Opinion of the European Central Bank of 9 October 2012 on European Financial Assistance (CON/2012/75)
Date: 2012-10-09
Institutions: European Central Bank
Subjects: Spain, financial institution, financial stability, national law, support mechanism

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 9 October 2012  

on European Financial Assistance 

(CON/2012/75) 

Introduction and legal basis 

On  17  July  2012,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Banco  de  España,  on 

behalf  of  the  Ministry  of  Economic  Affairs  and  Competitiveness  for  an  opinion  on  Royal  Decree-Law 

21/2012  of  14  July  2012  on  liquidity  measures  for  the  General  Government  and  in  the  financial  sector 

(hereinafter the ‘Royal Decree-Law’). The ECB was only consulted on the Fifth Additional Provision of 

the  Royal  Decree-Law  which  relates  to  the  financial  assistance  for  the  recapitalisation  of  financial 

institutions  in  Spain  by  the  European  Financial  Stability  Facility  (hereinafter  the  ‘financial  assistance 

programme’). 

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 Royal Decree-Law concerns the Banco de España and 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 Royal Decree-Law 

The  purpose of  the  Fifth Additional  Provision  is  to clarify  the  competences  of  the  different  institutions 

involved  in  the  implementation  of  the  financial  assistance  programme,  in  order  to  ensure  its  successful 

launch. In particular, the Fifth Additional Provision provides for the following clarifications: 

1.1  The information to be provided by the Banco de España to the European Commission, the ECB, the 

European  Banking  Authority  (EBA),  the  International  Monetary  Fund  (IMF),  the  European 

Financial  Stability  Facility  (EFSF)  and,  where  applicable,  the  European  Stability  Mechanism 

(ESM)  within  the  framework  of  the  financial  assistance  programme  shall  be  exempt  from  the 

secrecy obligation under Article 6 of Royal Decree-Legislation 1298/1986 insofar as disclosure of 

the  relevant  information  is  required  for  the  performance  of  the  functions  of  those  institutions  in 

connection with the financial assistance programme.  

1  

OJ L 189, 3.7.1998, p. 42.  

 
 
 
 
 
                                                 
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1.2  The  Fund  for  Orderly  Bank  Restructuring  (FROB)  is  authorised  to  enter  into  any  agreements  or 

contracts  as  required  in  order  to  formalise  the  financial  assistance  and  to  make  the  financial 

assistance programme available to the State and the FROB.  

1.3 

In  the  context  of  recapitalisation,  the  FROB  may  advance,  as  a  loan,  in  cash or  in  securities,  the 

amount  of  aid  requested  by  participating  credit  institutions.  The  advance  payment  is  subject  to 

certain circumstances which, in the Banco de España’s view, may ultimately impair the stability of 

the credit institution during the time frame required for the effective subscription and payment of 

the  requested  financial  aid  by  the  FROB.  This  advance  payment  will  be  offset  as  a  credit  claim 

against  the  credit  institution  on  the  date  of  subscription  and  disbursement  of  the  instruments 

representing the equivalent amount of own resources. If, the subscription and disbursement do not 

ultimately take place, the credit institution will be obliged to immediately repay to the FROB all of 

the cash or securities granted under the loan. If the amount of the financial support granted is lower 

than  the  amount  of  the  advance,  the  credit  institution  will  immediately  repay  the  corresponding 

excess amount. 

1.4  The  Deposit  Guarantee  Fund  (DGF)  may  adopt  measures  to  facilitate  the  implementation  of  the 

financial  assistance  programme.  The  DGF  may  also  dispose  of  its  assets  for  the  constitution  of 

guarantees requested in the context of such financial assistance. Such commitment and guarantees 

may  be  assumed  by  the  credit  institutions  in  the  framework  of  the  recapitalisation  plans,  as 

approved by the Banco de España. 

2. 

Duty to consult the ECB 

The  Spanish  government  approved  the  Royal  Decree-Law  on  13 July  2012  and  it  was  published  in  the 

Boletín  Oficial  del  Estado  on  14  July  2012,  entering  into  force  on  the  following  day.  The  urgent 

consultation request was received by the ECB on 17 July 2012, which effectively meant that the ECB was 

consulted on an adopted legislation and not on a draft law. The ECB would like to draw the Ministry’s 
attention to the proper procedure for its consultations2. 

3. 

Information shared by the Banco de España 

3.1  The  confidentiality  regime  under  Article  6  of  Royal  Decree-Legislation  1298/1986  imposes  a 

secrecy  obligation  regarding  all  data,  documents  and  information  in  the  Banco  de  España’s 

possession. However, in the performance of its supervisory role, this provision allows the Banco de 

España to share certain information with central banks and other similar monetary authorities when 

the information is relevant for the performance of their relevant statutory functions, for example, in 

the implementation of monetary policy and the corresponding provision of liquidity, the oversight 

of payment, netting and clearing systems and the stability of the financial system.  

2 

See Title IV, Section I of the Guide to consultation of the European Central Bank by national authorities regarding draft 
legislative provisions, available on the ECB’s website at www.ecb.europa.eu. 

2 

 
 
                                                 
ECB-PUBLIC 

3.2  The ECB understands that the supervisory information to be provided by the Banco de España to 

the  ECB  in  the  context  of  the  financial  assistance  programme  would  be  covered  by  the  above 

mentioned  Article  6,  which  permits  the  provision  of  supervisory  information  to  central  banks 

generally. Against this background, the ECB understands that, as far as concerns the information to 

be provided by the Banco de España to the ECB in particular, as distinct from the other institutions 

involved  in  the  financial  assistance  programme,  namely  the  Commission,  the  IMF,  the  EBA  and 

the EFSF or the ESM, the new exemption regarding the Banco de España’s secrecy obligations has 

no material legal impact. The ECB therefore has no objection to the insertion, for the avoidance of 

any possible doubt, of this specific additional clause for the provision of supervisory information 

by the Banco de España to the ECB. 

4. 

Advance of the financial assistance as a loan by the FROB. 

The  ECB  takes  note  of  the  possibility  contained  in  the  Fifth  Additional  Provision  for  the  FROB  to 

advance to any credit institution in the form of a loan, in cash or in securities, the amount of the financial 

aid  requested  by  the  participating  credit  institutions,  and  acknowledges  that  this  tool  will  provide  the 

FROB with additional flexibility to perform the duties conferred under the Financial Assistance Facility 
Agreement3. 

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

Done at Frankfurt am Main, 9 October 2012. 

[signed] 

The President of the ECB 

Mario DRAGHI 

3  

Master Financial Assistance Facility Agreement between the EFSF, the Kingdom of Spain, the FROB and the Banco de 
España, available at http://www.eurozone.europa.eu/media/776296/2012-07-20-ffa-spain.pdf.  

3