9  

10 

New  Article  117bis,  first  subparagraph  1°,  of  the  Law  of  2  August  2002.  These  legislative  acts  are:  (i)  the  Law  of 
2 January 1991 on the market in public debt securities and on the monetary policy instruments; (ii) Book VIII, Title III, 
Chapter  II,  Section  III  of  the  Companies  Code;  and  (iii)  Royal  Decree  No  62  on  the  deposit  of  fungible  financial 
instruments  and  the  settlement  of  transactions  involving  such  instrument  coordinated  by  the  Royal  Decree  of 
27 January 2004. 
Explanatory memorandum, comment on the new Article 117bis, first subparagraph 1°, of the Law of 2 August 2002. 
Current Article 117bis, first subparagraph, (2°), of the Law of 2 August 2002, which is the legal basis for (i) the Royal 
Decree  of  16  October  2008  (see  Opinion  CON/2008/50),  and  for  the  Royal  Decree  of  10  December  2008  (see  ECB 
Opinion CON/2008/74 of 21 November 2008 at the request of the Belgian Ministry of Finance on a draft royal decree on 
the guarantee for certain risks assumed by financial institutions), which is to be amended shortly (on the draft amending 
royal decree see ECB Opinion CON/2009/25 of 19 March 2008 at the request of the Belgian Ministry of Finance on a 
draft  royal  decree  amending  the  Royal  Decree  of  10  December  2008  on  the  guarantee  for  certain  risks  assumed  by 
financial institutions). 
New Article 117bis, first subparagraph 2°, of the Law of 2 August 2002. 
Explanatory memorandum, comment on the new Article 117bis, first subparagraph 2°, of the Law of 2 August 2002. 
New Article 117bis, first subparagraph 3°, of the Law of 2 August 2002. 
See ECB Opinion CON/2008/61 of 28 October 2008 at the request of the Belgian Minister for Finance on a draft royal 
decree implementing the Law of 15 October 2008 on measures promoting financial stability and in particular establishing 
a State guarantee for the provision of credit in the context of financial stability, in relation to the protection of deposits 
and life insurance and amending the Law of 2 August 2002 on the supervision of the financial sector and on financial 
services. 
Explanatory memorandum, comment on the new Article 117bis, first subparagraph 3°, of the Law of 2 August 2002. 

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(iii)  

losses  incurred  by  supervised  institutions  on  certain  assets  (e.g.  in  the  context  of  an  asset 
protection scheme, losses on a portfolio of toxic assets that exceed a certain threshold)11 or 

liabilities  taken  on  by  entities  whose  business  is  to  acquire  and  manage  assets  held  by 

supervised  institutions  (e.g.  a  guarantee  granted  to  a  ‘bad  bank’,  a  special  purpose  vehicle 
created  to  acquire  a  portfolio  of  toxic  assets  held  by  supervised  institutions)12.  These  two 

amendments  are  justified  by  the  fact  that  similar  measures  have  been  put  in  place  or  are 

currently being considered in other countries and by the similarity of market expectations in 
different countries13. 

(iv)  

the liabilities taken on by Gemeentelijke Holding NV/Holding Communal SA14. 

2.   General observations 

2.1  The ECB has already delivered opinions on several elements of the general rescue package put in 
place by the Belgian authorities in response to the current turbulence in the financial markets15. All 

the  comments  and  recommendations  made  in  its  previous  opinions  given  in  this  context,  and 

especially in Opinion CON/2008/46 and Opinion CON/2008/50, apply equally to the draft law.  

2.2  As a general matter, it is important to ensure that the draft law and any subsequent implementing 

royal decrees fully comply with the relevant provisions of Community law, including competition 

and State aid rules. In particular, it is important that national authorities should seek to coordinate 

their responses to the current financial situation with their European Union partners. This is in line 

with  the  Declaration  of  12 October  2008  on  a  concerted  European  action  plan  of  the  euro  area 

countries made at the summit of the euro area Member States in Paris, which stressed the need for 

the Member States to ‘act in a united manner and avoid that national measures adversely affect the 
functioning  of  the  single  market  and  the  other  Member  States’16.  Certain  instruments  have  been 

adopted with the aim of guiding Member States when designing support measures to alleviate the 
tensions on the financial markets that can be relevant in the context of the draft law17 and the ECB 

11  

12  

13  

14  
15  

16  
17 

New  Article  117bis,  first  subparagraph  4°,  of  the  Law  of  2  August  2002  and  the  comment  on  this  provision  in  the 
Explanatory memorandum. 
New  Article  117bis,  first  subparagraph  5°,  of  the  Law  of  2  August  2002  and  the  comment  on  this  provision  in  the 
Explanatory memorandum. 
Explanatory  memorandum,  comment  on  the  new  Article  117bis,  first  subparagraph  4°  and  5°,  of  the  Law  of 
2 August 2002. 
Article 117bis, first subparagraph 6°, of the Law of 2 August 2002. 
The ECB has been consulted by the Belgian authorities on six other draft legislative provisions adopted in this context: 
(i)  Opinion CON/2008/46; (ii) Opinion CON/2008/50; (iii) Opinion CON/2008/61; (iv) Opinion CON/2008/74; (v) ECB 
Opinion CON/2008/91 of 22 December 2008 at the request of the Belgian Ministry of Justice on a draft law aimed at 
enhancing  the  rules  on  the  functioning  of  company  bodies,  in  particular  by  introducing  into  the  Companies  Code 
provisions regarding a corporate governance statement and the establishment of a remuneration committee, by limiting 
severance  payments  for  certain  company  representatives  and  by  reforming  the  system  of  statutory  disabilities  in  the 
banking and financial sector; and (vi) Opinion CON/2009/25. 
See the Declaration of 12 October 2008, available on the website of the French Presidency, www.ue2008.fr. 
See  (i)  the  Recommendations  of  the  Governing  Council  of  the  European  Central  Bank  on  government  guarantees  for 
bank  debt,  20  October  2008,  available  on  the  ECB’s  website  at  www.ecb.europa.eu;  (ii)  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,  (OJ  C  270,  25.10.2008,  p.  8);  (iii)  the  Eurosystem’s  Guiding  principles  for  bank  asset 

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recommends the consulting authority to take these into account when adopting measures pursuant 

to  the  enabling  clauses  in  the  draft  law  in  order  to  ensure  the  existence  of  a  level  playing-field 

within  the  euro  area.  It  is  noted,  in  this  respect,  that  royal  decrees  adopted  pursuant  to 

Article 117bis  of  the  Law  of  2  August  2002  are  subject  to  the  duty  to  consult  the  ECB  under 

Article 105(4) of the Treaty when they fall within the ECB’s advisory competences. 

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

Done at Frankfurt am Main, 25 March 2009. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

support  schemes,  25  February  2009;  and  (iv)  Commission  Communication  of  25  February  2009  on  the  treatment  of 
impaired assets in the Community banking sector. 

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