Opinion of the European Central Bank of 14 December 2012 on asset management companies (CON/2012/108)
Date: 2012-12-14
Institutions: European Central Bank
Subjects: Spain, aid for restructuring, credit institution, financial stability, investment company, issue of securities, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 14 December 2012  

on asset management companies 

(CON/2012/108) 

Introduction and legal basis 

On 14 November 2012, the European Central Bank (ECB) received a request from the Spanish Secretary 

of State for Economic Affairs and Business Support for an opinion on a draft Royal Decree (hereinafter 

the ‘draft law’) on the legal regime for asset management companies (AMCs).  

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  on  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 Banco de España and to 

rules applicable to financial institutions that 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 and contents of the draft law  

1.1  Legal framework 

The  draft  law  implements  Law  9/2012  of  14  November  2012  on  restructuring  and  resolution  of  credit 
institutions2,  as  regards  the  legal  framework  for  AMCs  in  general  and  for  the  Asset  Management 

Company for Assets Resulting from Bank Restructuring (hereinafter the ‘SAREB’).  

1.2  AMCs’ objectives  

Article 3 of the draft law provides that AMCs must pursue the following objectives: (i) help restore the 

financial system by acquiring impaired assets harmful to the credit institutions’ balance sheets so that the 

associated risks are transferred to the AMCs; (ii) minimise public financial support; (iii) pay the debts and 

obligations incurred in the course of conducting their activities; (iv) minimise potential market distortions 

resulting from their actions; (v) dispose of the acquired assets in such a way that their value is optimised. 

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2  

OJ L 189, 3.7.1998, p. 42.  
BOE 275, 15.11.2012. 

 
 
 
 
                                                 
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1.3  Roles of the Fund for Orderly Bank Restructuring and the Banco de España 

The Fund for Orderly Bank Restructuring (hereinafter the ‘FROB’) defines the categories of assets to be 

transferred on the basis of pre-determined qualitative and quantitative criteria. The Banco de España may 

extend the criteria, define them more precisely and resolve doubts as to the inclusion of an asset in the 

defined categories. Once the valuation adjustments have been made and the transfer value determined by 

the Banco de España, the FROB orders the definitive transfer of the assets. The price to be paid for the 

assets is subject to valuation adjustments and criteria, taking into account whether the assets are listed on 

an active market and whether they are real estate assets, credit rights or equity instruments. The Banco de 

España  determines  the  final  transfer  value  on  the  basis  of  valuation  reports  by  independent  experts  in 

accordance  with  the  valuation  criteria  set  out  in  the  draft  law.  The  transfer  value  is  expressed  for  each 

category of assets as a percentage of the book value after applying the required valuation adjustments. 

1.4   Regime applicable to the SAREB 

The draft law also lays down the regime applicable to the SAREB and its separate capital structures, the 

Bank Asset Funds, to which it may transfer its assets in order to facilitate the divestment procedure. 

The SAREB  will be incorporated for a  maximum period of 15 years as a public limited  company with 

special features deriving from its unique corporate purpose and the public interest nature of its activities. 

Its  only  purpose  is  the  holding,  direct  or  indirect  management,  acquisition  and  disposal  of  assets  to  be 

transferred to it by credit institutions receiving public support. These institutions receive debt securities 

issued by the SAREB with a State guarantee as payment for the assets transferred. 

The assets to be transferred will include foreclosed assets with a net book value over EUR 100 000 after 

applying  the  required  adjustments,  loans  to  real  estate  developers  with  a  net  book  value  over 

EUR 250 000  after  applying  the  required  adjustments,  and  controlling  corporate  holdings  linked  to  the 

real estate sector. The SAREB will have a maximum financial limit of EUR 90 billion.  

Public  participation  in  the  SAREB  will  be  below  50%,  and  it  will  have  to  meet  certain  corporate 

governance requirements. One-third of its Board will be composed of independent members and it will be 

obliged  to  establish  committees  on  audit,  remuneration,  appointments,  management,  risks,  investments 

and assets and liabilities. The board members of the SAREB will be obliged to meet strict requirements 

with regard to their professionalism, integrity and relevant experience.  

The  SAREB  will  prepare  a  six-monthly  activity  report;  an  independent  expert  will  prepare  an  annual 

compliance report on the SAREB; and an external Monitoring Commission will be set up, and may agree 

to include permanent observers. The Monitoring Commission will oversee compliance with the SAREB’s 

general  objectives,  including,  inter  alia,  helping  restore  the  financial  system  by  receiving  the  relevant 

assets  so  that,  from  the  valuation  date,  there  is  an  effective  transfer  of  the  risks  associated  with  these 

assets. In this role, the Monitoring Commission will receive the SAREB’s activity and compliance reports 

and may request, and have full access to, information from the SAREB relating to its business plan and 

deviations from it; policies on divestment and amortisation of guaranteed debt; its economic and financial 

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situation  or  forecast;  and  any  other  information  regarding  assets,  budget,  accounts,  organisation  or 
procedures3.  Regarding  the  obligation  to  give  the  Monitoring  Commission  full  access  to  the  requested 

information, the SAREB is subject to a penalty regime under Law 26/1988 of 29 July 1988 on discipline 
and  intervention  of  credit  institutions4.  In  order  to  facilitate  the  performance  of  the  Monitoring 

Commission’s  functions,  the  Banco  de  España  and,  where  appropriate,  the  National  Securities  Market 

Commission,  must  inform  the  Monitoring  Commission  of  the  main  conclusions  arising  from  their 
supervision of the SAREB5. 

2. 

General observations  

The  draft  law  implements  provisions  which  have  been  adopted  in  the  context  of  the  Memorandum  of 
Understanding  on  Financial-Sector  Policy  Conditionality  for  Spain6.  The  ECB  welcomes  this 

implementation as an important tool to facilitate the ongoing process of restructuring and recapitalising 

the Spanish banking sector.  

3. 

Eligibility of SAREB debt securities as collateral in Eurosystem credit operations 

The ECB notes that participating banks will receive debt securities issued by the SAREB and guaranteed 

by Spain. Overall, the issuance of government guaranteed securities should improve the liquidity position 

of Spanish banks. These securities are structured to meet the conditions set out in Guideline ECB/2011/14 
of  20  September  2011  on  monetary  policy  instruments  and  procedures  of  the  Eurosystem7.  The  ECB 

would  expect  that  as  such  the  debt  securities  would  be  marketable,  which  could  also  contribute  to 

increasing the possibility of Spanish banks to refinance themselves in the market. As such, the SAREB 

scheme is expected to improve the overall funding situation of the Spanish banks. The ECB emphasises 

that  it  is  the  prerogative  of  the  Eurosystem  to  decide  on  the  basis  of  any  information  it  may  consider 

relevant  within  the  legal  framework  laid  down  in  and  according  to  Article  18.1  of  the  Statute  of  the 

European  System  of  Central  Banks  and  of  the  European  Central  Bank,  whether  collateral  fulfils  the 

criteria of its collateral framework.   

4.   ECB’s role as observer in the Monitoring Commission  

The  Eurosystem  has  an  interest  in  the  successful  functioning  of  the  SAREB,  insofar  as  the  SAREB’s 

State-guaranteed  debt  securities  may  be  eligible  collateral  in  Eurosystem  credit  operations.  The  timely 

disposal of assets by the SAREB will facilitate the  further deleveraging of participating banks’ balance 

sheets,  thereby  potentially  reducing  their  reliance  on  Eurosystem  credit  operations.  More  generally,  by 

3  
4  
5  
6  
7  

Article 27 of the draft law. 
BOE 182, 30.7.1998. 
Seventh Additional Provision, paragraph 9, of Law 9/2012. 
Available on the European Commission’s website at http://ec.europa.eu. See paragraphs 9, 21 and 22. 
OJ L 331, 14.12.2011, p. 1. 

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facilitating the transfer of non-performing assets into a separate institution, asset removal schemes such as 

the SAREB assist participating banks in restructuring their balance sheets, which should, in turn, improve 

their financial soundness. By facilitating banking sector restructuring and recovery, albeit by transferring 

risk from the banking sector to the State, such schemes should positively contribute to banks’ ability to 

extend credit and support economic recovery. In addition, the value of the distressed assets may be better 

recovered when consolidated and managed by independent specialists. 

The  ECB  is  ready  to  nominate  a  permanent  observer  to  hold  a  seat  in  the  Monitoring  Commission  in 

accordance with the Eurosystem’s contribution, under Article 127(5) of the Treaty, to the smooth conduct 

of  policies  pursued  by  the  competent  authorities  relating  to  the stability of  the  financial  system.  In  this 

respect, the type of information and reporting the SAREB will be required to provide to the Monitoring 

Commission  will  need  to  be  further  developed  and  clarified,  as  the  Monitoring  Commission  can  only 

effectively fulfil its mandate with appropriate reporting from the SAREB. 

5.   Prohibition on monetary financing  

In  order  to  avoid  monetary  financing  concerns,  the  SAREB  should  not  qualify  as  a  public  undertaking 

within the meaning of Council Regulation 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 Treaty8. 

6. 

Scope and capacity of the SAREB  

The limitations with respect to the scope and capacity of the SAREB are reasonable and consistent with 

its viability.  

7. 

Pricing 

The methodology applied to derive the prices of assets to be acquired by the SAREB appears appropriate 

and  considered,  and  should  lead  to  conservative  prices,  which  in  turn  should  minimise  the  risks  to  the 

vehicle in this respect. 

8. 

Vendor financing 

The establishment of financing arrangements would greatly facilitate asset disposals by the SAREB. As 

the SAREB is not a bank, it cannot extend credit to potential buyers to facilitate asset purchases, but will 

be  competing  with  banks which  offer  such  financing  to buyers  of  foreclosed  and  distressed  assets.  The 

terms of such financing arrangements  should be competitive when compared with the terms offered by 

Spanish banks. 

8  

OJ L 332, 31.12.1993, p. 1. 

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9.   Dividend payments and application of excess cash holdings by the SAREB  

The  draft  law  should  be  complemented  by  additional  arrangements  to  ensure  the  timely  redemption  of 

State-guaranteed bonds. This may be accomplished by imposing limitations on the payment of dividends 

by  the  SAREB  and  ensuring  that  all  cash  held  by  the  SAREB  beyond  that  required  for  short-term 

operating and capital expenses and other liquidity needs is applied to the early repayment of the SAREB’s 

State-guaranteed bonds. These arrangements should not affect the pace of deleveraging – i.e. the pace at 

which  assets  will  have  to  be  disposed  of  –  which  will  depend  on  the  business  plan  approved  by  the 

SAREB’s Board. 

10.   Potential conflicts of interest  

Insofar as the SAREB’s capital comes from certain Spanish credit institutions, care will need to be taken 

to  avoid  potential  conflicts  of  interest  that  might  arise  as  these  institutions  may  also  have  significant 

interests in the Spanish real estate sector. 

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

Done at Frankfurt am Main, 14 December 2012 

[signed] 

The Vice-President of the ECB 

Vítor CONSTÂNCIO 

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