Opinion of the European Central Bank of 13 February 2014 on the macro-prudential mandate and instruments of the NBB (CON/2014/16)
Date: 2014-02-13
Institutions: European Central Bank
Subjects: Belgium, banking supervision, central bank, competence of the institution, disclosure of information, financial stability, national law, statistics

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 13 February 2014 

on the macro-prudential mandate and instruments of the NBB 

(CON/2014/16) 

Introduction and legal basis 

On 10 January 2014, the European Central Bank (ECB) received a request from the Minister for Finance 

for an opinion on a draft law establishing instruments of macro-prudential policy and specifying the tasks 

assigned  to  the  Nationale  Bank  van  België/Banque  Nationale  de  Belgique  (NBB)  in  the  context  of  its 

mission to contribute to the stability of the financial system (hereinafter the ‘draft law’). The ECB was 

asked to deliver an opinion within one month so that the ECB’s opinion could be taken into consideration 

before the draft law is submitted to the Belgian Parliament. 

The ECB’s competence to deliver an opinion is based on Article 127(4) and 282(5) of the Treaty on the 

Functioning  of  the  European  Union  and  the  third,  fourth  and  sixth  indents  of  Article  2(1)  of  Council 
Decision  98/415/EC1,  since  the  draft  law  relates  to  the  NBB,  statistics  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/2011/32. 

1.2  Under the draft law the NBB’s mandate is to ‘contribute to the stability of the financial system’, 

which concept is defined as ‘a situation in which the probability of lack of continuity, or disruption, 

of the functioning of the financial system is low or, if such disruptions were to occur, their effects 

on the economy would be limited’. To achieve the objective of contributing to financial stability, 

the  NBB  will  have  the  following  powers:  (a)  to  detect  and  monitor  different  factors  and 

developments which may affect the stability of the financial system; (b) to issue recommendations 

on measures to be implemented by the competent authorities, in order to contribute to the stability 

of  the  financial  system  as  a  whole,  particularly  through  (i)  strengthening  the  robustness  of  the 

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2  

Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national authorities 
regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42). 
Recommendation  ESRB/2011/3  of  the  European  Systemic  Risk  Board  of  22  December  2011  on  the  macro-prudential 
mandate of national authorities. Available on the website of the ESRB at www.esrb.europa.eu. 

 
 
 
 
                                                 
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financial  system,  (ii)  preventing  the  occurrence  of  systemic  risks,  and  (iii)  limiting  the  effect  of 

potential  disruptions;  and  (c)  to  adopt  measures  falling  within  the  ambit  of  its  own  competences 

with a view to achieving the objectives described under (b) above. The draft law stipulates that the 

principle of independence – provided for in Article 130 of the Treaty – will apply to the NBB when 

acting in the context of contributing to the stability of the financial system. 

1.3  The draft law also sets out specific accountability mechanisms under which the NBB is to provide 

the  Chamber  of  Representatives  with  an  annual  report  on  its  activities  in  the  areas  of  prudential 

supervision and contributing to the stability of the financial system. The Governor of the NBB may 

also be invited to hearings before the competent committees of the Chamber of Representatives, be 

it at the request of such committees or at the Governor’s own initiative. 

1.4 

In order to strengthen the framework for the collection of information, the draft law authorises the 

NBB to use any information in its possession or to make use of any entitlements to information it 

has in the context of its other tasks (including that of prudential supervision). The NBB may also 

require a private entity that is not subject to its supervision to provide it with any information that 

entity has which would be useful for discharging the NBB’s macro-prudential mandate. Failure to 

comply  with  such  requirements  may  be  penalised  by  the  imposition  of  administrative  fines. 

Communication of such information to the NBB might be ensured by means of the control function 

exercised by other competent authorities over the private entity in question. Finally, the NBB may 

enter into arrangements to cooperate with the ECB, the European Systemic Risk Board (ESRB), the 

European  supervisory  authorities  (ESAs)  and  foreign  authorities  with  competence  in  the  field  of 

macro-prudential  supervision,  and 

it  may  exchange  confidential 

information  with 

those 

organisations. 

1.5  The  draft  law  provides  that,  in  discharging  its  macro-prudential  mandate,  the  NBB  may,  without 

prejudice  to  the  competences  assigned  to  the  ECB,  use  any  of  the  following  tools  in  respect  of 

financial  institutions:  (a)  the  power  to  impose  own  funds  requirements  or  additional  liquidity 

requirements in respect of all credit institutions or specific categories of credit institutions; (b) the 

power  to  impose  specific  requirements  as  regards  own  funds,  which  may  vary  depending  on  the 

nature of exposures, the value of collateral received by the credit institution concerned, the areas of 

activity or the geographic area of operation of the debtors, such measures being in addition to or 

stricter  than  those  applied  in  the  context  of  prudential  supervision;  (c)  the  power  to  impose 

quantitative  limits  on  exposures  in  respect  of  an  individual  counterparty  or  a  group  of  linked 

counterparties;  (d)  the  power  to  impose  limits  on  the  total  levels  of  activity  of  institutions,  as  a 

percentage of their own funds, which are in addition to or stricter than those applied in the context 

of  prudential  supervision;  (e)  the  power  to  impose  conditions  for  the  valuation  of  collateral 

accepted  against  credits  extended  for  verifying  compliance  with  the  requirements  regarding 

solvency as provided for under or in accordance with prudential legislation; (f) booking all or part 

of  the  distributable  profits  to  an  account  which  cannot  be  accessed  by  the  institution  concerned; 

(g) the power to impose asset valuation rules different from those imposed under accounting rules 

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in the context of prudential supervision; (h) the power to require the disclosure of information in 

addition  to  that  which  may  be  required  under  prudential  supervision  rules  in  respect  of  all  credit 

institutions or those belonging to a specific category; and (i) the power to issue public statements 

on  the  adoption  of  the  abovementioned  measures  and  their  corresponding  objectives.  Prior  to 

imposing any of the abovementioned measures, the NBB shall inform the ESRB, the ECB and, if 

necessary, the ESAs and the European Commission. Prior to imposing own funds requirements or 

any measures intended to reduce systemic risks, the NBB must take into account objections raised 

by the ECB or any other European authority. 

1.6  The NBB may issue recommendations to the ECB or any other Union authorities on measures to be 

adopted and implemented in order to contribute to the stability of the financial system as a whole, 

be  it  by  means  of  measures  intended  to  strengthen  the  robustness  of  the  financial  system,  to 

anticipate the occurrence of systemic risks or to limit the potential effects of disruption. National 

authorities  to  whom  recommendations  are  addressed  are  requested  to  provide  the  NBB  with  a 

formal opinion giving reasons why those recommendations are not followed. If recommendations 

issued by the NBB addressed to federal national authorities are not followed, the King may decide 

to adopt the measures necessary to implement the NBB recommendation concerned by means of a 

royal decree adopted in the Council of Ministers. 

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 Recommendation ESRB/2011/3. The ECB 

welcomes the fact that the NBB plays a leading role in this respect, given its expertise and existing 
responsibilities in the area of financial stability3. 

2.2  The ECB furthermore welcomes that the NBB, in respect of the discharge of this macro-prudential 

mandate, enjoys the same degree of independence as established in Article 130 of the Treaty, which 

shall  also  be  adequately  balanced  with  the  strengthened  accountability  of  the  NBB  before  the 

Chamber of Representatives. In the interests of clarity, it would, however, be appropriate to exclude 

the  power  of  the  Minister  of  Finance  to  exercise  control  over  decisions  made  by  the  NBB  in  the 

discharge of its macro-prudential mandate under Article 22 of the Organic Law of the NBB which, 

in its current form, excludes such control only in respect of the European System of Central Banks’ 

tasks and operations and the prudential supervision described in Article 12 bis of the Organic Law 

of  the  NBB.  Without  prejudice  to  the  principle  of  independence  and  this  proposed  change,  the 

Organic Law of the NBB could be further amended in order to establish specific mechanisms for 

cooperating  with  any  authority  whose  actions  have  a  material  impact  on  financial  stability,  in 

accordance with Recommendation B.2 of Recommendation ESRB/2011/3. 

3  

Opinion  CON/2013/70,  especially  paragraph  2.1.  All  ECB  opinions  are  published  on  the  ECB’s  website  at 
www.ecb.europa.eu. 

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2.3  The  ECB  welcomes  the  strengthening  of  the  methods  for  collecting  information.  The  ECB  also 

welcomes the fact that the NBB may require a wide range of private entities to provide information 

and  that  they  may  be  subject  to  administrative  fines  in  the  event  of  failure  to  comply  with  those 

requirements.  While  the  ECB  also  welcomes  the  fact  that  domestic  authorities  must  provide  the 
NBB, at its request, with any information useful for the discharge of its macro-economic mandate4, 

it  nevertheless  recommends  that  those  authorities  should  be  required  by  law  to  communicate  the 

information concerned at their own initiative. 

2.4  The  ECB  understands  that,  once  collected  in  accordance  with  the  mechanisms  described  under 

paragraph  2.3  above,  information  may  be  shared  with  the  ECB,  the  ESRB,  the  ESAs  or  other 

domestic  supervisory  authorities  in  accordance  with  cooperation  agreements  to  be  entered  into 

between  the  NBB  and  the  organisations  in  question.  However,  such  agreements  should  not  be 

necessary  for  the  exchange  of  information  falling  within  the  ambit  of  Articles  56  and  58  of 
Directive 2013/36/EU of the European Parliament and of the Council5, and Article 6(2) of Council 
Regulation  (EU)  No  1024/20136,  between  the  NBB  and  authorities  competent  in  the  areas  of 

prudential  supervision,  macro-prudential  supervision,  banking  resolution  and  recovery,  the  ECB, 

the central banks of the European System of Central Banks (ESCB), the ESRB and the ESAs. The 

ECB recommends that cooperation arrangements as referred to above should be without prejudice 
to  Article  36/14,  1°  and  2°7  of  the  Organic  Law  of  the  NBB,  pursuant  to  which  the  NBB  may 

provide information to the ECB and ESCB central banks in certain cases. This includes cases when 

the  information  concerned  is  relevant  for  discharging  the  mandate  of  the  ECB  and  of  the  ESCB 

central banks with regard to monetary policy, emergency liquidity assistance, oversight of payment 

and securities settlement systems, and safeguarding the stability of the financial system, especially 

in  cases  of  emergency,  and  where  the  information  is  relevant  to  the  institutions  entrusted  with  a 

macro-prudential mandate. In the interests of clarity, it is also advisable to include a cross-reference 

to Article 36/34 § 4, as amended by Article 36/14 of the draft law, in order to have a comprehensive 

and  consistent  list  of  all  cases  in  which  the  NBB  may  share  confidential  information  with  other 

authorities. 

3.  

Specific comments 

3.1  The  draft  law  sets  out  comprehensive  mechanisms  further  substantiating  the  already  existing 

macro-prudential  responsibilities  of  the  NBB.  In  the  period  since  the  financial  crisis  began,  the 

Belgian  legislator  in  2011  entrusted  the  NBB  with  specific  tools  described  in  Article  36/3  of  the 

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Article 36/33 § 3 of the Organic Law of the NBB, as amended by Article 9 of the draft law. 
Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit 
institutions and the prudential supervision of credit institutions and investment firms (OJ L 176, 27.6.2013, p. 338). 
Council  Regulation  (EU)  No  1024/2013  of  15  October  2013  conferring  specific  tasks  on  the  European  Central  Bank 
concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 20.10.2013, p. 63). 
The ECB notes that these two paragraphs will be amended by the Law on various amendments accompanying the draft 
Law on status and supervision of credit institutions, which was submitted to the ECB for its opinion on 3 January 2014. 

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Organic  Law  of  the  NBB  in  order  to:  (a)  detect  potential  threats  to  the  stability  of  the  financial 

system, especially through monitoring and assessing strategic evolutions and profiling systemically 

important financial institutions; (b) issue opinions to the federal government and parliament on the 

measures  necessary  or  useful  for  the  stability,  good  functioning  and  efficiency  of  the  financial 

system of the country; (c) coordinate the management of the financial crisis; and (d) contribute to 

the objectives of international and European institutions involved in the matters described under (a), 

(b) and (c) above, including in particular the ESRB. Financial institutions designated by the NBB as 

systemically  important,  and  notified  of  this  designation,  must  provide  their  proposed  strategic 

decisions  to  the  NBB,  which  may  oppose  such  decisions.  The  NBB  may  also  impose  specific 

measures 

regarding  solvency, 

liquidity, 

risk  concentration  and 

risk  positions  on 

the 

abovementioned systemically important financial institutions. Previous reforms also gave the NBB 

the  power  to  take  extraordinary  measures,  including  the  forced  transfer  to  the  State  or  any  other 

domestic or foreign public-law entity of assets, credits, categories of activity, securities or pools of 

securities  held  by  such  central  securities  depositories  vis-à-vis  central  securities  depositories  and 

assimilated  institutions.  This  aimed  at  avoiding  a  situation  whereby  financial  stability  might  be 

disrupted domestically or globally by a breach of the law by those entities or by mismanagement, 

liquidity  problems,  operational  and  administrative  or  accounting  problems  arising  within  the 

entities in question. 

3.2  The ECB understands that the new macro-prudential tools introduced by the draft law are without 

prejudice to the two abovementioned regimes, which shall therefore remain unchanged. As part of 
the  comprehensive  reform  of  the  status  and  supervision  of  credit  institutions8,  Article  36/3  of  the 

Organic  Law  of  the  NBB  will,  however,  be  amended  in  order  to  exempt  credit  institutions 

designated  by  the  NBB  as  systemically  important,  and  notified  of  this  designation,  from  the 

requirement to provide the NBB with their strategic decisions. Such a requirement will be imposed 

in  the  future  on  all  credit  institutions  as  part  of  micro-prudential  supervision.  Future  legal 

developments may affect the macro-prudential supervision of financial institutions other than credit 

institutions, especially the Proposal for a regulation of the European Parliament and of the Council 

on  improving  securities  settlement  in  the  European  Union  and  on  central  securities  depositories 
(CSDs)9. The ECB recommends, for the sake of clarity of the Organic Law of  the NBB, that the 

Belgian  legislator  reflects  on  the  appropriateness  of  maintaining  three  different  sets  of  provisions 

on macro-prudential supervision. This is particularly appropriate in view of the similarities between 

Articles  36/3  and  36/34,  both  of  which  apply  to  financial  institutions  on  which  the  NBB  may 

impose requirements relating to own funds, liquidity, risk concentration and risk positions with a 

view  to  contributing  to  the  stability  of  the  financial  system.  Should  these  two  provisions 

nonetheless  remain  separate,  the  mechanism  for  designating  systemically  important  institutions 

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9  

The ECB was consulted on 3 January 2014 on the draft Law on the status and supervision of credit institutions and on the 
draft Law on various amendments. 
See the Proposal for a regulation of the European Parliament and of the Council on improving securities settlement in the 
European Union and on central securities depositories (CSDs) and amending Directive 98/26/EC, COM (2012), final. 

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should  also  be  reflected  in  Article  36/34,  in  order  to  comply  with  Recommendation  C.3  of 

Recommendation ESRB/2011/3. This mechanism is currently provided for in Article 36/3 only, and 

will apply in the near future to financial institutions other than credit institutions. 

3.3  The draft law provides that the NBB, in the application of its macro-prudential powers, is to take 

into account the recommendations of the ESRB and the views of the Commission and the ECB, in 

particular when the ECB applies stricter requirements for capital buffers or other measures aimed at 
addressing systemic risk10. In this respect, the ECB recommends that the draft law is further aligned 

with the procedures set out in relevant Union law and in particular those of Article 5 of Regulation 
(EU) No 1024/201311. 

3.4  This  opinion  is  without  prejudice  to  the  conclusions  of  the  ESRB’s  follow-up  assessment,  which 

will  be  prepared  pursuant  to  Article  17  of  Regulation  (EU)  No  1092/2010  of  the  European 
Parliament and of the Council12. 

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

Done at Frankfurt am Main, 13 February 2014. 

[signed] 

The President of the ECB 

Mario DRAGHI 

10  
11  

12  

Article 11 of the draft law, which introduces a new Article 36/34, § 3 in the Organic Law of the NBB. 
See  in  this  respect,  Recital  24  of  Regulation  (EU)  No  1024/2013,  which  specifically  provides  that  national  competent 
authorities or national designated authorities and the ECB shall act in respect of any coordination procedure provided for 
in such acts after having followed the procedures provided for in that same regulation. 
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  Systemic  Risk  Board  (OJ  L  331, 
15.12.2010, p. 1). 

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