Opinion of the European Central Bank of 23 October 2009 on the extension of State Treasury support to financial institutions (CON/2009/82)
Date: 2009-10-23
Institutions: European Central Bank
Subjects: Poland, State aid, Treasury, financial institution, financial stability, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 23 October 2009 

on the extension of State Treasury support to financial institutions  

(CON/2009/82) 

Introduction and legal basis 

On 13 October 2009 the European Central Bank (ECB) received a request from the Polish Minister for 

Finance for an opinion on a draft law  amending the 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  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 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 amends the Law of 12 February 2009 on the provision of State Treasury support to 
financial institutions2 (hereinafter the ‘Law of 12 February 2009’) on which the ECB was consulted 
at  the  drafting  stage  in  November  20083.  The  Law  of  12  February  2009  introduced  a  scheme 
whereby  various  support  measures  were  offered  to  eligible  financial  institutions4,  including: 

(i) State guarantees for the repayment of refinancing credit (extended to a bank by Narodowy Bank 

Polski) or a credit facility or loan provided within a line of credit (extended by a bank to another 

bank); (ii) loans of Treasury securities; and (iii) preferential sales of Treasury securities to financial 

institutions. Under the provisions currently in force, the support measures are available to eligible 
financial institutions until 31 December 20095.  

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5  

OJ L 189, 3.7.1998, p. 42. 
As published in Dziennik Ustaw of 2009 No 39, Item 308. 
See Opinion CON/2008/80; all ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 
The Law of 12 February 2009, as adopted by the Parliament, specified six categories of financial institutions established 
in  Poland  that  were  eligible  for  the  support  measures:  banks,  credit  unions,  investment  funds,  brokerage  houses, 
insurance companies and pension funds. 
Article 20(1) and (2) of the Law of 12 February 2009. 

 
 
 
 
                                                 
1.2  Since the Polish Government intends to ‘prepare for further potential consequences of the  global 
financial crisis …’6, the aim of the draft law is to extend the deadline by which eligible financial 
institutions may apply for support to 31 December 20107. At the same time, attention is drawn in 

the explanatory memorandum to the fact that ‘granting support under the Law must be preceded by 
a  notification  of  the  scheme  to  the  Commission’8,  and  that  under  the  existing  State  aid  approval 
support measures may be applied until 25 March 20109. Hence, the draft law introduces a provision 
under which the extension will apply from when the Commission’s State aid approval is granted10. 

1.3  The  draft  law  does  not  change  the  conditions  of  support,  the  criteria  by  which  the  eligibility  of 

financial institutions is assessed or any parameters of the support scheme other than the deadline by 

which eligible financial institutions may apply for support. 

2. 

Specific observations 

2.1 

Interaction of the draft law with monetary policy decisions 

2.1.1  Since the aim of the draft law is to extend the scope of the support scheme laid down in the Law of 

12 February 2009 on which the ECB has already been consulted, the ECB would like to reiterate 

certain  points  mentioned  in  its  Opinion  CON/2008/80  that  are  important  from  the  perspective  of 

monetary policy. 

2.1.2  First,  the  ECB  notes  that  the  Law  of  12  February  2009  does  not  explicitly  exclude  interbank 

deposits from among the obligations that may be secured with a State guarantee. Although the draft 

law  amends  the  Law  of  12  February  2009,  the  ECB  understands  that  it  does  not  include 

amendments  which  explicitly  exclude  interbank  deposits.  In  this  respect,  the  ECB  reiterates  its 

view 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 have an 
impact on the transmission of Narodowy Bank Polski’s monetary policy decisions11. 

2.1.3  Second, the ECB understands that the Law of 12 February 2009 introduces an explicit legal basis 

for  the  provision  of  State  guarantees  securing  the  repayment  of  Narodowy  Bank  Polski’s 

refinancing  credit,  including  in  cases  where  such  credit  is  provided  as  emergency  liquidity 
assistance (ELA). In this context the ECB would like to reiterate12 that, in order to ensure that the 

extension  by  national  central  banks  of  ELA  secured  by  a  State  guarantee  complies  with  the 

monetary financing prohibition, it is essential that the State guarantee covers 100 % of the amount 

6  
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12  

See the explanatory memorandum to the draft law, p. 1. 
Article 20(1) of the Law of 12 February 2009, as amended by Article 1(1) of the draft law. 
See the explanatory memorandum to the draft law, p. 1. 
Case No N 208/2009, approval granted on 25 September 2009 for a period of six months from that date.  
See Article 1(2) of the draft law, adding a new paragraph 3 in Article 20 of the Law of 12 February 2009. 
See sub-paragraph 3.2(i) of Opinion CON/2008/80; see also, for example, paragraph 3.2 of Opinion CON/2008/50 and 
paragraph 2.3 of Opinion CON/2008/54. 
See paragraph 4.3 of Opinion CON/2008/80. 

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of  the  credit  where  such  guarantee  would  constitute  the  sole  form  of  collateral  for  the  ELA 

operation, and not only up to 50 % of the amount remaining for repayment, as stated in the Law of 
12 February 200913. 

2.2  Temporary nature of the scheme 

In line with the conclusions of the Ecofin Council of 7 October 2008 and the Declaration issued by 

the Heads of State of the euro area on 12 October 2008, the ECB notes that harmonisation of the 

measures implemented at national level is  essential to ensure the integration of financial  markets 

within  the  European  Union.  In  this  regard,  the  ECB  emphasises  that  coordination  regarding  the 

duration of national financial support schemes  across the EU is of crucial importance in order to 
ensure a level playing field14. In addition, the ECB stresses the need for national support measures 
to be temporary in nature15. It is therefore assumed that the temporary nature of the support scheme 

introduced  under  the  Law  of  12  February  2009  is  essentially  maintained  under  the  draft  law  and 

that the involvement of the Polish State will be limited in time. 

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

Done at Frankfurt am Main, 23 October 2009. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

13  
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15 

See Article 4(2) of the Law of 12 February 2009. 
See ECB Opinions CON/2009/24, paragraph 3.1, CON/2009/54, paragraph 2.5.2 and CON/2009/73, paragraph 3.2. 
See ECB Opinions CON/2009/24, paragraph 2.2, CON/2009/62, paragraph 3.3 and CON/2009/73, paragraph 3.2. 

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