Opinion of the European Central Bank of 26 January 2011 on amendments to the Law on banking (CON/2011/3)
Date: 2011-01-26
Institutions: European Central Bank
Subjects: Slovenia, banking, conflict of interest, disclosure of information, financial institution, national law

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 26 January 2011  

on amendments to the Law on banking  

(CON/2011/3) 

Introduction and legal basis 

On 21 December 2010, the European Central Bank (ECB) received a request from the National Assembly 

of the Republic of Slovenia for an opinion on a draft law amending the Law on banking (hereinafter the 

‘draft  law’). On  14  January  2011,  the National  Assembly  notified  the  ECB  of  amendments  to  the  draft 

law submitted by the Slovenian Government. 

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 Banka Slovenije 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  As  stated  in  the  consultation  request,  the  main  aim  of  the  draft  law  is  to  address  conflicts  of 

interests  of:  (a)  members  of  the  management  and  supervisory  boards  of  Slovenian  commercial 

banks;  and  (b) members  of  the  management  and  supervisory  boards  of  financial  institutions  that 

conduct business abroad in which Slovenian banks have controlling interest. To this end, the draft 

law contains solutions to ensure that banks conduct their business in accordance with the Slovenian 
Corporate Governance Code2 and disclose information on all (direct and indirect) business contacts 

of  supervisory  board  members  within  the  bank  under  their  supervision  and  with  the  bank’s 

subsidiaries. Pursuant to the draft law, Banka Slovenije should define criteria on what constitutes 

significant business contacts.  

1.2  According to the proposed Government amendments to the draft law, the references in Articles 2 

and  3  of  the  draft  law  to  ‘the  Corporate  Governance  Code’  would  be  replaced  with  ‘the  highest 

ethical  standards  for  governance,  taking  account  of  conflicts  of  interests’.  The  Government  also 

proposes  amending  Article  4  of  the  draft  law  to  cover  the  duty  of  disclosing  information  to  ‘all 

1  
2  

OJ L 189, 3.7.1998, p. 42.  
Available on the Slovenian Directors’ Association website at www.zdruzenje-ns.si. 

 
 
 
 
                                                 
significant direct and indirect business contacts that management and supervisory board members 

as well as their close family members had with the bank or its subsidiary’. Further, with respect to 

the  duty  to  disclose  information  on  compliance  with  legal  acts,  other  rules  and  internal  acts 

governing  conflicts  of  interests,  it  is  clarified  that  conflicts  of  interests  concerned  refer  to 

management  and  supervisory  board  members  of  subsidiary  financial  companies  with  their  seat 

located outside Slovenia.  

2.  General observations 

2.1  The ECB broadly welcomes that the draft law is aimed at addressing conflicts of interests within 

financial institutions, which was one of the factors contributing to the global financial crisis.  

2.2 

In  accordance  with  Article  2  of  the  draft  law,  members  of  the  bank’s  management  board  must 

ensure that the bank’s operations are consistent with the provisions of the Corporate Governance 

Code.  Further,  in  accordance  with  Article  3  of  the  draft  law,  members  of  the  bank’s  supervisory 

board  have  the  duty  to  implement  provisions  of  the  Corporate  Governance  Code.  The  ECB 
emphasises  the  existing  work  undertaken  at  Union  level  on  corporate  governance3  and  draws  the 

consulting  authority’s  attention  to  the  importance  of  ensuring  that  the  draft  law  is  in  line  with 

Union legislation. Possible conflicts with future Union legislation on these issues might be avoided 

if  the  draft  law  refrains  from  specifically  referring  to  the  Corporate  Governance  Code.  In  this 

respect, the ECB supports the Government amendments where reference is broadly made to ethical 

standards for governance. 

2.3  The ECB notes the provision of Article 4a of the draft law added by the Government amendments 

that allows three months following the entry into force of the changes for Banka Slovenije to bring 

its legal acts in line with the amended Law on banking. 

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

Done at Frankfurt am Main, 26 January 2011. 

[signed] 

The Vice-President of the ECB 

Vitor CONSTÂNCIO 

3  

See Directive 2006/48/EC of the European Parliament and of the Council of 14 June 2006 relating to the taking up and 
pursuit of the business of credit institutions (OJ L 177, 30.6.2006, p. 1); European Commission’s Green Paper ‘Corporate 
Governance in financial institutions and remuneration policies’ (COM(2010) 284 final) of 2 June 2010 available on the 
European Commission’s website at www.ec.europa.eu; and the following Committee of European Banking Supervisors 
documents:  ‘Guidelines  on  the  Application  of  the  Supervisory  Review  Process  under  Pillar  2’  of  25  January  2006, 
‘Consultation paper on the Guidebook on Internal Governance’ of 13 October 2010, and ‘Guidelines on Remuneration 
Policies  and  Practices’  of  10  December  2010  which  are  all  available  on  the  European  Banking  Authority’s  website  at 
www.eba.europa.eu. 

2