Opinion of the European Central Bank of 23 July 2012 on a stabilisation fund for banks (CON/2012/58)
Date: 2012-07-23
Institutions: European Central Bank
Subjects: Poland, bank deposit, credit institution, financial stability, guarantee, national law, public institution

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 23 July 2012 

on a stabilisation fund for banks 

(CON/2012/58) 

Introduction and legal basis 

On  19  June  2012,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Polish  Minister  for 

Finance for an opinion on a draft law amending the Law on the Bank Guarantee Fund and certain other 

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  third  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 law relates to the Narodowy Bank Polski 

(NBP) and 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 

1.1  The draft law aims at enhancing the Polish framework for crisis management in the financial sector 

by  establishing  an  industry-funded  stabilisation  fund  for  credit  institutions,  formed  as  a  sub-fund 

under  the  management  of  the  Bank  Guarantee  Fund  (‘BFG’),  the  operator  of  the  Polish  deposit 
guarantee  scheme2.  An  existing  BFG  sub-fund,  which  is  dedicated  to  providing  assistance  to  the 

banks  covered  by  the  deposit  guarantee  scheme,  will  continue  to  exist  in  parallel  to  the  newly-
created fund3.  

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OJ L 189, 3.7.1998, p. 42. 
To  this  end  the  draft  law  amends  (a)  the  Law  of  14 December  1994  on  the  Bank  Guarantee  Fund,  consolidated  text 
published  in  Dziennik  Ustaw  (Dz.  U.)  of  2009  No  84,  item  711  (hereinafter  the  ‘Law  on  BFG’);  and  (b)  the  Law  of 
12 February 2010 on the recapitalisation of certain financial institutions, Dz. U. of 2010 No 40, item 226 (hereinafter ‘the 
Law on recapitalisation’). 
According to Article 4(2)(1) and (1a) in connection with Articles 19 and 20 of the Law on BFG, the existing assistance 
fund  is  used  by  the  BFG  to  provide  the  entities  covered  by  the  obligatory  deposit  guarantee  scheme  with  returnable 
financial assistance (in the case of an insolvency threat or for the acquisition of banks’ shares), and for acquiring claims 
of  banks  threatened  with  insolvency.  See  also  paragraphs  32(2)  and  34  of  the  BFG’s  Statute  as  introduced  by  the 
Regulation  of  the  Minister  for  Finance  of  14  September  2009  on  establishing  the  Statute  of  the  Bank  Guarantee  Fund 
(Dz. U. of 2009 No 164, item 1308). 

 
 
 
 
                                                 
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1.2  The proposed sources of financing of the stabilisation fund include: (a) a pre-defined proportion of 

the  mandatory  annual  contributions  of  institutions  covered  by  the  obligatory  deposit  guarantee 

scheme; and (b) a one-off payment to be made by those institutions in the year of the draft law’s 

entry into force. The funds in the stabilisation fund will primarily be used to finance or co-finance 

recapitalisation  guarantees  granted  in  accordance  with  the  Law  on  recapitalisation  and  will  be 

subject mutatis mutandis to the application of the relevant procedures and modalities laid down in 
that Law4. Moreover, the draft law expands the list of eligible securities in which available BFG 

funds (not limited to those in the stabilisation fund) may be invested to include securities issued or 
guaranteed by governments or central banks of, inter alia, Union Member States5. 

1.3  

In  addition,  the  draft  law  amends  information-sharing  arrangements  by:  (a)  enabling  the  NBP  to 

effectively  obtain  from  the  BFG  any  information  necessary  for  it  to  fulfil  its  financial  stability 
mandate and introducing reciprocity6; and (b) enabling the sharing of relevant information between 
the  Polish  Financial  Supervision  Authority  and  the  BFG7.  Finally,  the  draft  law  expands  the 
membership of the Financial Stability Committee8 to include the President of the BFG9.  

2.   General observations 

Assistance measures that may be offered by the BFG through the stabilisation fund are presently 

defined in the Law on recapitalisation as measures aiming to address solvency problems at a failing 

bank. The ECB understands that the Polish authorities contemplate further expansion of the role of 
the BFG10 which may in the future perform functions of a resolution authority designated under a 
harmonised  Union  framework11.  The  ECB  supports  this  intention  to  implement  a  fully-fledged 

bank resolution regime, in which the designated authority uses resolution tools harmonised under 

Union law, offering legally sound means of resolving non-viable institutions. The implementation 

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Under the Law on recapitalisation, a recapitalisation guarantee may be granted to a distressed financial institution by the 
Minister  for  Finance,  resulting  in  the  State  Treasury  acquiring  shares,  bonds  or  other  debt  instruments  issued  by  the 
recapitalised financial institution in cases where such instruments are not acquired by market entities. See in this respect 
Opinion CON/2009/19 (all ECB opinions are published on the ECB’s website at www.ecb.europa.eu). According to new 
Article 6(2a) of the Law on recapitalisation, inserted by Article 4 of the draft law, the Minister for Finance, having taken 
a  decision  to  grant  a  recapitalisation  guarantee,  may  request  the  BFG  to  provide  financing  or  co-financing  of  the 
guarantee from the stabilisation fund. 
See Article 16(3) of the Law on BFG, as amended by Article 1(5)(c) of the draft law.  
See Article 38(4a) of the Law on BFG, inserted by Article 1(9) of the draft law. 
See Article 17a of the Law of 21 July 2006 on financial market supervision, Dz. U. of 2008 No 209, item 1317, inserted 
by Article 2 of the draft law 
Established by the Law of 7 November 2008 on the Financial Stability Committee, Dz. U. of 2006 No 157, item 1119. 
The Financial Stability Committee is a body currently comprising: the Minister for Finance (as Chairman), the President 
of NBP and the Chairman of the Financial Supervision Authority. It is responsible for the fostering and protection of the 
stability of the national financial system through the exchange of information and coordination of activities in this area. 
See also Opinion CON/2008/39. 
See Article 4(1) of the Law on the Financial Stability Committee, as amended by Article 3(2) of the draft law. 
See p. 11 of the draft law and its explanatory memorandum. 
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 bank resolution directive’).  

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of such a harmonised framework would achieve the objective of ensuring financial stability while 

preserving  a  level  playing  field,  limiting  distortions  to  competition,  and  addressing  stakeholder 

rights. At the present stage, the ECB invites the Polish authorities to adopt a flexible approach in 

this respect, capable to adapting to the evolving Union framework. 

3.  

Specific observations 

3.1   Financing of the BFG’s function related to deposit guarantees  

Directive  94/19/EC  of  the  European  Parliament  and  of  the  Council  of  30  May  1994  on 
deposit-guarantee schemes12 requires that deposit guarantee schemes should be in a position to pay 
duly verified claims by depositors in the periods specified by this Directive13.This implies that the 

deposit  guarantee  schemes  should  have  adequate  financial  means  at  their  disposal  to  realise  this 
objective14. A deposit guarantee scheme’s deposit guarantee role and its assistance role should be 

well separated. Therefore, the financial resources available for paying guaranteed deposits should 

be ring-fenced and, if necessary, only used to cover the part of the assistance cost that indirectly 
ensures  the  depositors’  protection15.  This  is  crucial  to  ensure  that  the  objective  of  the  deposit 

guarantee  scheme  is  fully  respected.  In  this  context,  the  ECB  welcomes  the  fact  that  the 
recapitalisation guarantees will be granted by the BFG at its discretion16, solely on the basis of the 
funds explicitly allocated to the stabilisation fund in accordance with its financing regime17. 

3.2  Financing of the BFG’s function related to bank resolution  

In  accordance  with  its  previous  opinions18,  the  ECB  invites  the  Polish  authorities  to  consider 

introducing rules for replenishing the funds in the stabilisation fund where part or all of such funds 

are used to finance recapitalisation measures.  

3.3  Compliance with the monetary financing prohibition 

At  the  same  time,  the  ECB  reiterates  its  position  concerning  the  limited  conditions  under  which 

central bank credit may be provided to deposit guarantee schemes without breaching the monetary 

financing prohibition contained in Article 123 of the Treaty in connection with Council Regulation 
(EC)  No  3603/9319.  As  pointed  out  in  the  ECB’s  convergence  reports20  and  several  opinions 

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OJ L 135, 31.5.1994, p. 5. 
See Article 10(1) of Directive 94/19/EC. 
See  recital  23  of  Directive  94/19/EC  specifying  that  the  financing  capacity  of  deposit  guarantee  schemes  must  be  in 
proportion to their liabilities; see also paragraph 2.5 of Opinion CON/2007/26. 
See the European System of Central Banks contribution to the Commission’s public consultation on the technical details 
of a possible EU framework for bank recovery and resolution, May 2011, p. 18; see also Article 99(1) of the proposed 
bank resolution directive. 
See new Article 20e(1) of the Law on BFG, inserted by Article 1(8) of the draft law.  
See Articles 7(2)(5a)(b) and 20c(1) of the Law on BFG, as amended by Articles 1(3)(a) and 1(8) of the draft law, and 
Article 5(4) of the draft law. 
See paragraph 3.6 of Opinion CON/2011/29 and paragraph 2.4 of Opinion CON/2011/66.  
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).  

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directed to the Polish authorities, the NBP may only extend credit to the BFG where such credit is 

provided for a short term, addresses urgent situations, with systemic stability aspects being at stake, 
and with decisions remaining at NBP’s discretion21. Presently the Polish law complies with those 

conditions  as  it  provides  for  a  possible  extension  by  the  NBP,  under  its  discretion,  of  short-term 

credit to the BFG related to the financing of its deposit guarantee function, if a threat to financial 
stability  arises  and  in  view  of  its  urgent  needs22.  In  line  with  its  previously  stated  position23,  the 

ECB  considers  that  provision  of  central  bank  credit  to  the  national  deposit  guarantee  fund  for 

purposes not related to pay-outs of guaranteed deposits, but related to its recapitalisation functions, 

would  constitute  central  bank  financing  of  a  public  sector  function  in  breach  of  the  monetary 
financing  prohibition24.The  ECB  understands  that  the  draft  law  complies  with  the  monetary 

financing prohibition, as the financing of assistance  measures conducted through the stabilisation 

fund  (i.e.  the  recapitalisation  functions)  is  not  linked  to  the  mechanism  for  the  activation  of 

guaranteed deposits described in Article 16a of the Law on BFG. Therefore, the ECB understands 

that such assistance  measures  will not be financed by way of central bank credit extended to the 

BFG.  

3.4 

Information sharing arrangements 

In  view  of  its  previous  recommendations25,  the  ECB  welcomes  the  proposed  amendment  of 

Article 38(4a)  of  the  Law  on  BFG  as  this  will  give  the  NBP  access  to  prudential  information 

possessed,  inter  alia,  by  the  BFG,  which  will  allow  the  NBP  to  properly  perform  its  financial 

stability role. 

3.5  The ECB understands that the inclusion of the BFG President in the composition of the Financial 

Stability Committee aims to reflect the new financial stability tasks, which are explicitly assigned 
to the BFG under the draft law26 and which the BFG will perform vis-à-vis the banks covered by 

the  obligatory  deposit  guarantee  scheme.  The  ECB  welcomes  this  development  as  it  reflects  the 

rising  role  of  the  BFG  in  the  financial  safety  net  of  the  Polish  financial  system  and  ensures  the 

involvement in the Financial Stability Committee’s work of all relevant bodies, thereby facilitating 

effective exchange of information and coordination of financial stability activities. 

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26 

See, for example, the ECB’s Convergence Report of May 2012, p. 30. 
See  paragraph  2.1  of  Opinion  CON/2007/26,  paragraph  2.2  of  Opinion  CON/2008/5  and  paragraph  2.2  of  Opinion 
CON/2008/32. 
See Article 43 of the Law on Narodowy Bank Polski of 29 August 1997 (consolidated text: Dz.U. of 1 April 2005 No 1, 
item 2) together with Article 16a(5) of the Law on BFG. See also paragraph 2 of Opinion CON/2010/64. 
Cf. paragraph 2.6 of Opinion CON/2008/32. 
Cf. Article 1(1)(ii)(b) of Regulation (EC) No 3603/93.  
See paragraph 3.2 of Opinion CON/2010/64.  
See new Article 4(4) of the Law on BFG, added by Article 1(2)(b) of the draft law. 

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

Done at Frankfurt am Main, 23 July 2012. 

[signed] 

The Vice-President of the ECB 

Vítor CONSTÂNCIO 

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