Opinion of the European Central Bank of 13 February 2012 on the management of liquidity in the Treasury accounts at the Banca d’Italia and the selection of counterparties for related operations (CON/2012/9)
Date: 2012-02-13
Institutions: European Central Bank
Subjects: Italy, Treasury, account, central bank, money-market liquidity, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 13 February 2012 

on the management of liquidity in the Treasury accounts at the Banca d’Italia and the selection of 

counterparties for related operations 

(CON/2012/9) 

Introduction and legal basis 

On  7  November  2011,  the  ECB  received  a  consultation  request  from  the  Italian  Ministry  of  Economic 

Affairs and Finance on a Ministerial Decree concerning the use of liquidity in the payment account and 

similar accounts held by the Treasury at the Banca d’Italia, as well as for the selection of counterparties 
eligible for related operations1 (hereinafter the ‘Ministerial Decree’). The Ministerial Decree was adopted 

on 25 October 2011. 

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  provisions2,  as  the  draft  legislation  concerns  the  Banca  d’Italia.  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 Ministerial Decree 

1.1  The  Ministerial  Decree  regulates  the  system  for  managing  liquidity  held  by  the  Treasury  in 

accounts  at  the  Banca  d’Italia  and  selecting  counterparties  for  this  purpose.  The  liquidity  is 

managed  through  lending  or  borrowing  on  the  money  market  and  by  recourse  to  other  financial 

market  operations.  In  addition,  the  Ministerial  Decree  allows  the  Ministry  to  place  liquidity  into 

fixed term deposits with the Banca d’Italia, pursuant to the Agreement between the Ministry and 

the Banca d’Italia of 22 March 2011 for the management of the payment account for receipts and 
disbursements  and  similar  accounts  held  by  the  Treasury  at  the  Banca  d’Italia3  (hereinafter  the 

‘Agreement’),  without  prejudice  to  the  possibility  of  terminating  any  of  the  abovementioned 

operations. The Ministerial Decree also defines which counterparties are eligible for operations and 

the procedures the Banca d’Italia is to follow when carrying out these operations on behalf of the 

Treasury.  It  allows  the  Banca  d’Italia  to  require  counterparty  compliance  with  technical 

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3  

Ministerial Decree of 25 October 2011 (Gazzetta Ufficiale No 254, 31.10.2011). 
OJ L 189, 3.7.1998, p. 42.  
Some of the provisions contained in the Agreement are further specified in non-public technical protocols. 

 
 
 
 
                                                 
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agreements, sets out rules for the management of credit risk in lending operations and refers to a 

separate decree in relation to the framework applicable to collateral. 

1.2  The Ministerial Decree implements the second sentence of Article 5(5) of the Law on consolidation 
of  legislative  provisions  and  regulations  on  public  debt4,  as  amended  by  Article  47(1)  of  Law 
No 196/20095.  According  to  the  Ministerial  Decree,  the  procedure  for  liquidity  management  and 

selecting counterparties is to be established by a separate Ministerial decree on detailed rules on the 

operations,  based  on  transparency,  efficiency  and  competitiveness,  and  in  accordance  with  an 

agreement between the Ministry and the Banca d’Italia. 

2. 

General observations  

2.1  The obligation to consult the ECB 

The  Ministerial  Decree  is  part  of  a  single  broader  framework  of  acts  aimed  at  implementing  the 

legislative  provisions  set  out  in  Article  47  of  Law  No  196/2009.  The  Ministry  adopted  two 
Ministerial  Decrees6  for  the  execution  of  the  Agreement,  the  first  regulating  accounting  methods 
and criteria concerning transactions connected to the Treasury accounts at the Banca d’Italia7 and 

the second containing detailed rules on operations for managing liquidity held by the Treasury in its 
accounts at the Banca d’Italia8. In addition, a Ministerial decree was adopted on planning related to 

public administration financial needs in the context of managing the Treasury accounts at the Banca 
d’Italia9. The ECB was not consulted on any of these acts. As a result, the ECB is not in a position 

to give a full assessment of the Ministerial Decree.  

2.2  The appropriate time to consult the ECB  

The consultation request on the Ministerial Decree was received by the ECB after it was adopted10. 

The ECB stresses that even in cases of extreme urgency national authorities are not relieved from 

their  duty  to  consult  the  ECB  and  to  allow  sufficient  time  to  take  its  views  into  account  as  laid 

down  in  Articles  127(4)  and  282(5)  of  the  Treaty.  The  second  sentence  of  Article  4  of 

Decision 98/415/EC  provides  that  the  ECB  must  be  consulted  ‘at  an  appropriate  stage’  in  the 

legislative process. This implies that the consultation should take place at a point in the legislative 

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Presidential Decree No 398 of 30 December 2003 (Gazzetta Ufficiale No 57, 9.3.2004, Supplemento ordinario No 37). 
Law No 196 of 31 December 2009 (Gazzetta Ufficiale No 303, 31.12.2009, Supplemento ordinario No 245).  
Ministerial Decree of 29 July 2011 (Gazzetta Ufficiale No 190, 19.8.2011) and Ministerial Decree of 29 September 2011 
(Gazzetta Ufficiale No 231, 4.10.2011).  
Ministerial Decree of 11 November 2011 (Gazzetta Ufficiale No 276, 26.11.2011), implementing Article 47(5) of Law 
No 196/2009. 
Ministerial  Decree  of  28  November  2011  (Gazzetta  Ufficiale  No  279,  30.11.2011),  implementing  Article  6(2)  of  the 
Ministerial Decree, on which the ECB has adopted this Opinion. 
Ministerial  Decree  of  13  July  2011  (Gazzetta  Ufficiale  No  178,  2.8.2011),  implementing  Article  47(5)  of  Law 
No 196/2009. 
It  should  also  be  noted  that  the  consultation  request  sent  by  the  Italian  authorities  did  not  set  any  time  limit  and 
announced  the  adoption  of  further  decrees  on  the  same  matter.  As  underlined  in  several  ECB  Opinions,  Article  3  of 
Council  Decision  98/415/EC  specifies  that  consulting  authorities  may  set  a  time  limit  for  the  submission  of  an  ECB 
opinion, but this time limit may not be less than one month, unless a shorter time limit is justified with reasons for the 
extreme urgency.  

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process that affords the ECB sufficient time to examine the draft legislative provisions and to adopt 

its  opinion  in  all  required language  versions,  and  also  enables  the  relevant  national  authorities  to 

take  the  ECB’s  opinion  into  account  before  the  provisions  are  adopted.  Article  3(4)  of  Decision 

98/415/EC obliges Member States to suspend the process of adoption of draft legislative provisions 

pending  receipt  of  the  ECB’s  opinion.  On  this  occasion,  the  Ministry  failed  to  comply  with  the 

consultation obligation pursuant to Council Decision 98/415/EC. 

3. 

Prohibition of monetary financing  

The  Ministerial  Decree  establishes  the  procedure  to  be  used  by  the  Banca  d’Italia  when  managing  the 

liquidity  held  by  the  Treasury  on  its  accounts  at  the  Banca  d’Italia.  It  specifies  that  management 
operations do not give rise to fees or commissions payable by the Ministry11. Moreover, the Banca d’Italia 

is  to  manage  the  operation  of  credit  lines  and  guarantees,  although  there  is  no  specific  mention  of 

remuneration of the Banca d’Italia by the Ministry in the Ministerial Decree.  

Taking  into  account  the  express  recognition  in  Article  21.2  of  the  Statute  of  the  European  System  of 

Central Banks and of the European Central Bank of the provision of fiscal agency services as a legitimate 

function traditionally performed by central banks, the ECB notes that provision by central banks of fiscal 
agency services12 complies with the monetary financing prohibition, provided that such services remain 

within the scope of the fiscal agency function and do not constitute central bank financing of public sector 
obligations  vis-à-vis  third  parties13  or  central  bank  crediting  of  the  public  sector  outside  the  narrowly 
defined  exceptions  specified  in  Regulation  (EC)  No  3603/9314.  The  ECB  considers  that  the  provision 

without remuneration by the Banca d’Italia of fiscal agent services under the Ministerial Decree does not 

raise monetary financing concerns, provided they are core fiscal agent services. 

4.  Monetary policy implementation 

In  Opinion  CON/2009/69,  the  ECB  highlighted  that  Government  deposits  held  with  the  Eurosystem 

reduce the amount of liquidity available to the euro area banking sector. Therefore, the deposits have to 

be  forecasted  when  calibrating  the  ECB’s  open  market  operations,  and  the  precision  of  the  forecasts 

provided by the national central banks of the Member States whose currency is the euro to the ECB is, to 

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See Article 3(2) of the Ministerial Decree. 
See  the  ECB’s  Convergence  Report  of  May  2010,  p.  25,  stating  that  ‘The  purpose  of  Article  21.2  of  the  Statute  is, 
following transfer of the monetary policy competence to the Eurosystem, to enable NCBs to continue to provide the fiscal 
agent  service  traditionally  provided  by  central  banks  to  governments  and  other  public  entities  without  automatically 
breaching the monetary financing prohibition.’ See also, e.g., Opinion CON/2009/23. All ECB opinions are published on 
the ECB’s website at www.ecb.europa.eu. 
i.e. one of the prohibited forms of monetary financing; see Article 1(1)(b)(ii) of 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  Treaty  (OJ  L  332,  31.12.1993,  p.  1).  See  the  ECB’s  Convergence  Report  of  May  2008,  p. 233,  which  states  with 
reference to the provision by Česká národní banka of administrative and financial support to the Financial Arbitrator, an 
administrative body entirely independent from the central bank, ‘constitutes a form of central bank financing of the public 
sector’s obligations’. 
See  Article  4  (non-extendable  intra-day  credits),  Article  5  (crediting,  under  specified  conditions,  the  public  sector’s 
account with cheques issued by third parties) and Article 6 (holding, within specified limits, coins issued by and credited 
to the public sector) of Regulation (EC) No 3603/93.  

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a large extent, dependant on the procedures for managing government deposits. In this context, the ECB 

welcomed  the  introduction  of  the  provision,  later  confirmed  by  Article  47  of  Law  No  196/2009, 

stipulating  that  deposits  in  excess  of  a  threshold  agreed  between  the  Ministry  and  the  Banca  d’Italia, 

would no longer be remunerated. This measure was expected to provide an incentive for the Ministry to 

transfer funds in excess of the threshold to the banking sector, and thus reduce forecasting errors in the 

liquidity management transactions procedures.  

As noted in paragraph 2.1, the Ministerial Decree is part of a wider framework, thus it is an insufficient 

basis  for  assessing  whether  the  measures  to  be  implemented  for  managing  government  deposits  will 

reduce forecasting errors and improve the overall scheme for the management of government deposits as 

outlined  above.  In  particular,  pursuant  to  Article  2(4)  of  the  Ministerial  Decree,  the  detailed  rules  have 

been  laid  down  in  specific  non-public  protocols  between  the  Ministry  and  the  Banca  d’Italia,  and  in  a 
separate  Ministerial  decree15,  on  which  the  ECB  was  not  consulted.  Since  the  details  contained  in  the 

technical  decree  are  outside  the  scope  of  the  present  consultation,  the  ECB  is  unable  to  conclusively 

assess future government deposit procedures in Italy. 

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

Done at Frankfurt am Main, 13 February 2012. 

[signed] 

The President of the ECB 

Mario DRAGHI 

15   Ministerial Decree of 28 November 2011. 

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