Opinion of the European Central Bank of 18 September 2013 on the establishment of a Financial Stability Board and the macro-prudential mandate of national authorities (CON/2013/70)
Date: 2013-09-18
Institutions: European Central Bank
Subjects: Slovenia, financial stability, financial supervision, national law, supervisory power

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 18 September 2013  

on the establishment of a Financial Stability Board 

and the macro-prudential mandate of national authorities 

(CON/2013/70) 

Introduction and legal basis 

On 27 August 2013, the European Central Bank (ECB) received a request from the Slovenian Ministry of 

Finance  for  an  opinion  on  a  draft  law  on  the  macro-prudential  supervision  of  the  financial  system 

(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 Banka Slovenije 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 draft law 

1.1  The draft law implements Recommendation ESRB/2011/3 of the European Systemic Risk Board of 
22 December 2011 on the macro-prudential mandate of national authorities2 (hereinafter the ‘ESRB 

Recommendation’).  To  this  end,  it  provides  for  the  establishment  of  a  Financial  Stability  Board 

(FSB), which will be responsible for macro-prudential policy aimed at preventing and  mitigating 

systemic  risks  to  financial  stability.  Macro-prudential  policy  will  be  implemented  by  the  FSB 

together  with  the  three  independent  national  authorities  responsible  for  supervising  relevant 

institutions  in  their  respective  segments  of  the  financial  system:  Banka  Slovenije,  the  Securities 
Market Agency and the Insurance Supervision Agency (hereinafter the ‘supervisory authorities’)3. 

1.2  The FSB will be composed of eight members: two representatives of each of the three supervisory 

authorities,  and  two  representatives  of  the  Ministry  of  Finance.  The  supervisory  authorities’ 

representatives will have one vote each, but the Ministry of Finance’s representatives will not have 

voting rights. The Governor of Banka Slovenije will be the FSB’s President and will chair the FSB 

1  
2  
3  

OJ L 189, 3.7.1998, p. 42. 
OJ C 41, 14.2.2012, p.1.  
See Articles 1 to 4 of the draft law. 

 
 
 
 
                                                 
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meetings.  The  FSB  will  take  decisions  at  its  meetings,  which  will  be  normally  convened  by  the 

FSB’s  President  four  times  a  year,  but  may  also  be  convened  on  the  initiative  of  any  other  FSB 

member.  The  quorum  for  decision-making  will  be  met  if  five  members  with  voting  rights  are 

present at the meeting. The FSB’s secretariat will be provided by Banka Slovenije and will ensure 

analytical,  administrative  and  logistical  support  to  the  FSB.  The  supervisory  authorities  will 

cooperate  with  the  secretariat  in  preparing  and  providing  the  material  to  be  discussed  at  FSB 
meetings and in performing its other tasks4. 

1.3  The FSB will be empowered to issue guidance to the supervisory authorities in the form of non-

binding  recommendations,  warnings  and  instructions,  in  the  following  situations:  (a)  if  it  sees  a 

need  to  prevent  or  mitigate  systemic  risk  to  financial  stability;  or  (b)  in  order  to  implement  the 

European  Systemic  Risk  Board’s (ESRB)  warnings  and  recommendations. More  specifically,  the 

FSB will issue: (a) recommendations, where a disruption could occur in the financial system which 

may potentially lead to serious negative consequences for the functioning of the financial system 

and  the  real  economy,  if  voted  for  by  a  majority  of  FSB  members  present  at  the  meeting;  (b) 

warnings, where such a disruption in the financial system has already occurred and could have such 

consequences, if voted for by at least four FSB members; and (c) instructions, where a disruption 

has already occurred and has such consequences, if voted for by at least five  FSB members. The 

FSB’s  guidance  will,  in  particular,  define  the  systemic  risk  identified  and  the  competent 

supervisory authority to which implementation of the guidance will be proposed. If appropriate, the 

FSB will also propose a particular macro-prudential supervisory measure. The FSB will decide on 

a case-by-case basis whether the guidance is to be published. The supervisory authority to which 

the guidance will be addressed shall, within seven working days of receipt of the guidance, either 
implement it or provide an explanation to the FSB of its reasons for non-implementation5. 

1.4  When implementing macro-prudential policy, the supervisory authorities will be responsible for the 

macro-prudential  supervision  of  institutions  which  they  supervise  pursuant  to  the  Law  on  Banka 

Slovenije, the Law on banking, the Law on the financial instruments market, the Law on insurance, 

the  Law  on  investment  funds  and  management  companies,  and other laws  pursuant to  which  the 
supervisory authorities carry out their tasks (hereinafter the ‘sectoral laws’6). They will implement 

FSB  guidance  issued  to  them  in  accordance  with  their  competences  by  applying  the  available 

supervisory  measures.  The  supervisory  authorities  will  conduct  macro-prudential  supervision  of 

relevant  institutions  by  monitoring,  collecting  and  verifying  their  reports  and  notifications;  by 

inspecting their operations; and by taking supervisory measures pursuant to the sectoral laws and 

the draft law. The supervisory authorities will also, inter alia, assess systemic risks in their field of 

competence, and propose to the FSB a means of identifying systemically important institutions and 

the  appropriate  action  to  be  taken.  Together  with  the  FSB  the  supervisory  authorities  will 

4  
5  
6  

See Articles 5 to7 and Article 10 of the draft law. 
See Articles 9 to 11 and 17(2) of the draft law. 
See Article 2 of the draft law. 

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participate  in  ESRB  activities  and  follow  its  recommendations,  in  default  of  which  they  shall 
provide an explanation to the FSB of their reasons for any non-compliance with such acts7. 

1.5  The draft law lays down the rules for the collection and exchange of information and the protection 
of confidentiality in order to achieve the effective application of macro-prudential policy8. It also 
lays down rules for cross-border cooperation between relevant authorities9. 

2. 

General observations 

2.1  The ECB supports the effective design of macro-prudential policy frameworks within the Member 

States, in line with the guiding principles expressed in the ESRB Recommendation. Moreover, the 

ECB  and  national  central  banks  should  play  a  leading  role  in  macro-prudential  oversight,  given 
their expertise and existing responsibilities in the area of financial stability10.  

2.2  The draft law suggests  that it is the intention of the  consulting authority to confer such a leading 

role  to  Banka  Slovenije  by  (a)  designating  the  Governor  of  Banka  Slovenije  as  President  of  the 

FSB,  entrusted  with  convening  and  chairing  its  regular  meetings,  and  (b)  assigning  to  Banka 

Slovenije  a  competence  to  provide  the  FSB  Secretariat.  In  addition,  Banka  Slovenije  will  be 

responsible for the macro-prudential supervision of financial institutions pursuant to sectoral laws, 
as well as leasing firms11. 

2.3 

In line with observations made in previous ECB opinions12, Banka Slovenije’s mandate to perform 

macro-prudential 

tasks  should  not  affect:  (a) 

its 

institutional,  functional  and  financial 

independence; or (b) the performance by the European System of Central Banks of its tasks under 

the Treaty and the Statute of the European System of Central Banks and of the European Central 

Bank.  The  ECB  welcomes  Article  12(2)  of  the  draft  law,  which  explicitly  states  that  neither  the 

performance of the tasks under the draft law nor the content of FSB guidance shall interfere with 

the supervisory authorities’ fundamental objectives and independence. 

2.4  The ECB understands that the FSB guidance provided to supervisory authorities under Article 9(1) 

will  be  limited  to  ensuring  correct  and  timely  implementation  of  the  ESRB  recommendations, 

where the ESRB has adopted recommendations on the same matter, and will be without prejudice 

to  obligations  on  the  addressees  of  ESRB  recommendations,  pursuant  to  Regulation  (EU)  No 
1092/201013. 

7  
8  
9  
10  

11  
12  
13  

See Articles 17 to 19 of the draft law. 
See Articles 4(4), 14 to 16 and 21 of the draft law. 
See Article 4, Article 13(3) and Article 15 of the draft law. 
See,  for  example,  paragraph  2.1  of  Opinion  CON/2013/66,  paragraph  2.1  of  Opinion  CON/2013/54,  paragraph  2.1  of 
Opinion  CON/2013/45  and  paragraph  2.1  of  Opinion  CON/2013/30.  All  ECB  opinions  are  published  on  the  ECB’s 
website at www.ecb.europa.eu. 
See Article 17(1) of the draft law. 
See, for example, paragraph 2.2 of Opinion CON/2013/45 and paragraph 2.3 of Opinion CON/2013/30. 
Regulation (EU) No 1092/2010 of the European Parliament and of the Council of 24 November 2010 on European Union 
macro-prudential  oversight  of  the  financial  system  and  establishing  a  European  System  Risk  Board,  OJ  L  331, 
15.12.2010, p. 1. 

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2.5 

In  order  to  facilitate  the  FSB’s  ability  to  efficiently  coordinate  cooperation  between  supervisory 

authorities  and  to  harmonise  the  use  of  macro-prudential  supervisory  measures  applied  without 

formal guidance from the FSB, the draft law may provide that supervisory authorities should, in a 

timely and appropriate manner, inform the FSB and other supervisory authorities of the measures 

taken. 

2.6 

In line with observations made in previous  ECB opinions14, the consulting authority is invited to 

revise Article 4(5) and Article 15(5) of the draft law to ensure that the FSB shall also cooperate and 

exchange  data  and  information  with  the  ECB  and  the  ESRB,  in  accordance  with  the  ESRB 

Recommendation. 

2.7  This  opinion  is  without  prejudice  to  the  conclusions  of  the  follow-up  assessment  of  the  above 

mentioned ESRB Recommendation, which the ESRB will prepare in accordance with Article 17 of 

Regulation (EU) No 1092/2010. 

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

Done at Frankfurt am Main, 18 September 2013. 

[signed] 

The President of the ECB 

Mario DRAGHI 

14  

See paragraph 2.4 of Opinion CON/2013/54. 

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