Opinion of the European Central Bank of 10 December 2009 on the extension of the Austrian State guarantees for the interbank market (CON/2009/99)
Date: 2009-12-10
Institutions: European Central Bank
Subjects: Austria, State aid, financial institution, guarantee, interbank market, national law, payment system

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 10 December 2009 

on the extension of the Austrian State guarantees for the interbank market 

(CON/2009/99) 

Introduction and legal basis 

On 3 December 2009, the European Central Bank (ECB) received a request from the Austrian Ministry 

for Finance for an opinion on a draft law amending the Law on the strengthening of the interbank money 

market (hereinafter the ‘draft law’). 

The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the 

Functioning of the European Union 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 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  The  draft  law  amends  the  Law  on  the  strengthening  of  the  interbank  money  market  of 
26 October 2008  on  which  the  ECB  was  consulted  in  the  same  month2.  The  Interbank  Market 

Support Act enabled the use of certain financial instruments to revive the interbank money market, 

namely empowering the Minister for Finance to (i) provide State guarantees to a newly established 

clearing  house  (Oesterreichische  Clearingbank  AG)  that  borrows  from  financial  institutions  and 

lends at a market rate to eligible financial institutions; and (ii) act as guarantor for bonds issued by 

eligible financial institutions. The amount available for both measures is EUR 65 billion. Under the 

provisions  currently  in  force,  the  Minister  for  Finance  may  issue  State  guarantees  until 

31 December 2009.  

1.2 

In  order  to  temporarily  maintain  the  support  scheme  the  Austrian  Government  intends  to  extend 

this deadline to 31 December 2010. In the explanatory memorandum to the draft law it is stated that 

the temporary extension of the deadline will be notified to the European Commission for approval. 

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2  

OJ L 189, 3.7.1998, p. 42. 
See ECB Opinion CON/2008/55; all ECB opinions are published on the ECB’s website at www.ecb.europa.eu.  

 
 
 
 
                                                            
1.3  The draft law does not amend the conditions under which (i) the clearing house may borrow and 

lend  funds  to  eligible  financial  institutions;  (ii)  the  Minister  for  Finance  may  provide  a  State 

guarantee to the clearing house for its lending and borrowing operations; and (iii) the Minister for 

Finance may act as guarantor for eligible financial institutions that issue securities for refinancing 

operations.  

2.  General observations 

2.1  The ECB notes that on 14 October 2009, the Ministry for Finance consulted the ECB on measures 

to  improve  liquidity  and  increase  the  competitiveness  of  credit  institutions.  The  ECB  adopted  its  
opinion on the same on 28 October 20093. In the meantime, the measures were amended and now 

include the draft law. The Austrian authorities consulted the ECB on the amended measures only 

on request and at a late stage of the legislative process and the ECB would therefore like to reiterate 

that national authorities are under a duty to consult it on draft legislative provisions falling within 

its  fields  of  competence  at  a  point  in  the  legislative  process  which  affords  it  sufficient  time  to 

examine these provisions. Only in cases of extreme urgency may the time limit be reduced under 

Article  3(2)  of  Decision  98/415/EC.  Indeed,  it  follows  from  Article  3(4)  of  Decision  98/415/EC 

that  Member  States  are  obliged  to  suspend  the  process  of  adoption  of  such  provisions  pending 

receipt  of  the  ECB’s  opinion,  as  the  adopting  national  authority  should  have  the  opportunity  to 
meaningfully deliberate the ECB’s opinion prior to prior to adoption4. 

2.2  The  ECB  also  draws  attention  to  the  guidance  provided  by  the  Ecofin  Council  to  the  Member 
States in the Conclusions of its meeting of 7 October 20085, and to the Declaration issued by the 
Heads of State of the euro area on 12 October 2008 (hereinafter the ‘Declaration’)6. The principles 

contained  in  the  Declaration  and  the  Conclusions  of  the  Ecofin  Council  were  endorsed  by  the 
European Council of 15 to 16 October 20087. In particular, the ECB stresses that any initiative put 

in place by the competent national authorities to restore confidence in the national segments of the 

euro  area  financial  markets  should  be  coordinated  and  should  aim  to  implement  the  common 

principles  in  question,  in  a  spirit  of  close  cooperation  with  other  Member  States  and  the  EU 

institutions  since,  as  acknowledged  in  the  Declaration,  significant  differences  in  national 

3  
4  

5  

6  

7  

See ECB Opinion CON/2009/86. 
See the Guide to consultation of the European Central Bank by national authorities regarding draft legislative provisions, 
Title IV, Section 1. 
See ‘Immediate Responses to Financial Turmoil’, Ecofin Council Conclusions of 7 October 2008, available on the former 
French  Presidency’s  website  at  www.ue2008.fr.  The  Ecofin  Council  recommended  that:  (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; (vii) legitimate interests of competitors must be protected, in particular through 
State aid rules; and (viii) negative spill-over effects should be avoided. 
The text of the Declaration is available on the former French Presidency’s website at www.ue2008.fr. The Member States 
agreed  to:  (i)  ensure  appropriate  liquidity  conditions  for  financial  institutions;  (ii)  facilitate  the  funding  of  banks; 
(iii) provide  financial  institutions  with  additional  capital  resources  to  continue  to  ensure  the  proper  financing  of  the 
economy;  (iv)  allow  for  an  efficient  recapitalisation  of  distressed  banks;  (v)  ensure  sufficient  flexibility  in  the 
implementation of accounting rules; and (vi) enhance cooperation procedures among European countries. 
See Brussels European Council of 15 to 16 October 2008, paragraph 3 of the Presidency Conclusions.   

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implementation  could  have  a  counter-productive  effect,  creating  distortions  in  global  banking 

markets. 

3. 

Specific observations 

3.1  Relationship of the draft law to the single monetary policy of the euro area  

3.1.1  Since the draft law aims at extending the scope of the State guarantee scheme laid down in the Act 

of  26  October  2008,  the  ECB  would  like  to  recall  some  elements  previously  mentioned  in  its 

opinions on the Member States’ financial rescue measures, including ECB Opinion CON/2008/55, 

which are important from the perspective of monetary policy. 

3.1.2  As stated in the Declaration, it is stressed that it is of the utmost importance that support operations 

conducted  by  national  authorities  do  not  in  any  way  affect  the  conduct  and  implementation  of 
monetary policy in the euro area8. In this context, the ECB reiterates its view that the extension of 
the State guarantee to cover interbank deposits should be avoided9, as this could entail a substantial 

distortion in the various national segments of the euro area money market. It may thus impair the 

implementation of the single monetary policy, which is an exclusive competence of the Eurosystem 
under  Article  127(2)  of  the  Treaty10.  It  also  appears  crucial  to  ensure  the  harmonisation  of  State 

guarantee  fees  within  the  euro  area  and  the  European  Union,  as  a  level  playing  field  is  also 

essential in this respect. In this context, the ECB recalls the specific recommendations made by the 
Governing  Council  of  the  ECB  on  government  guarantees11  which  may  help  to  ensure  such 

harmonisation. 

3.2  Temporary nature of the scheme 

In line with the Declaration and the Conclusions of the Ecofin Council of 7 October 2008, the ECB 

notes that harmonisation of the measures implemented at the national level is essential to ensure the 

integration  of  the  financial  markets  within  the  EU,  and  within  the  euro  area  in  particular.  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  field12.  In 
addition,  the  ECB  emphasises  the  need  for  national  support  measures  to  be  temporary13.  It  is 

understood that the scheme’s temporary nature is essentially maintained so that the involvement of 

the Austrian State will be limited in time. 

8  
9  

10  

11  

12  

13  

See ECB Opinions CON/2009/12, paragraph 2.3 and CON/2009/73, paragraph 3.1.   
See ECB Opinion CON/2008/55, paragraph 3.5, and more recently ECB Opinions CON/2009/12, paragraph 3.3.2, and 
CON/2009/49, paragraph 3.9.   
See  also  ECB  Opinion  CON/2008/48,  in  particular  paragraph  3.7,  and  more  recently  ECB  Opinions,  CON/2009/49, 
paragraph 3.9 and CON/2009/73, paragraph 3.1.   
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. 
See notably ECB Opinions CON/2009/24, paragraph 3.1, CON/2009/54, paragraph 2.5.2, CON/2009/73, paragraph 3.2, 
CON/2009/79, paragraph 2 and CON/2009/82, paragraph 2.2. 
See footnote 12. 

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

Done at Frankfurt am Main, 10 December 2009. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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