Opinion of the European Central Bank of 27 January 2010 on the special administration procedure initiated by Banca Naţională a României for credit institutions in distress (CON/2010/12)
Date: 2010-01-27
Institutions: European Central Bank
Subjects: Romania, banking supervision, central bank, company in difficulties, credit institution, national law, payment system

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 27 January 2010 

on the special administration procedure initiated by Banca Naţională a României 

for credit institutions in distress  

(CON/2010/12) 

Introduction and legal basis 

On  6  January  2010  the  European  Central  Bank  (ECB)  received  a  request  from  Banca  Naţională  a 

României (BNR) for an opinion on a draft law amending and supplementing the Government Emergency 

Ordinance No 99/2006 on credit institutions and capital adequacy (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  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 BNR and 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 is designed to amend the special administration procedure currently provided for by 

the  Government  Emergency  Ordinance  No  99/2006  on  credit  institutions  and  capital  adequacy 

(hereinafter the ‘GEO No 99/2006’). The aim is to provide supplementary tools to enable BNR to 

respond  in  a  timely  and  effective  manner  in  the  event  of  a  credit  institution  in  distress  and  to 

strengthen  the  special  administrator's  powers  by  explicitly  allowing  it  to  promptly  implement  a 

broad range of restructuring measures with respect to such credit institution. GEO No 99/2006 is 

the main piece of legislation regulating the activity of credit institutions and financial investment 

companies  in  Romania,  as  well  as  their  prudential  supervision  and  the  supervision  of  payment 

systems and settlement systems for financial instruments. The draft law forms part of the legislative 

amendments to be adopted by Romania, as agreed during the negotiations between the Romanian 

Government, on the one hand, and the International Monetary Fund and the European Union, on 

the other.  

1  

OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
                                                 
1.2   Moreover,  the  draft  law  aims  at  ensuring  greater  legal  certainty  for  the  measures  adopted  during 

special administration so that they could neither be suspended nor reversed by a court of law, nor 

subject to the consent of the credit institution’s creditors. The main issues relate to: 

• 

the  special  administration  procedure,  including  the  conditions  and  the  period  of  time  for 

imposing  this  procedure,  the  characteristics  and  tasks  of  the  special  administrator  and  the 

possible measures to be taken during this procedure; 

• 

the prerogatives of BNR in the case of the special administration procedure. With regard to 

the  appointment  of  the  special  administrator,  the  draft  law  extends  BNR’s  prerogatives  by 

allowing it to specifically designate the objectives and tasks of the designated person(s), their 

remuneration and the amounts that may be spent in the performance of the authorised tasks 

(see, in particular, Section 2 in Chapter VIII of the draft law). 

2. 

General observations  

2.1  The  consulting  authority  has  informed  the  ECB  that  the  draft  law  is  to  be  adopted  before 

31 March 2010.  In  view  thereof,  the  consulting  authority  invokes  the  exemption  provided  for  in 

Article  3(2)  of  Council  Decision  98/415/EC,  which  allows  for  a  reduction  of  the  minimum  time 

limit for submission of the ECB’s opinion of one month only in case of extreme urgency, and asks 

the  ECB  to  deliver  its  opinion  by  31  January  2010.  The  ECB  would  however  wish  to  draw  the 

consulting  authority’s  attention 

to 

the  fact 

that 

the  second  sentence  of  Article  4  of 

Decision 98/415/EC  states  that  the  ECB  must  be  consulted  ‘at  an  appropriate  stage’  in  the 

legislative process. This implies that the consultation should take place at a point in the legislative 

process that affords the ECB sufficient time to examine the draft legislative provisions and to adopt 

its  opinion  in  the  required  language  versions  and  which  also  enables  the  relevant  national 

authorities to take the ECB’s opinion into consideration before the provisions are adopted.  

2.2  The ECB takes note of the draft law’s widening of BNR’s prerogatives and restates its view that 

the tasks to be performed by BNR to aid the carrying out of stabilisation measures in the domestic 

banking sector must be conducted in a manner that is fully compatible with BNR’s institutional and 

financial independence and that safeguards the proper performance of its existing tasks under the 

Treaty  and  the  Statute  of  the  European  System  of  Central  Banks  and  of  the  European  Central 
Bank2.  Moreover,  BNR  should  independently  avail  itself  of  sufficient  financial  and  personnel 

resources, both in terms of quantity and quality, to carry out tasks related to the European System 
of Central Banks as well as its own tasks, including its new tasks based on the draft law3. 

2.3.1  The ECB welcomes the intention of the draft law to increase the preventive character of the actions 

to be taken in order to improve the financial situation of a credit institution in distress. Furthermore, 

the ECB supports the extension of the responsibility of those involved in the special administration 

2  

3 

See  paragraph  3.7  of  ECB  Opinion  CON/2008/68.  All  ECB  opinions  are  published  on  the  ECB  website  at 
www.ecb.europa.eu. 
See the ECB Convergence Report, May 2008, p. 20. See also Opinion CON/2009/27.  

2 

 
                                                 
procedure for the purposes of assuring financial stability and protecting the interests of the credit 

institution’s depositors. 

2.3.2  The  ECB  understands  that  the  draft  law  aims  to:  (i)  allow  the  special  administrator  to  deal  with 

ailing  credit  institutions  with  a  broader  range  of  restructuring  measures;  (ii)  ensure  that  credit 

institution resolution measures during the special administration may not be suspended or reversed 

by a court of law, and are not subject to the creditors’ consent; (iii) specify a clear trigger for the 

early  and  mandatory  appointment  of  a  special  administrator  based  on  a  regulatory  threshold.  The 

ECB notes that the financial crisis has shown the importance of an efficient resolution regime and 

has  triggered  reflections  both  at  international  and  European  level  on  how  to  enhance  the 

instruments  at  the  disposal  of  competent  authorities  in  a  crisis  situation.  In  this  context,  the ECB 

welcomes the measures contained in the draft law to enhance the capability of BNR to respond in a 

timely  and  effective  manner  in  the  event  of  a  credit  institution  in  distress.  The  forthcoming 

legislative proposals of the European Commission on early intervention tools and crisis resolution 

may result in a need to further improve the national legal framework. 

3. 

Specific observations 

The draft law provides only for the right of the creditor of a credit institution to claim compensation if his 

interests  have  been  negatively  affected  as  a  result  of  the  measures  implemented  during  a  special 

administration  procedure  concerning  the  credit  institution,  without  specifying  who  bears  the  liability  to 
compensate such creditor (see Article 2541(3) of the draft law). This should therefore also be expressly 

specified in the draft law.  

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

Done at Frankfurt am Main, 27 January 2010. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

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