Opinion of the European Central Bank of 29 January 2010 on measures to support bank lending to businesses  (CON/2010/14)
Date: 2010-01-29
Institutions: European Central Bank
Subjects: Poland, banking, discounting, monetary policy, national law, negotiable instrument

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 29 January 2010 

on measures to support bank lending to businesses 

(CON/2010/14) 

Introduction and legal basis 

On 8 January 2010 the European Central Bank (ECB) received a request from the President of Narodowy 

Bank  Polski (NBP)  for  an  opinion  on  a  draft  resolution on promissory notes  eligible  for  discounting  at 

Narodowy Bank Polski and on the rules and procedures applicable to the discounting of promissory notes 
(hereinafter the ‘draft resolution’)1.  

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 Article 2(2) of Council Decision 98/415/EC of 29 June 1998 on 

the  consultation  of  the  European  Central  Bank  by  national  authorities  regarding  draft  legislative 
provisions2, as the draft resolution relates to the introduction of a new instrument of monetary policy in a 

Member State that has not adopted the euro. 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 resolution 

1.1  Under Article 44 of the Law on Narodowy Bank Polski3, NBP may accept bills of exchange and 

promissory notes from banks for discounting and rediscounting, and the eligible types of such bills 

and notes are specified by resolution of the NBP Management Board. Pursuant to this mandate, the 
rules  governing  the  rediscounting  mechanism  were  defined  in  19994.  The  purpose  of  the  draft 

resolution is to introduce a discounting mechanism under which NBP will accept for discounting 

promissory  notes  presented  by  banks,  applying  to  such  notes  the  discount  rate  to  be  set  by  the 

Monetary Policy Council. 

1.2  The draft resolution is a measure designed to address the current unfavourable market conditions 

restraining  banks’  lending  to  businesses.  To  this  end,  it  introduces  discount  credit,  a  new 

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Draft resolution of 7 January 2010. 
OJ L 189, 3.7.1998, p. 42. 
The  Law  of  29  August  1997  on  Narodowy  Bank  Polski  (consolidated  text:  Dziennik  Ustaw  (Dz.  U.)  of  2005  No  1, 
item 2). 
Resolution No 2/98 of the Management Board of Narodowy Bank Polski of 27 February 1998 on the types of bills of 
exchange eligible for rediscounting with Narodowy Bank Polski, and specifying the rules and procedures applicable to 
the rediscounting of bills (as published in Dziennik Urzędowy NBP of 9 March 1998 No 3, item 5). 

 
 
 
 
 
                                                 
refinancing  instrument  enabling  NBP  to  indirectly  finance  banks’  lending  to  businesses  without 
engaging in direct relationships with original borrowers5.  

1.3  The  draft  resolution  specifies  the  eligibility  criteria  and  procedural  set-up  applicable  to  the 

proposed  discounting  instrument.  The  following  are  eligible  to  submit  promissory  notes  for 

discounting at NBP: (i) domestic banks; (ii) branches of foreign banks; and (iii) branches of credit 
institutions6, which (a) have an account with NBP; and (b) have entered with NBP into a discount 
credit  agreement.  Promissory  notes7  with  maturities  of  less  than  one  year  are  eligible  for 
discounting at NBP, if they meet general requirements specified in the Law on bills of exchange8 
and additional requirements set out in the draft resolution9. 

2. 

ECB comments 

2.1  The ECB understands that the scope of the draft resolution covers credit institutions established in 

Poland,  including  subsidiaries  of  foreign  credit  institutions,  as  well  as  branches  of  European 

Economic  Area  (EEA)  credit  institutions  from  outside  Poland.  The  ECB  welcomes  this,  as  it 

ensures a level playing field for all domestic and foreign credit institutions. 

2.2  Although non-participating Member States retain their powers in the field of monetary policy, it is 

nevertheless  beneficial  for  them  to  gradually  achieve  consistency  with  Eurosystem  standards  so 

that  credit  institutions  operating  in  their  territories  can  become  acquainted  with  the  requirements 

that will apply once these Member States have adopted the euro. Such gradual harmonisation prior 

to  the  adoption  of  the  euro  will  contribute  to  the  smooth  integration  of  the  national  central  bank 

(NCB)  into  the  Eurosystem.  In  this  context,  the  ECB  draws  NBP’s  attention  to  the  fact  that  the 

Eurosystem’s  single  list  of  eligible  collateral  does  not  include  promissory  notes  other  than  those 

which are issued by credit institutions that are eligible counterparties to the Eurosystem's monetary 

policy  operations,  which  are  secured  by  a  pool  of  residential  mortgages,  and  which  comply  with 
certain other eligibility criteria10.  

2.3  The  requirement  for  lending  to  be  based  on  adequate  collateral,  specified  in  Article  18  of  the 

Statute  of  the  European  System  of  Central  Banks  and  of  the  European  Central  Bank,  does  not 

presently apply to NBP due to a derogation in Article 42(1) of the Statute. However, in the interest 

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See the explanatory memorandum to the draft resolution, p. 1. See also ‘Monetary policy guidelines for the year 2010’, 
p. 18 (available on NBP’s website at www.nbp.pl). 
As defined in Articles 2, 4(3) and 4(1)(1), (2) and (17) of the Law on banking of 29 August 1997 (consolidated text: Dz. 
U. of 2002 No 72, item 665) – credit institutions registered in Poland are legally referred to as ‘banks’ (this definition 
does not cover the Polish version of credit unions), the term ‘credit institution’ as used in Polish law only relates to EEA 
credit institutions from outside Poland, and non-EEA credit institutions are referred to as ‘foreign banks’. 
In the English version of this opinion, the terms ‘bill of exchange’ and ‘promissory note’ are used in this Opinion in the 
light  of  their  respective  definitions  both  in  the  relevant  convention  (see  Article  1  vs.  Article  75  of  the  Convention 
Providing a Uniform Law for Bills of Exchange and Promissory Notes (Geneva, 1930)) and in the relevant provisions of 
Polish law (see Article 1 vs. Article 101 of the Law on bills of exchange referred to in footnote 8 below).   
The Law of 28 April 1936 on bills of exchange (Dz. U. of 1936 No 37, item 282, and of 2006 No 73, item 501).  
See paragraphs 1(1)(2)-(8) of the draft resolution. 
See  Section  6.2.2  of  Annex  I  to  Guideline  ECB/2000/7  of  31  August  2000  on  monetary  policy  instruments  and 
procedures of the Eurosystem (OJ L 310, 11.12.2000, p. 1). 

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of  encouraging  NCB  lending  only  against  adequate  collateral,  the  ECB  notes  that  the  draft 

resolution  might  benefit  from  including  an  express  provision  requiring  examination  of  the 

creditworthiness  of  original  borrowers,  complementing  those  safeguards  which  are  already 
included in it and in the template discount credit agreement attached to it11, as well as the general 
statutory requirement for credit institutions to ensure creditworthiness of borrowers12.  

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

Done at Frankfurt am Main, 29 January 2010. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

11 

12 

For example, the re-endorsement mechanism under which the promissory notes which serve as discount credit collateral 
will not be presented by NBP to the drawers for repurchase, but will be re-indorsed to the banks which presented them 
for discounting, while at the same the current account of the bank held with NBP will be debited with the full amount of 
the notes (see paragraph 12(1) of the draft resolution); the acceleration clause applied in the event of the bank’s default 
(see  paragraph  4(5)  of  the  draft  resolution);  the  right  for  NBP  to  review  the  relevant  credit  documentation  (see 
paragraph 2(3) of the template discount credit agreement); the requirement for banks, when presenting promissory notes 
for discounting, to certify that that they are not aware of the drawer having defaulted in the past in the repayment of its 
obligations  under  a  promissory  note  or  a  bill  of  exchange  (see  paragraph  4(3)(2)  of  the  draft  resolution);  the  right  for 
NBP to terminate the discount credit agreement with immediate effect (see paragraph 6(1) of the template discount credit 
agreement).  
Article 70(1) of the Law on banking referred to in footnote 6.    

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