Opinion of the European Central Bank of 20 April 2011 on amendments to the governance structure of the Oesterreichische Nationalbank (CON/2011/38)
Date: 2011-04-20
Institutions: European Central Bank
Subjects: Austria, central bank, institutional activity, national law, shareholder, shareholding

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 20 April 2011 

on amendments to the governance structure of the Oesterreichische Nationalbank 

(CON/2011/38) 

Introduction and legal basis 

On 15 March 2011, the European Central Bank (ECB) received a request from the Austrian Ministry of 

Finance for an opinion on a draft law amending the Law on the Oesterreichische Nationalbank and the 

Law on the Financial Market Supervisory Authority (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 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  relates  to  the  Oesterreichische  Nationalbank  (OeNB).  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  Recently,  the  Austrian  Federation  became  the  OeNB’s  sole  shareholder.  The  draft  law  therefore 

amends the Law on the OeNB to reflect its actual ownership structure. The shareholder rights will 

be exercisable by the Federal Minister for Finance. 

1.2  As a consequence of the changes to the shareholder structure, the draft law amends the composition 
and organisation of the OeNB’s General Council2 (hereinafter the ‘General Council’). The General 

Council  is  charged  with  the  supervision  of  all  business  falling  outside  the  remit  of  the  European 

System  of  Central  Banks.  It  will  advise  the  OeNB’s  Governing  Board  on  the  conduct  of  the 

OeNB’s business and in matters of monetary policy. The draft law reduces the number of members 

of  the  General  Council  from  14  to  10.  In  future,  all  members  of  the  General  Council  shall  be 

appointed by the Federal Government. At the present time, only the President, the Vice President 

and six other members of the General Council have been appointed. The remaining six members of 

the General Council are elected by the General Assembly. Under the draft law, the General Council 

is  not  required  to  include  representatives  from  credit  institutions,  trade  and  industry,  small 

businesses,  agriculture  or  salaried  employees  and  wage-earners.  The  requirement  that  members 

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2  

OJ L 189, 3.7.1998, p. 42. 
See draft amendments to Articles 22 and 23 of the Law on the OeNB. 

 
 
 
 
                                                            
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should  be  persons  well-known  in  a  certain  business  sector,  lawyers  or  economists  remains 

unchanged.  Furthermore,  the  draft  law  reduces  from  two  to  one  the  number  of  OeNB  employee 

representatives participating in General Council meetings on personnel, social and welfare matters.  

1.3  The grounds for dismissal of the members of the General Council remain unchanged. Under Article 

23  of  the  Law  of  the  OeNB,  a  member  may  only  be  removed  from  office  by  the  Federal 

Government  if  he/she  no  longer  fulfils  the  conditions  for  holding  office  or  if  he/she  is  guilty  of 

serious misconduct. 

1.4  The draft law will increase the terms of office of the members of the Governing Board from five to 
six years3. The Governing Board is responsible for the overall operation and conduct of the OeNB’s 

business. 

1.5  Furthermore, the draft law reduces from two to one the required number of external auditors and 

alternate auditors of the OeNB. The draft law also introduces the principle of external rotation of 

the external auditors. No auditors or firm of auditors, which have certified the audit of the OeNB’s 

annual accounts during the previous five financial years can be re-elected as an auditor or alternate 

auditor.  These  rotation  rules  do  not  apply  following  an  audit  break  of  at  least  two  consecutive 

financial years. 

1.6  The  draft  law  enhances  transparency  as  regards  the  OeNB’s  direct  and  indirect  shareholdings  in 

undertakings.  Under  Article  68(4)  of  the  Law  on  the  OeNB,  the  annual  report  must  include  a 

separate  disclosure  of  any  such  shareholding  of  the  OeNB,  in  particular  stating  the  proportion  of 

capital and voting rights held as well as the nominal capital. Transparency of the OeNB will also be 

increased by introducing the obligation for the Governing Board to draw up a standard cost account 

and  an  investment  plan  before  the  start  of  each  financial  year  which  has  to  be  approved  by  the 

General  Council.  After  the  end  of  each  financial  year,  the  Governing  Board  is  also  required  to 

produce a comparative analysis of the budgeted figures and the actual costs and investments. The 

comparative  analysis has to be communicated to  the General Council, together with the auditor’s 
report4.  

1.7  The draft law adjusts the references in the Law of the OeNB to the Treaty where necessary. These 

adjustments are editorial rather than substantive changes.  

1.8  The  draft  amendments  to  Articles  18  and  19  of  the  Law  on  the  Financial  Market  Supervisory 

Authority  increase  the  annual  amount  reimbursed  by  the  Financial  Market  Supervisory  Authority 

for on-site inspections and microeconomic analysis of banks carried out by the OeNB as part of its 

banking supervisory tasks from EUR 4 million to EUR 8 million. 

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4  

See draft amendments to Article 33 of the Law on the OeNB. 
See draft Article 68a of the Law on the OeNB. 

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2. 

Specific Observations 

2.1  The draft law proposes changes to Article 33 of the Law on the OeNB. However, no changes are 

proposed  to  Article  33(4),  which  contains  the  grounds  for  dismissal  of  the  members  of  the 

Governing  Board.  Over  the  past  few  years,  the  analysis  of  the  different  aspects  of  central  bank 
independence has been further refined in the ECB’s opinions5 and Convergence Reports6, inter alia, 

in relation to personal independence and the grounds for dismissal of Governors. Accordingly, the 

ECB advises the consulting authority to use this opportunity to fully align the wording of Article 

33(4)  of  the  Law  on  OeNB  with  that  of  Article  14.2  of  the  Statute  of  the  European  System  of 

Central  Banks  and  of  the  European  Central  Bank  (hereinafter  the  ‘Statute  of  the  ESCB’).  This 

should  be  done  without  setting  out  national  criteria  for  dismissal,  including  references  to  the 

appointment conditions and conflict of interest rules. 

2.2  The  ECB  welcomes  the  stability  in  the  Governing  Board  of  the  OeNB  that  will  result  from 

increasing its members’ term of office from five to six years. 

2.3  Article  27.1  of  the  Statute  of  the  ESCB  provides  that,  ‘The  accounts  of  the  ECB  and  national 

central  banks  shall  be  audited  by  independent  external  auditors  recommended  by  the  Governing 

Council and approved by the Council.’. The ECB has established ‘Good Practices for the selection 

and mandate of External Auditors according to Article 27.1 of the ESCB/ECB Statute’, which was 

approved by the ECB’s Governing Council on 23 October 2008. Although the Good Practices are 

not binding, the ECB expects that each Eurosystem central bank, when selecting an external auditor 

pursuant  to  Article  27.1,  and  when  determining  that  auditor’s  mandate  thereafter,  will  apply  the 

Good  Practices  and/or  explain  any  divergence.  Information  on  the  application  and/or  any 

divergence from the Good Practices should be provided to the ECB when requesting a Governing 

Council recommendation for the appointment of a Eurosystem central bank’s external auditors to 

the EU Council.  

2.4  Good  Practice  No  3  recommends  that  the  Eurosystem  central  banks  should  establish  a  defined 

multi-year mandate for the appointment of external auditors or an audit firm. The draft law does not 

provide for a defined multi-year mandate. Under the draft law, an auditor and an alternate auditor 

are  elected  each  year.  The  consulting  authority  may  use  this  opportunity  to  change  the  one-year 

mandate in the draft law to a multi-year mandate. This will help to enhance overall effectiveness, 

efficiency  and  independence  of  the  OeNB’s  external  auditors.  The  draft  law  would  also  benefit 

from stating explicitly that the auditors are ‘external’. 

2.5  Further,  pursuant  to  Good  Practice  No  3,  the  auditors  or  the  key  audit  partner  should  be  rotated 

from the external audit engagement at least every seven years. The draft amendments regarding the 

rotation  of  the  external  auditors  and  alternate  auditor  every  five  years  comply  with  the  Good 

Practices.  However,  the  ECB  draws  attention  to  the  currently  on-going  approval  procedure 

contained  within  Article  27.1  of  Statute  of  the  ESCB  for  the  upcoming  external  auditors  of  the 

OeNB. In order not to prejudice this procedure, the ECB suggests that the draft law should include 

5 
6  

See, for example, paragraph 3.2.1 of Opinion CON/2008/21. 
See the ECB’s Convergence Reports 2008 and 2010 under the heading Central Bank Independence. 

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appropriate transitional provisions as regards the proposed reduction in the number of auditors or 

alternate auditors. 

2.6  With reference to the view previously expressed by the ECB7 in respect of the OeNB bearing any 

costs for on-site inspections and microeconomic analysis of banks that exceed the cap mentioned in 

Articles 18 and 19 of the Law on the Financial Market Supervisory Authority, the ECB welcomes 

the increase of the cap for reimbursement of costs from EUR 4 million to EUR 8 million. 

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

Done at Frankfurt am Main, 20 April 2011. 

[signed] 

The President of the ECB 

Jean-Claude TRICHET 

7  

See paragraph 2.3.2 of Opinion CON/2007/33. 

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