Opinion of the European Central Bank of 28 January 2011 on the implementation of the principles for the development of financial supervisory structures in Belgium (CON/2011/5)
Date: 2011-01-28
Institutions: European Central Bank
Subjects: Belgium, financial services, financial stability, financial supervision, national law, payment system

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 28 January 2011 

on the implementation of the principles for the development of 

financial supervisory structures in Belgium  

(CON/2011/5) 

Introduction and legal basis 

On 23 December 2010, the European Central Bank (ECB) received a request from the Belgian Ministry 

of Finance for an opinion on a draft royal decree implementing the development of financial supervisory 

structures (hereinafter the ‘draft royal decree’).  

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,  fifth  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 royal decree relates to the Nationale Bank 

van België/Banque Nationale de Belgique (NBB), payment and settlement systems, and rules applicable 

to  financial  institutions  insofar  as  they  materially  influence  the  stability  of  financial  institutions  and 

markets.  In  addition,  the  Eurosystem  shall  contribute  to  the  smooth  conduct  of  policies  relating  to  the 

prudential supervision of credit institutions and the stability of the financial system under Article 127(5) 

of  the  Treaty.  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 royal decree 

1.1  The  draft  royal  decree  is  aimed  at  implementing  the  Law  of  2  July  2010  amending  the  Law  of 

2 August 2002 on the supervision of the financial sector and financial services, as well as the Law 

of  22  February  1998  establishing  the  Organic  Statute  of  the  Nationale  Bank  van  België/Banque 
Nationale  de  Belgique  and  containing  various  other  provisions2  (hereinafter  the  ‘Law  of  2  July 

2010’).  The  Law  of  2  July  2010  lays  down  the  principles  for  the  development  of  the  Belgian 

financial  supervisory  structures  towards  a  ‘twin-peaks’-type  model  under  which  the  NBB  will 

become  the  sole  authority  responsible  for  the  financial  sector’s  micro-  and  macro-prudential 

stability.  

1  
2  

OJ L 189, 3.7.1998, p. 42.  
Belgian  Official  Gazette,  28.9.2010,  p.  59140.  The  validity  of  the  empowering  clause  in  Article  26  of  the  Law  of 
2 July 2010  that  is  the  legal  basis  for  the  draft  royal  decree  was  extended  to  31  March  2011  (Law  of  6  January  2011 
amending  the  Law  of  2 July  2010).  The  ECB  commented  on  an  early  draft  of  the  Law  of  2  July  2010  in  Opinion 
CON/2010/7. All ECB opinions are published on the ECB’s website www.ecb.europa.eu.  

 
 
 
 
                                                 
1.2 

In order to implement the planned supervisory model, the draft royal decree will, on the one hand, 
extend the NBB’s responsibilities to the prudential supervision of financial institutions3, including 
the specific supervisory tasks relating to system-relevant financial institutions4. These new micro-

prudential  supervisory  tasks  will  be  in  addition  to  the  NBB’s  existing  task  of  contributing  to  the 
stability  of  the  financial  system5.  On  the  other  hand,  the  responsibilities  of  the  current  Banking, 

Finance  and  Insurance  Commission  (BFIC)  will  cover  the  surveillance  of  all  aspects  related  to 
financial markets, including the adherence to the rules of conduct6, and the supervision of certain 
entities that are not subject to the NBB’s prudential supervision7. The BFIC’s name will be changed 

to  the  Financial  Services  and  Market  Authority  (FSMA)  to  reflect  its  new  mandate.  The  ECB 

understands  that  a  preparatory  committee  composed  of  NBB  and  BFIC  representatives  provided 

their  assistance  in  the  context  of  drawing-up  the  arrangements  put  in  place  by  the  draft  royal 
decree8. 

1.3  The  NBB’s  prudential  supervision  will  coexist  with  the  tasks  entrusted  to  the  future  FSMA.  The 

ECB understands that in specifying the respective competences of the two supervisory authorities 

in the existing framework, the Belgian legislator has aimed to avoid both any duplication of tasks as 
well  as  the  risk  of  conflicting  decisions9.  To  this  end,  the  draft  royal  decree  provides  for  various 
information10  and  mutual  consultation11  requirements.  In  this  respect,  the  conclusion  of  a 

Memorandum  of  Understanding  aims  to  ensure  smooth  cooperation  between  the  NBB  and  the 
future FSMA12.  

3  

4  

5  
6  

7  

8  
9  
10  

11  

12  

New Article 12bis §1 of the Law of 22 February 1998 establishing the NBB’s organic statute (hereinafter the ‘Law on the 
NBB’), Article 187 of the draft royal decree, and new Articles 39 to 61 of the Law on the NBB (Article 195 of the draft 
royal decree). The financial institutions that are subject to the NBB’s prudential supervision as listed in new Article 40 of 
the Law on the NBB are the following: (i) credit institutions, including electronic money institutions, (ii) stockbrokerage 
firms, (iii) insurance companies, reinsurance companies, surety companies, (iv) clearing institutions, securities settlement 
institutions and assimilated institutions, and (v) payment institutions..  
New  Article  41  §2  of  the  Law  on  the  NBB.  The  concept  of  ‘systemically  relevant  institutions’  will  not  be  generally 
defined in or under the draft royal decree (Explanatory Memorandum, pp. 48 and 49). 
Article 12 of the Law on the NBB.  
New Article 45 §1 3° of the Law of 2 August 2002 on the supervision of the financial sector and on financial services 
(Article 217 of the draft royal decree). The FSMA’s supervisory responsibilities with regard to institutions subject to the 
NBB’s prudential supervision only apply: (i) with regard to certain of these institutions; and (ii) with respect to a list of 
rules of conduct set out in the draft royal decree. This list may be completed by the King, acting upon advice from the 
BFIC and the NBB (new Article 45 §2). The draft royal decree also introduces rules of conduct with regard to settlement 
institutions (new Article 23 of the Law of 2 August 2002, Article 205 of the draft royal decree). 
Notably portfolio management and investment advice companies, or intermediaries in insurance, banking and investment 
services (new Article 45 §1 2° of the Law of 2 August 2002). 
The establishment of the preparatory committee was provided for in Article 26 §2 of the Law of 2 July 2010. 
Explanatory Memorandum, p. 11.  
See e.g. new Article 41§6 of the Law on the NBB (Article 195 of the draft royal decree) and new Article 59 of the Law of 
22 March 1993 on the status and supervision of credit institutions (Article 131 of the draft royal decree). 
For instance, when authorising a credit institution, the NBB will have to consult the future FSMA on a number of issues 
that relate to the latter’s competence (e.g. new Article 9bis of the Law of 22 March 1993, Article 111 of the draft royal 
decree). The future FSMA’s opinion will not be binding on the NBB, but it will have to provide reasons if it departs from 
it. Explanatory Memorandum, p. 31.  
Articles 36, 125 and 176 of the draft royal decree with regard to, respectively, the supervision of insurance companies, 
credit institutions and investment firms. 

2 

                                                 
1.4  The  general  framework  governing  the  exercise  of  the  NBB’s  new  supervisory  tasks13  is  largely 

modelled on that which applied to the BFIC and to the ‘Committee for systemic risks and system-

relevant  financial  institutions’  (CSRSFI),  with  regard  to  the  supervision  over  system-relevant 

institutions.  

1.5  Finally, the draft royal decree addresses certain issues arising as a consequence of the transfer of 

new  tasks  to  the  NBB,  such  as  issues  relating  to  its  governance  structure  and  the  human  and 

financial resources necessary to carry out these tasks.  

1.5.1  First, the royal decree establishes some limited changes affecting the NBB’s organs and governance 

structure.  These  changes  include,  notably,  the  establishment  of  a  Sanctions  Committee  as  a  new 

NBB body that will decide on the imposition of administrative penalties and fines applicable to the 
institutions subject to the NBB’s prudential supervision14. 

1.5.2  Second, the staff members whose main responsibility is the execution of prudential tasks within the 

current  BFIC  will  automatically  be  transferred  to  the  NBB  when  the  transfer  of  micro-prudential 
tasks  to  the  NBB  becomes  effective15.  In  addition,  the  two  members  of  the  BFIC’s  Management 

Committee in charge of the BFIC departments responsible for the transferred prudential tasks will 

be assigned to the NBB for the remainder of their current terms of office; these two members will 
have the status of special representatives16.  

1.5.3  Third, the transfer of prudential tasks to the NBB will also cover the rights and obligations related 

to  such  tasks  stemming  from  the  BFIC’s  previous  activities.  The  actual  financial  burden  arising 

from  any  such  obligations  in  the  form  of  liabilities  is  however  not  supposed  to  be  borne  by  the 

NBB,  as  the  NBB  will  be  authorised  to  charge  such  financial  obligations  to  the  supervised 

institutions to the extent that they would not be sufficiently covered by the provisions and reserves 
transferred from the BFIC to the NBB17. 

13  

14  

15  

16  

17  

In this respect, it is noted that the rules on professional secrecy will be split into a general provision applicable to all NBB 
tasks (new Article 35 of the Law on the NBB, Article 194 of the draft royal decree) and a set of provisions specifically 
covering the NBB’s prudential supervisory tasks (new Articles 51 to 53 of the Law on the NBB). The NBB will also be 
subject to the same limitation of liability (Article 12bis §3 of the Law on the NBB, Article 187 of the draft royal decree, 
Explanatory Memorandum, p. 43). 
New  Articles  17  and  46  of  the  Law  on  the  NBB  (Articles  188  and  195  of  the  draft  royal  decree),  Explanatory 
Memorandum, p. 8. The Sanctions Committee is composed of six members, of which four are judges, appointed by the 
King  who  can  only  be  dismissed  if  they  no  longer  fulfil  the  conditions  for  their  appointment  or  in  case  of  serious 
misconduct. In addition to the conflicts of interests rules applicable to the members of the other NBB organs under Article 
25 of the Law on the NBB, the members of the Sanctions Committee will be subject to their own regime of conflicts of 
interests (e.g. three years before their appointment, they cannot have been members of the NBB’s Board of Directors or 
members of the NBB or CSRSFI’s staff, new Article 46 §4 of the Law on the NBB). The Committee is further required to 
establish its own ethics regime (new Article 46§8 of the Law on the NBB).  
This also covers the staff providing the related legal, administrative and IT support (Article 336 of the draft royal decree). 
The ECB understands that the Preparatory Committee agreed on the number of persons to be transferred in accordance 
with this allocation principle, taking into account the need to ensure continuity in supervision and in the functioning of the 
two authorities and also identified the individuals concerned (Explanatory Memorandum, p. 5).  
Article  337  of  the  draft  royal  decree,  Explanatory  Memorandum,  pp.  9  and  69.  They  will  be  subject  to  the 
incompatibilities regime in Articles 25 and 26 of the Law on the NBB and will be assimilated to NBB Board Members for 
the purpose of the monitoring of the NBB’s Code of Deontology, but will not be subject to the other provisions of the 
Law on the NBB applicable to NBB Board Members.  
Article 335, second subparagraph, of the royal decree. Explanatory Memorandum, p. 67. 

3 

                                                 
1.5.4  Fourth,  the  exercise  of  the  prudential  tasks  transferred  to  the  NBB  will  be  financed  by  way  of  a 
contribution charged by the NBB to the institutions it supervises18, i.e. in accordance with a similar 
system  as  the  one  currently  applied  to  finance  the  BFIC’s  supervisory  tasks19.  To  this  end,  the 

NBB’s operational costs will be duly and separately identified in its books, which will be monitored 

by the NBB’s audit committee. The NBB’s external auditor shall audit the calculation method and 

the total amount of these costs. 

2.   General observations 

2.1  The ECB notes that the draft royal decree implements the Belgian supervisory reform outlined in 

the  Law  of  2  July  2010,  so  that  all  comments  and  recommendations  made  in  ECB  Opinion 

CON/2010/7 apply equally in this case. However, the ECB notes that the exercise of the prudential 

supervisory  tasks  will  be  fully  integrated  into  the  NBB,  without  the  creation  of  a  distinct  legal 
entity20.  

2.2  Cooperation between the NBB and the future FSMA in the exercise of their respective tasks should 

not impinge upon the NBB’s independent execution of tasks within the framework of the European 
System  of  Central  Banks  (ESCB)21.  This  general  principle  should  be  given  due  consideration,  in 

particular,  when  drafting  the  Memorandum  of  Understanding  to  be  concluded  between  the  NBB 
and the future FSMA pursuant to the draft royal decree22. 

3.  

Specific observations 

Central bank independence and the monetary financing prohibition 

3.1  As  regards  the  financing  of  the  prudential  supervisory  tasks  transferred  to  the  NBB23,  the  ECB 

refers to the principle of financial independence under which a national central bank (NCB) must 
have sufficient means not only to perform its ESCB-related tasks, but also its own national tasks24. 

The  tasks  transferred  to  the  NBB  should  not  affect  its  ability  to  carry  out  its  ESCB-related  tasks 

from an operational and financial point of view. The ECB understands that, to this end, the draft 

royal decree provides that the exercise of the prudential supervisory tasks transferred to the NBB 

18  
19  

20  

21  
22  

23  
24  

New Article 12bis, § 4 of the Law on the NBB (Article 187 of the draft royal decree).  
Pending the adoption of a Royal Decree on the financing of the NBB’s prudential supervisory tasks under the new Article 
12bis, § 4 of the Law on the NBB, it is the Royal Decree of 22 May 2005 on the financing of the operating costs of the 
BFIC  that  will,  provisionally,  apply  to  calculate  the  supervised  institutions’  contributions  (Article  343  §1  of  the  draft 
royal decree). For 2011, the year of the transfer of tasks, the NBB will request the contributions as calculated by the BFIC 
under the Royal Decree of 22 May 2005. These are to be considered as an advance payment against the final amount due 
to  the  NBB  for  that  year  under  the  future  Royal  Decree  on  the  financing  of  the  NBB’s  prudential  supervisory  tasks 
(Article 343 §3 of the draft royal decree). 
The possibility of having these prudential supervisory tasks exercised by a separate legal entity triggered certain concerns 
expressed in previous Opinion CON/2010/7. 
Opinion CON/2003/19. 
This Memorandum must cover all instances where the authorities’ respective consultation or information is provided for 
by law or where they need to adopt a concerted action to ensure the uniform application of the law (Articles 36, 125 and 
176 of the draft royal decree). 
In accordance with a Royal Decree to be adopted by the King under new Article 12bis, § 4 of the Law on the NBB. 
See the ECB’s Convergence Report, May 2010, p. 21, and notably Opinion CON/2009/93, paragraph 3.1.5.  

4 

 
 
                                                 
will  be  financed  by  way  of  a  contribution  that  the  NBB  will  be  authorised  to  charge  to  the 
supervised  institutions25.  The  ECB  also  notes  that  in  the  context  of  the  work  by  the  preparatory 

committee, the NBB was able to assess the additional financial and human resources that would be 

made  available  in  the  context  of  the  transfer,  including  the  conditions  of  employment  of  the 

transferred staff, as well as the costs related to the transfer. The ECB welcomes the provisions of 

the  draft  royal  decree  concerning  the  financing  of  the  new  NBB  tasks,  subject  to  the  safeguards 

detailed in the following paragraphs.  

3.2  Provisions  under  which  an  NCB  becomes  the  legal  successor  to  any  liabilities  of  a  distinct 

supervisory  authority  may  raise  issues  of  financial  independence  and  compliance  with  the 
prohibition of monetary financing laid down in Article 123(1) of the Treaty26, read in conjunction 

with  Council  Regulation  (EC)  No  3603/93  of  13  December  1993  specifying  definitions  for  the 
application  of  the  prohibitions  referred  to  in  Articles  104  and  104b(1)  of  the  Treaty27.  In  this 

respect,  the  ECB  understands  that  the  assignment  to  the  NBB  of  the  BFIC’s  tasks  and  powers  is 

accompanied  by  measures  that  insulate  the  NBB  from  financial  obligations  resulting  from  any 
BFIC  activities  from  the  period  before  the  transfer  of  tasks28.  The  ECB  understands  that  such 

financial obligations would include, for example, any pending or future legal proceedings from the 

period  before  the  transfer  of  tasks  to  the  NBB  or  any  financial  obligations  deriving  from 
employment relations that any new NBB staff member may have had with the BFIC29.  

3.3  The  principle  of  financial  independence  requires  that  the  new  tasks  transferred  to  the  NBB  are 

adequately  financed  by  contributions  from  supervised  institutions  and  that  their  exercise  will  not 

result  in  any  loss  for  the  NBB.  The  ECB  understands  that  the  concrete  terms  for  financing  the 

NBB’s prudential supervisory tasks beyond the year 2011 will be laid down in a Royal decree that 
is  still  to  be  adopted30.  This  separate  legislation  should  be  the  subject  of  a  separate  consultation 

based on Articles 127(4) and 282(5) of the Treaty.   

3.4  Legal  certainty  would  be  enhanced  if  the  draft  royal  decree  would  expressly  provide  that  the 
transfer to the NBB of liabilities arising from the BFIC’s31 previous activities is accompanied by a 
concomitant transfer of assets, including the corresponding provisions and reserves which were at 

the BFIC’s disposal for the performance of its tasks are transferred to the NBB. 

3.5  Concerning the BFIC  staff transferred  to the NBB,  the ECB  stresses that from the perspective of 

central bank independence, the NBB should be free to retain the necessary personnel resources, in 

terms of quantity and quality, to carry out all its tasks and that it should also have control over its 

25  
26  
27  
28  

29 
30  

31  

Explanatory memorandum, p. 43. 
Opinion CON/2010/33, paragraph 3.2.3. 
OJ L 332, 31.12.1993, p. 1. 
ECB’s  Convergence  Report,  May  2008,  pp.  23  and  24;  see  Opinion  CON/2005/24,  paragraph  12,  and  Opinion 
CON/2005/39, paragraph 9. 
Opinion CON/2010/33, paragraphs 3.2.3 and 3.2.4. 
New Article 12bis, § 4 of the Law on the NBB (Article 187 of the draft royal decree) and Article 343 §1 of the draft royal 
decree, see also footnote 19. 
Article 335 of the draft royal decree. 

5 

                                                 
entire  staff32.  An  express  provision  clarifying  this  aspect  in  the  draft  royal  decree  would  be 

welcome.  

Coexistence of the NBB’s oversight competence with the FSMA’s supervisory powers 

3.6  Under  the  fourth  indent  of  Article  127(2)  of  the  Treaty  and  the  fourth  indent  of  Article  3.1  and 

Article  22  of  the  Statute  of  the  European  System  of  Central  Banks  and  of  the  European  Central 

Bank  (hereinafter  the  ‘Statute  of  the  ESCB’),  in  conjunction  with  the  derogations  provided  for 

under Article 139 of the Treaty and 42.1 of the Statute of the ESCB, one of the basic tasks to be 

carried out through the ESCB is the promotion of the smooth operation of payment systems. In this 

respect,  the  ECB  and  the  NCBs  of  the  Member  States  whose  currency  is  the  euro  may  provide 

facilities, and the ECB may make regulations, to ensure efficient and sound clearing and payment 

systems within the Union and with other countries. The Eurosystem’s oversight competence over 
payment,  clearing  and  settlement  systems  derives  from  these  provisions33.  The  oversight 
competence  is  also  inherent  to  the  ESCB’s  task  of  contributing  to  the  stability  of  the  financial 

system under Article 127(5) of the Treaty, as mirrored in Article 3.3 of the Statute of the ESCB. 

Moreover,  the  implementation  of  monetary  policy  in  the  euro  area  under  the  first  indent  of 

Article 127(2) of the Treaty, as mirrored in the first indent of Article 3.1 of the Statute of the ESCB, 

depends  on  the  existence  of  reliable  and  effective  market  systems  and  infrastructures.  The 

promotion of the smooth operation of payment, clearing and settlement infrastructures is, therefore, 
a  basic  task  of  the  Eurosystem34.  Moreover,  the  NBB  has  traditionally  exercised  broad  oversight 
powers over settlement systems based on its national legal framework35.  

3.7  The ECB welcomes the fact that the draft royal decree provides that the supervision by the future 
FSMA  shall  not  prejudice  the  exercise  by  the  NBB  of  the  powers  it  currently  has36.  This  is 

particularly  important  for  the  tasks  that  the  NBB  has  to  execute  pursuant  to  the  Treaty  and  the 

Statute  of  the  ESCB.  In  this  respect,  the  ECB  notes  that  cooperation  between  the  NBB  and  the 

future  FSMA  in  the  exercise  of  their  respective  tasks  should  not  impinge  upon  the  NBB’s 

independent  execution  of  tasks  executed  within  the  framework  of  the  ESCB,  and  notably  its 
oversight tasks37.  

3.8   However, in view of the above context, the draft royal decree should be further elaborated to ensure 

that it adequately reflects the NBB’s oversight competence over infrastructures, as laid down in the 

Treaty, the Statute of the ESCB and national legal acts. It must be ensured in the draft royal decree 

32  
33  

34  

35  
36  

37  

See Article 29(2) of the NBB’s Articles of Association. 
In addition, the oversight activities of some NCBs of Member States whose currency is the euro are carried out on the 
basis of national laws and regulations, which complement and, in some cases, repeat the Eurosystem’s competence. The 
oversight competence of NCBs of the Member States whose currency is not the euro is laid down in national laws and 
regulations. 
See  also  ‘Eurosystem  Oversight  Policy  Framework’,  20  February  2009,  published  on  the  ECB’s  website  at 
www.ecb.europa.eu. 
Article 8 of the Law on the NBB and Article 23 §3 of the Law of 2 August 2002. 
New Article 33 of the Law of 2 August 2002 (Article 212 of the draft royal decree), referring notably to Article 8 of the 
Law on the NBB regarding oversight. 
Opinion CON/2003/19, see also paragraph 2.2 of this Opinion. 

6 

                                                 
that the powers of the future FSMA are complemented and balanced by the adequate involvement 

of the NBB which oversees payment, clearing and settlement systems. Such an amendment of the 

draft royal decree would avoid the risk of duplication of work undertaken by the future FSMA from 

a  supervisory  perspective  and  by  the  NBB  from  an  oversight  perspective.  It  would  also  be  more 

efficient for market infrastructures. For these reasons, the ECB considers that the respective roles of 

the future FSMA and the NBB should be explicitly reflected and specifically described in the draft 

royal decree to address these considerations.  

Divergence  between  FSMA  and  NBB  with  regard  to  the  adoption  of  individual  measures  against 

financial institutions 

3.9  Under the draft royal decree, the future FSMA will be empowered, as part of its task to supervise 

compliance  with  the  rules  of  conduct,  to  take  measures  against  certain  individual  financial 
institutions that are subject to the NBB’s prudential supervision38.  Where such financial institution 

seriously breaches the rules of conduct, the future FSMA will inform the NBB of the alleged breach 

and  may  under  specific  conditions  take  the  following  measures  against  this  institution: 

(i) prohibiting  or  suspending  (in  whole  or  in  part)  the  activities  of  the  institution  concerned;  or 
(ii) ordering  the  replacement  of  its  management39.  Where  such  breaches  are  systematic,  this 
includes the power to request the NBB to revoke the licence of such financial institution40. In this 

context, the ECB understands that two main scenarios should be distinguished:  

(a)  Where the future FSMA requests the NBB to revoke a license, the NBB may only refuse if 

the withdrawal is likely to compromise the stability of the financial system. The NBB must 

issue  a  reasoned  decision,  which  the  future  FSMA  may  challenge  before  the  Ministry  of 

Finance. Under such circumstance, the Ministry of Finance will render a final decision on the 

issue. 

(b)  Where the future FSMA measures do not concern the revocation of a financial institution’s 

license, these will be notified to the NBB. The NBB may oppose such measures only where 

they  would  compromise  financial  stability  or  where  they  would  result  in  the  suspension  or 
termination of a financial institution’s activity as a whole41. If the future FSMA and the NBB 

disagree,  an  arbitration  panel  composed  of  three  members  appointed  by  the  NBB  and  the 
FSMA  (not  belonging  to  their  staff  or  decision-making  bodies)42,  decides  on  whether  the 

38  

39  
40  
41  

42  

i.e.  credit  institutions,  stock  broking  firms  or  insurance  companies  (see  new  Article  36bis  §1  and  §2  of  the  Law  of 
2 August 2002, Article 215 of the draft royal decree). 
New Article 36bis §2, 1° and 2°, of the Law of 2 August 2002. Explanatory Memorandum, pp. 38 and 57. 
New Article 36bis §2, 3°, of the Law of 2 August 2002. 
New Article 36bis §3, second and third subparagraphs, of the Law of 2 August 2002. The NBB’s decision to oppose the 
envisaged measures must provide the reasons on which it is based. Explanatory Memorandum, p. 14 and 23. 
One  member  of  the  arbitration  panel  is  appointed  by  the  NBB,  another  by  the  future  FSMA  and  these  two  members 
choose a third member (new Article 36bis § 4 of the Law of 2 August 2002).  

7 

                                                 
measures  affect  financial  stability43.  This  decision  is  binding  and  it  is  not  subject  to 
recourse44. 

The  ECB  would  welcome  clarification  in  the  draft  royal  decree  of  the  allocation  of  statutory 

responsibilities conferred, on the one hand, to the future FSMA and, on the other hand, to the NBB 

as the authority responsible for the prudential supervision of financial institutions and as the central 

bank  contributing  to  the  stability  of  the  financial  system.  Concerning  the  measures  addressed  in 

point (b), instead of resorting to an arbitration panel, the draft royal decree could provide the NBB 

with a right to veto the future FSMA’s proposed measures for reasons of financial stability. Another 

possibility  would  be  to  provide  the  NBB  with  the  right  to  issue  a  non-binding  opinion,  which  is 

submitted  to  the  future  FSMA.  After  having  considered  the  NBB’s  opinion,  if  the  future  FSMA 

decides to maintain its decision to adopt the proposed measures, it must adopt a reasoned opinion 

explaining  the  reasons  for  such  decision  despite  the  NBB’s  opinion  in  relation  to  the  potential 

impact of the measures on the stability of the financial system. Exchange of information 

3.10  The draft royal decree also provides that the NBB and the future FSMA may exchange information 

in  so  far  as  this  information  is  necessary  for  the  accomplishment  of  their  respective  tasks.  Such 

transmission  needs  to  be  accompanied  by  appropriate  protection  measures  to  safeguard  the 

confidentiality of the information. In line with this, the ECB understands that the draft royal decree 

allows for confidential data to be communicated to the ECB, not only in its capacity as a monetary 
authority  but  also  for  the  performance  of  the  ESCB  tasks  outlined  in  Article  127  of  the  Treaty45. 

Access to prudential information and cooperation with financial supervisory authorities is essential 

for  macro-prudential  monitoring  which,  in  turn,  is  indispensable  for  the  smooth  conduct  of 

monetary policy and helpful in reducing the reporting burden imposed on institutions. The recent 

financial crisis has shown that from a financial stability perspective, the ECB needs to be involved 

in  the  event  of  any  financial  market  crisis  and  in  that  context,  the  availability  of  relevant 

information and the ability to interpret it are crucial. 

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

Done at Frankfurt am Main, 28 January 2011. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

43  

44  
45  

New Article 36bis § 3, fourth subparagraph, of the Law of 2 August 2002. The measures can also be taken by the future 
FSMA if the NBB, despite its assessment that the measures could compromise financial stability, decides not to engage 
the arbitration procedure. 
New Article 36bis §4, ninth subparagraph, of the Law of 2 August 2002 
New Article 52 § 1, 1° and 2°, of the Law on the NBB (Article 195 of the draft royal decree). 

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