Opinion of the European Central Bank of 16 July 2012 on the bank levy and contributions to the deposit guarantee scheme (CON/2012/53)
Date: 2012-07-16
Institutions: European Central Bank
Subjects: Slovakia, bank charges, bank deposit, financial stability, guarantee, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 16 July 2012  

on the bank levy and contributions to the deposit guarantee scheme 

(CON/2012/53) 

Introduction and legal basis 

On  12  June  2012  the  European  Central  Bank  (ECB)  received  a  request  from  the  Slovak  Ministry  of 

Finance for an opinion on a draft law amending Law No 384/2011 on a special levy on selected financial 

institutions and on amendments to certain laws, and Law No 118/1996 on the protection of deposits and 

on amendments to certain laws (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 relates 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 

The  purpose  of  the  draft  law  is  to  amend  Law  No  384/2011,  on  the  draft  of  which  the  ECB  issued 

Opinion CON/2011/66, and Law No 118/1996. The proposed amendments concern the following areas: 

1.1  Rules concerning the bank levy.  

Under the draft law, the levy introduced by Law No 384/2011 will no longer exclude from its base the 

value of: (a) deposits received by a bank or the branch of a foreign bank (hereinafter the ‘bank’) within 

the territory of the Slovak Republic and protected within the Slovak Deposit Protection Fund (hereinafter 

the ‘Fund’); and (b) deposits received by a bank within the territory of the Slovak Republic and protected 
in other Member States of the European Economic Area2. Moreover, the draft law imposes an obligation 

for  banks  to  pay,  together  with  the  instalment  of  the  regular  bank  levy  for  the  last  quarter  of  2012,  an 
extraordinary one-off levy of 0.1% of the bank levy base3. This extraordinary levy is intended to support 

the development programmes of the Slovak government and to enhance own sources of funding for legal 

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OJ L 189, 3.7.1998, p. 42.  
Article I(1) of the draft law. 
Article I(5) of the draft law (proposed new Article 7(1)). 

 
 
 
 
                                                 
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entities established to promote the foreign trade operations of exporters and importers4. Finally, the draft 
law also introduces a provision5 under which the bank may neither increase, nor introduce, new financial 
consideration6  to  cover  higher  costs  triggered  by  the  increased  levy.  If  there  is  an  increase  in  financial 

consideration which is unrelated to the payment of the levy, the grounds for the increase will need to be 

disclosed.   

1.2  Rules concerning contributions to the Fund.  

Under Law No 118/1996 the Fund itself determines the amount of annual contributions which it receives 

from the member banks. Under the draft law, the amount will be determined either by Law No 118/1996 
or  by  the  Fund.7  At  the  same  time,  the  draft  law  establishes  that  the  member  banks  will  not  pay  any 
contributions to the Fund in 2013.8  

2. 

Financing and governance of a bank resolution fund  

2.1  Law  No  384/2011  introducing  the  bank  levy  specified  that  its  sole  purpose  is  the  provision  of 
financing to a dedicated resolution mechanism for banks9. The ECB recommended in its previous 

opinion the introduction of: (a) a clear separation between the extra-budgetary account created out 

of the levy proceeds and the general budgetary resources; and (b) detailed rules on the application 
of  the  resolution  fund  to  finance  the  bank  resolution  measures10.  The  ECB  reiterates  those 

recommendations, given that that they have not been taken into account in Law No 384/2011. At 

the same time, the ECB invites the Slovak authorities to take into account that their approach may 

need  to  be  adjusted  in  the  light  of  ongoing  harmonisation  of  the  Union  framework  for  bank 
recovery and resolution11. 

2.2  Further,  the  ECB  notes  that  the  obligation  to  pay  the  bank  levy under  Law  No  384/2011  applies 

among others to Slovak branches of credit institutions located in other Member States. As already 

pointed out by the ECB, this may lead to double charging of a bank levy by the Slovak authorities 
and  by  the  authorities  of  the  relevant  home  Member  State12.  The  ECB  reiterates  its 

recommendation that the Slovak authorities should address the risk of double charging adequately 
following the harmonised solutions which are being developed in this respect at Union level13.  

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Article I(5) of the draft law (proposed new Article 7(2)). 
Article I(5) of the draft law (proposed new Article 6(1)). 
Financial  considerations  include,  inter  alia,  prices,  charges,  fees  and  interest  rates.  See  also  the  specific  part  of  the 
explanatory memorandum relating to Article I(5).  
Article II(2) of the draft law. 
Article II(3) of the draft law. 
Article 4(3) of Law No 384/2011. See paragraph 3.1 of the Opinion CON/2011/66. All ECB opinions are available on the 
ECB’s website at www.ecb.europa.eu. 
Paragraphs 3.2.1-2 of the Opinion CON/2011/66.  
See the proposal for a directive of the European Parliament and of the Council establishing a framework for the recovery 
and resolution of credit institutions and investment firms and amending Council Directives 77/91/EEC and 82/891/EC, 
Directives  2001/24/EC,  2002/47/EC,  2004/25/EC,  2005/56/EC,  2007/36/EC  and  2011/35/EC  and  Regulation  (EU)  No 
1093/2010, COM(2012) 280 final (hereinafter the ‘proposed directive on bank recovery and resolution’). 
Paragraph 2.1 of Opinion CON/2011/66.  
See, in particular, Article 94(1) of the proposed directive on bank recovery and resolution. 

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2.3  The  extraordinary  one-off  levy  introduced  by  the  draft  law  is  unrelated  to  the  establishment  of  a 

dedicated resolution mechanism for banks. The ECB recommends that the proceeds from this levy 

are  clearly  separated  from  the  proceeds  of  the  regular  bank  levy  established  for  bank  resolution 

purposes  and  that  the  dedicated  extra-budgetary  account  used  for  collection  of  the  regular  bank 
levy14 is not used for other purposes. 

3. 

Financing of the deposit guarantee scheme 

As already noted by the ECB15, deposit protection is an important element of the financial safety 

net  and  therefore  contributes  to  safeguarding  financial  stability.  According  to  international 

standards,  sound  funding  arrangements  are  critical  to  the  effectiveness  of  deposit  guarantee 
schemes  and  the  maintenance  of  public  confidence  in  the  banking  system16.  In  this  respect,  the 

ECB would like to make the following remarks. 

First, the contributions to the deposit guarantee scheme are currently collected and managed by the 

Fund,  which  is  a  self-standing  legal  entity  and  which  has  the  power  to  determine  the  amount  of 
annual  contributions  paid  by  the  member  banks17.  The  draft  law  foresees  that  the  amount  of  the 

annual contributions should in the future be determined either by the Fund or by Law No 118/1996 

i.e. by the legislature. The proposed wording is ambiguous, as it is not clear which method takes 

precedence. 

Second, while Directive 94/19/EC of the European Parliament and of the Council of 30 May 1994 
on deposit-guarantee schemes18 does not prescribe a specified funding level for deposit guarantee 

schemes,  it  refers  to  the  need  to  ensure  that  the  financing  capacities  of  the  schemes  are  in 
proportion to the liabilities of their member credit institutions19. At the same time, the proposal for 
a recast of Directive 94/19/EC20 introduces a rule under which credit institutions will be required to 

make  annual  contributions  to  deposit  guarantee  schemes  with  a  view  to  achieving  a  pre-defined 
funding  level21.  The  proposed  suspension  of  the  member  bank  contributions  to  the  Fund  is 

introduced  by  the  draft  law  without  having  safeguarded  that  the  Fund  has  achieved  an  adequate 

funding level and hence it contravenes the above principles. The ECB therefore recommends not 

introducing such a suspension of the contributions to the Fund. 

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21  

Article 4(1) of Law No 384/2011. 
Paragraph 8 of Opinion CON/2005/50 and paragraph 2.5 of Opinion CON/2007/26. 
See  ‘Guidance  for  developing  effective  deposit  insurance  systems’,  Financial  Stability  Forum,  September  2001,  point 
V.4. 
Article 6(2) of Law No 118/1996. 
OJ L 135, 31.5.1994, p. 5. 
Recital 23 of Directive 94/19/EC. 
See the proposal for a directive …/…/EU of the European Parliament and of the Council on deposit guarantee schemes 
(recast), COM(2010) 368 final – COD 2010/0207 (hereinafter the ‘proposed directive on deposit guarantee schemes’). 
Article 9(1) of the proposed directive on deposit guarantee schemes.  

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

Done at Frankfurt am Main, 16 July 2012. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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