Opinion of the European Central Bank of 21 February 2014 on changes in the governance of the Banca d’Italia (CON/2014/19)
Date: 2014-02-21
Institutions: European Central Bank
Subjects: Italy, capital increase, central bank, national law, share, shareholder

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 21 February 2014 

on changes in the governance of the Banca d’Italia 

(CON/2014/19) 

Introduction and legal basis 

On 6 December 2013, a request for an opinion was sent by the Banca d’Italia to the European Central 

Bank (ECB) regarding amendments to the Statute of the Banca d’Italia (hereinafter the ‘amendments’). 

The  amendments  implement  the  principles  laid  down  in  Decree-Law  No  133  of  30  November  2013 

(hereinafter the ‘Decree-Law’) and address elements of the Banca d’Italia’s capital and governance. 

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 

indent  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  amendments  relate  to  the  Banca  d’Italia.  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 amendments  

1.1  The Decree-Law provides for an increase of the Banca d’Italia’s capital and lays down principles 
for the amendments; the ECB issued Opinion CON/2013/962 on the Decree-Law. Following the 

adoption  of  the  Decree-Law,  an  extraordinary  meeting  of  the  Banca  d’Italia’s  shareholders 

approved the amendments on 23 December 2013, in accordance with the procedure for amending 
the  Statute  of  the  Banca  d’Italia3.  This  procedure  was  completed  by  the  transposition  of  the 

amendments by means of the Presidential Decree of 27 December 2013. 

1.2  The amendments include provisions on the Banca d’Italia’s capital, in accordance with the Decree-

Law. The Banca d’Italia’s share capital, set by the Banking Law of 1936 at EUR 156 000, is raised 
to  EUR  7.5  billion4  pursuant  to  the  Decree-Law  and  the  amendments.  The  range  of  eligible 

1  
2  
3  

4  

OJ L 189, 3.7.1998, p. 42.  
All ECB Opinions are published on the ECB’s website at www.ecb.europa.eu. 
In  accordance  with  Article  10(2)  of  Legislative  Decree  No  43  of  10  March  1998,  referred  to  in  Article  6(5)  of  the 
Decree-Law,  whereby  the  amendments  to  the  Statute  of  the  Banca  d’Italia,  once  approved  by  the  assembly  of 
shareholders of the Banca d’Italia are finally adopted by means of a Presidential Decree, adopted on a proposal by the 
President  of  the  Council  of  Ministers  acting  together  with  the  Ministry  of  the  Treasury,  the  Budget  and  Economic 
Planning. 
See Article 3 of the Statute of the Banca d’Italia. 

 
 
 
 
 
                                                           
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shareholders  is  not  defined  by  the  Statute  of  the  Banca  d’Italia  which,  in  this  respect,  refers  to 

applicable law, i.e. Article 4(4) of the Decree-Law. The Decree-Law has been converted into Law 
No  5  of  29  January  20145  (hereinafter  the  ‘Law’).  In  the  process  of  conversion,  the  Italian 

Parliament made changes  to the Decree-Law to the effect that only the following institutions are 

allowed to hold shares: (a) banks, insurance and reinsurance enterprises having their registered and 

head  offices  in  Italy;  (b)  banking  foundations  established  under  Article  27  of  Legislative  Decree 

No 153 of 17 January 1999; and (c) Italian welfare institutions and pension funds established under 

Article  4(1)  of  the  Legislative  Decree  No  252  of 5  December  2005. The  amendments  also  make 

reference to the cap on voting rights exceeding the threshold of the Banca d’Italia’s share capital: 

shares exceeding such threshold must accordingly be disposed of by the time limit set by the Board 
of  Directors,  with  related  dividends  attributed  to  the  statutory  reserves6.  In  accordance  with  the 

Law, the amendments also enable the Banca d’Italia to buy back its own shares from shareholders 

and  temporarily  hold  them,  in  order  to  foster  compliance  with  the  limit  imposed  on  individual 

shareholdings. 

1.3  The  amendments  also  transpose  the  provisions  introduced  by  the  Law  on  the  economic  rights 

attached  to  the  shares  of  the  Banca  d’Italia  capital  in  the  Statute  of  the  Banca  d’Italia.  Such 

economic rights consist  of:  (a)  the  value of the  shares themselves; and (b) the  annual  dividend 

distributions. The maximum amount of dividends that can be distributed to shareholders from the 

net  profit  of  the  Banca  d’Italia  is  capped  to  six  per  cent  of  its  capital.  Further  pay-outs  to 
shareholders from reserves, formerly granted by Article 40, are to be excluded7 in future. 

1.4  The  amendments  also  include  changes  to  the  Banca  d’Italia’s  governance.  In  particular,  the 
minimum percentage shareholding required to call a meeting of shareholders8, to set the agenda9 
and  to  exercise  voting  rights10  are  increased.  The  quorum  for  meetings  is  also  increased11.  In 

addition,  pursuant  to  Article  5(2)  of  the  Law,  amended  Article  16  lays  down  specific 

requirements  of  independence,  integrity  and  experience  for  the  members  of  the  Board  of 
Directors.  These  requirements  are  also  applicable  to  auditors,  councillors  and  regents12. 

Moreover, the Governing Board is entrusted with decision-making powers in tasks related to the 

European System of Central Banks (ESCB), without prejudice to the powers and duties reserved 
to the Governor as a member of the ECB’s decision-making bodies13. 

5  

6  

7  
8  
9  
10  
11  
12  
13  

See Law No 5 of 29 January 2014, published in the Gazzetta Ufficiale della Repubblica Italiana No 23, 29.01.2014. 
The ECB was not consulted on the amendments to the Decree-Law. 
See  Article 3(4) of the Statute of the Banca d’Italia. It should however be noted that, in line with Article 6(5)(c) of 
Law  No  5  of  29  January  2014,  for  an  interim  period  lasting  no  longer  than  36  months  starting  from  completion  of 
capital increase, shares exceeding the 3% threshold shall not bestow voting rights but shall attribute related dividends. 
See Article 6(5)(b) of Law No 5 of 29 January 2014. 
Article 6(3) of the Statute of the Banca d’Italia. 
Article 7(2) of the Statute of the Banca d’Italia. 
Article 9(1) of the Statute of the Banca d’Italia. 
Article 10(1) of the Statute of the Banca d’Italia. 
Article 20(2), 28(2) and 31(1) of the Statute of the Banca d’Italia. 
Articles 22 and 25 of the Statute of the Banca d’Italia. 

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2. 

The appropriate time to consult the ECB 

The  request  for  an  opinion  on  the  draft  amendments  was  sent  by  the  Banca  d’Italia  on 

6 December 2013.  The  request  stated  that  the  Board  of  Directors’  meeting  had  been  convened  for 

20 December  2013.  The  amendments  were  approved  by  the  shareholders’  extraordinary  meeting  on 

23 December  2013  and  then  transposed  by  means  of  a  Presidential  Decree  on  27  December  2013 

published  in  the  Gazzetta  Ufficiale  on  31 December  2013  and  taking  effect  from  the  same  date.  In 

accordance with Article 3(4) of Decision 98/415/EC, the process of adoption of the amended Statute of 

the  Banca  d’Italia  should  have  been  suspended  pending  submission  of  the  ECB’s  opinion.  The  ECB 

would like to draw the attention of the national authorities to the proper procedure for consultation. 

3.  General observations 

3.1   The  issues  of  financial  independence  of  the  Banca  d’Italia  and  the  necessity  for  the  Banca 

d’Italia’s reserves  to  be  gradually  replenished over  an  appropriate  period  of time  and up to the 

amount deemed necessary to safeguard the value of the Banca d’Italia’s capital and assets were 

specifically  addressed  in  Opinion  CON/2013/96.  Such  observations,  insofar  as  relevant  for  the 

present purposes, also apply to the amendments. 

3.2   The ECB understands that buy-back operations may be carried out by the Banca d’Italia in order 

to enable shareholders to comply with the limit imposed on shareholdings and that contracts to 

this effect may be entered into by the Banca d’Italia. Situations, limits, procedures and conditions 

will  be  specified  by  the  Banca  d’Italia’s  Board  of  Directors  in  agreement  with  its  Board  of 

Auditors.  The  ECB  observes  that,  in  doing  so,  the  Board  of  Directors  will  take  as  a  point  of 

reference the safeguard of the Banca d’Italia’s capital and that the purchase price may not exceed 

the nominal value of the shares. The ECB also notes that the voting rights of the shares subject to 

the  buy-back  will  be  suspended.  Such  shares  will  be  computed  for  the  purpose  of  duly 

constituting  the  shareholders’  meeting,  whereas  they  will  not  be  taken  into  account  in  the 

calculation of majorities required to approve resolutions.  

3.3  

In view of the foregoing considerations, the ECB understands that the Banca d’Italia will decide 

on such buy-back operations prudently and with due regard to its own financial considerations. 

3.4   The ECB notes that, pursuant to Article 3(6) of the Statute of the Banca d’Italia, the buying and 

selling of transactions shall be carried out in accordance with the principle of transparency and 

equal treatment of potentially interested parties. It is for the Commission to assess whether the 

amendments  that  the  Italian  legislator  made  to  the  Decree-Law,  imposing  a  nationality 

requirement with regard to shareholders, comply with European Union law. 

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4.  

Institutional and financial independence 

4.1  Financial independence, which is an aspect of the principle of central bank independence referred 

to  in  Article  130  of  the  Treaty,  concerns,  inter  alia,  the  profit  allocation  rules  of  a  national 

central bank (NCB). An NCB’s statute may prescribe how its profits are to be allocated. In the 

absence of such provisions, decisions on the allocation of profits should be taken by the NCB’s 

decision-making  bodies  on  professional  grounds, and  should  not be subject to  the discretion of 

third parties unless there is an express safeguard clause stating that this is without prejudice to 

the financial means necessary for carrying out the NCB’s ESCB-related tasks as well as national 
tasks14. 

4.2 

In  particular,  Article  7  of  the  Statute  of  the  Banca  d’Italia  provides  for  the  power  of  the 

shareholders to approve the allocation of the net profits in accordance with profit allocation rules 

laid  down  in  the  amended  Article  40.  These  rules  provide  that  the  allocation  of  net  profits  is 

determined by the Board of Directors acting on a proposal from the Governing Board following 

consultation with the Board of Auditors, and is to be presented for approval at the shareholders’ 

meeting.  Net  profits  are  distributed  to:  (a)  ordinary  reserves  up  to  20 per cent  of  net  profits; 

(b) shareholders up to 6 per cent of the capital; (c) extraordinary reserves and provisions up to a 

maximum  of  20  per  cent  of  net  profits;  and  (d)  the  State  for  the  remaining  sum.  The  ECB 

understands  that,  should  the  ordinary  reserves  be  reduced  to  offset  losses,  net  profits  will  be 
allocated  to  the  ordinary  reserves  until  the  ordinary  reserves  are  replenished15.  As  consistently 
noted  by  the  ECB16,  profits  may  be  distributed  to  the  State  budget  only  after  any  accumulated 

losses  from  previous  years  have  been  covered,  and  financial  provisions  deemed  necessary  to 

safeguard the real value of the NCB’s capital and assets have been created.  The ECB takes note 

of Article 40(3) of the Statute of the Banca d’Italia, which lays down general principles on the 

replenishment  of  ordinary  reserves,  and  expects  the  Banca  d’Italia  to  interpret  these  principles 

adequately,  in  accordance  with  the  principle  of  financial  independence.  In  addition,  the  ECB 

understands  that  a  provision  for  general  risks  shall  cover  the  risks  deriving  from  the  overall 

operations of the Banca d’Italia, and that this provision shall be  funded taking into account the 
general risk level17. 

4.3  The ECB also welcomes the amendment to Article 6 of the Statute of the Banca d’Italia, which 

requires that the shareholders’ meeting does not interfere in any way  with matters pertaining to 

the exercise of ESCB-related tasks, and understands that this provision reaffirms the Governor’s 

and  the  Governing  Board’s  exclusive  competence  on  matters  related  to  the  exercise  of  ESCB-

related tasks. 

14  
15  
16  
17  

See the ECB’s Convergence Report 2013, p. 26. 
Article 40(3) of the Statute of the Banca d’Italia. 
See the ECB’s Convergence Report 2013, p. 25. 
Article 41(2) of the Statute of the Banca d’Italia. 

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5.  

Personal independence 

5.1  As  regards  conflicts  of  interest,  the  ECB  notes  in  its  Convergence  Reports  that,  as  a  matter  of 

principle, membership of a decision-making body involved in the performance of ESCB-related 

tasks is incompatible with the exercise of other functions that might create a conflict of interest. 

In particular, members of such decision-making bodies may not hold an office or have an interest 

that may influence their activities, whether through office in the executive or legislative branches 

of  the  state  or  in  regional  or  local  administrations,  or  through  involvement  in  a  business 

organisation.  The  ECB  welcomes  the  reference  made  in  Article  43  of  the  Statute  of  the  Banca 

d’Italia  to  the  codes  of  ethics  applicable  to  staff  members  and  the  members  of  the  Governing 

Board,  which  lays  down  general  principles  on  independence  and  impartiality,  ceilings  on  the 

acceptance of gifts, conflicts of interest, confidentiality and continuance of duties after cessation 

of employment. 

5.2  Article  18  of  the  Statute  of  the  Banca  d’Italia  contains  an  explicit  provision  concerning  the 

grounds for dismissal of members of the Governing Board, other than the Governor, by reference 

to  Article  14.2  of  the  Statute  of  the  European  System  of  Central  Banks  and  of  the  European 

Central  Bank.  The  members  of  the  Governing  Board,  other  than  the  Governor,  must  have  the 

right to submit any decision to dismiss them to an independent court of law, in order to limit the 

potential  for  political  discretion  in  evaluating  the  grounds  for  their  dismissal.  The  ECB 

understands  that  this  right  is  made  available  under  Italian  law  on  the  basis  of  overriding 

principles  of  constitutional  law  and  relevant  procedural  rules.  However,  for  reasons  of  legal 

certainty,  it  would  be  advisable  to  refer  to  such  a  right  of  review  in  the  Statute  of  the  Banca 
d’Italia18. 

6.  

Independence of the Banca d’Italia for prudential supervision 

The  ECB  also  understands  that  the  amendment  to  Article  6  of  the  Statute  of  the  Banca  d’Italia,  by 

requiring that the shareholders’ meeting does not interfere in any way with the matters relating to the 

exercise of the public functions entrusted to the Banca d’Italia by Union law, would also encompass the 

future performance of the Banca d’Italia’s supervisory tasks, including future tasks related to the Single  

18 

See for example the ECB’s Convergence Report 2013 p. 24. 

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Supervisory  Mechanism  (SSM),  and  thus  be  in  accordance  with  the  principle  of  independence  of 
supervisors19,  and  the  requirement  for  national  competent  authorities  to  act  independently  within  the 
SSM, as enshrined in Article 19 of Council Regulation No. 1024/201320. 

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

Done at Frankfurt am Main, 21 February 2014. 

[signed] 

The President of the ECB 

Mario DRAGHI 

19 

20 

See  Principle  2  of  the  Core  Principles  for  Effective  Banking  Supervision.  See  also  paragraph  5.3  of  Opinion 
CON/2013/71. 
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, 29.10.2013, p. 63).  

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