Opinion of the European Central Bank of 6 April 2011 on a tax on the total value of a bank’s balance sheet (CON/2011/31)
Date: 2011-04-06
Institutions: European Central Bank
Subjects: Slovenia, balance sheet, bank, financial stability, national law, tax

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 6 April 2011  

on a tax on the total value of a bank’s balance sheet  

(CON/2011/31) 

Introduction and legal basis 

On 23 March 2011, the European Central Bank (ECB) received a request from the Slovenian Ministry of 

Finance for an opinion on a draft law on a tax on the total value of a bank’s balance sheet (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 contains 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 

The purpose of the draft law is to stimulate banks’ credit activity and thus ensure that the economy 

acquires  the  necessary  funds  in  times  of  economic  crisis.  The  main  characteristics  of  the  tax 

proposed by the draft law are the following: (a) banks providing banking services in Slovenia will 

be subject to the tax; (b) the tax is to be based on the balance sheet total, calculated as the average 

of balances held on the last day of each month in a calendar year; (c) the tax is payable yearly at the 

rate of 0,1 % of the balance sheet total; (d) the tax can be reduced by 0,2 % of the amount of loans 

granted  to  non-financial  corporations  and  sole  traders,  calculated  in  accordance  with  the 

methodology laid down by Banka Slovenije; (e) the proceeds of the tax will go to the State budget. 

The draft law is intended to apply from 1 May 2011. 

2. 

Duty to consult the ECB 

The Ministry has asked for the ECB opinion to be delivered within three weeks. In accordance with 

Article 3 of Decision 98/415/EC, the consulting authorities may, if they consider it necessary, set 

the ECB a time limit for the submission of its opinion which may not be less than one month. In 

1  

OJ L 189, 3.7.1998, p. 42. 

 
 
 
 
 
                                                 
cases of extreme urgency, however, it can be requested that an opinion be delivered within an even 

shorter time limit. The consulting authorities should limit such requests to highly exceptional cases 

and must expressly state the reasons for the urgency of the matter. The consultation request in the 

present consultation did not contain any such reasons; it only stated that the Slovenian Parliament 

should be allowed to adopt the draft law in due course. The ECB invites the Ministry to consider if 

it could systemically allocate an appropriate time for consultation with the ECB at an earlier point 

in the national legislative procedure. This will help to ensure that sufficient time is available for the 

ECB to provide its expert advice on draft legislative provisions concerning matters within the scope 

of its competence.  

3. 

Implications of the draft law on economic activity and financial stability 

3.1  The ECB understands that the Slovenian Government aims to provide banks with an incentive to 

grant loans to the non-financial sector by providing for a reduction in the taxation of their balance 

sheet by a certain percentage of the amount of loans granted to non-financial corporations and sole 
traders2. The ECB recognises the need to maintain the flow of funds to this sector of the economy, 

but  cautions  against  incentives  in  loan  provision  that  may  lead  to  distortions  in  the  efficient 

allocation of loan supply and further sectoral imbalances in the real economy. The availability of 

credit by banks should be based on risk and creditworthiness criteria.  

3.2   The  ECB  has  taken  into  consideration  the  intention  of  the  Slovenian  Government  to  ensure  that 

sufficient funds are available to the economy in times of financial crisis.  However, in the ECB’s 

opinion, the risk to financial stability is that the provision of credit from the banks is steered by the 

potential tax benefits. The provision of credit should primarily rely on a robust prudential system 

and  full  compliance  with  requirements  for  the  creditworthiness  of  borrowers.  Such  an  approach 

would  contribute  to  the  appropriate  distribution  of  loans  in  the  economy,  and  this  in  turn  would 

safeguard the banks’ balance sheet from future potential losses. Over a period of time, this would 

also aid in fostering sustainable financial stability.  

3.3 

In light of the above, the  ECB recommends a  comprehensive impact  assessment of the proposed 

measure to ensure that the public benefit from the proposed tax outweighs any potential negative 

implications for banks, their customers and the economy. 

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

Done at Frankfurt am Main, 6 April 2011. 

2  

Article 8 of the draft law. 

2 

[signed] 

The President of the ECB 

Jean-Claude TRICHET