Opinion of the European Central Bank of 23 June 2014 on measures accompanying the SSM Regulation (CON/2014/43)
Date: 2014-06-23
Institutions: European Central Bank
Subjects: Austria, EU banking union, banking supervision, financial stability, financial supervision, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 23 June 2014 

on measures accompanying the SSM Regulation 

(CON/2014/43) 

Introduction and legal basis 

On 15 April 2014, the European Central Bank (ECB) received a request from the Austrian Ministry of 
Finance for an opinion on a draft law amending several legal acts including the Law on banking1, the Law 
on financial conglomerates2 and the Law on the Financial Market Authority3 (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/EC4,  as  the  draft  law  relates  to  the  Oesterreichische  Nationalbank  (OeNB),  to  the 

prudential supervision of credit institutions and to 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  legal  provisions  on  macroprudential  tasks  and  tools,  procedural  and 
federal  state  liability  issues  relating  to  Council  Regulation  (EU)  No  1024/20135  (hereinafter  the 

‘SSM  Regulation’),  and  aims  to  smoothly  integrate  the  Austrian  national  banking  supervisory 

system  into  the  Single  Supervisory  Mechanism  (SSM).  Although  the  Austrian  Financial  Market 

Authority (FMA) is established as an integrated supervisory institution, supervising all significant 

financial  service  providers  in  Austria,  the  FMA  shares  responsibilities  with  the  OeNB  in 

connection  with  banking  supervision.  For  instance,  while  the  OeNB  is  tasked  with  fact-finding, 

1  
2  

3  

4  

5  

Bundesgesetz über das Bankwesen (Bankwesengesetz), BGBl 532/1993, as amended. 
Bundesgesetz über die zusätzliche Beaufsichtigung der Kreditinstitute, Versicherungsunternehmen und Wertpapierfirmen 
eines Finanzkonglomerats (Finanzkonglomerategesetz), BGBl I 70/2004, as amended. 
Bundesgesetz über die Errichtung und Organisation der Finanzmarktaufsichtsbehörde (Finanzmarktaufsichtsbehördenge-
setz), BGBl I 97/2001, as amended. 
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). 
Council Regulation (EU) No 1024/2013 of October 15 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). 

 
 
 
 
                                                 
ECB-PUBLIC 

including on-site and off-site analysis of banks, the FMA is tasked with decision-making and has 

therefore been designated as the competent authority in the area of banking supervision. The FMA 

is  the  national  competent  authority  (NCA)  within  the  SSM  framework  and  the  addressee  of 

instructions issued by the ECB under Article 6(3) of the SSM Regulation. 

1.2 

In connection with the macroprudential tasks and tools under Article 5 of the SSM Regulation, the 

draft law obliges the FMA to notify the Austrian Financial Market Stability Board (FMSB) prior to 

proposing, to the ECB, the application of higher requirements for capital buffers under Article 5(2) 

and  (3)  of  the  SSM  Regulation.  The  FMA  is  to  give  the  FMSB  the  opportunity  to  make  a 

recommendation  within  a  reasonable  period  of  time.  If  the  FMA  does  not  comply  with  this 

recommendation, it must provide reasons to the FMSB. A similar obligation to notify arises if the 

ECB  informs  the  FMA  of  its  intention  to  apply  higher  requirements  for  capital  buffers  in 

accordance with Article 5(2) of the SSM Regulation. Moreover, the FMA is to notify the FMSB if, 

under Article 5(4) of the SSM Regulation, the ECB raises objections to planned decisions by the 

FMA  to  apply  higher  requirements  for  capital  buffers,  including  countercyclical  buffer  rates  and 

any other measures aimed at addressing systemic or macroprudential risks. 

1.3  The draft law clarifies the division of tasks within the SSM between the FMA and the OeNB, on 

the one hand, and the ECB on the other hand. To this end, the draft law provides that the FMA and 

the OeNB are only required to execute tasks, powers and duties assigned to them under the Law on 

banking  to  the  extent  that  the  execution  of  same  is  not  reserved  for  the  ECB  under  the  SSM 
Regulation6.  Furthermore,  the  draft  law  clarifies  that  the  procedures  outlined  by  the  Law  on 

banking shall not apply to the ECB in connection with the application of national legislation by the 
ECB in the area of banking supervision, as provided for by Article 4(3) of the SSM Regulation7. In 

order to effectively carry out the tasks and powers assigned to them within the scope of the SSM, 

the  FMA  and  the  OeNB  must  also  coordinate  their  activities  within  the  SSM  and  provide  each 
other with all information, applications and requests without delay8. 

1.4.  The draft law also sets out the partial discontinuation of the obligation on both the FMA and the 

OeNB to input data into a shared national supervisory database established by the OeNB under the 
Law on banking9. Within the scope of the SSM, the ECB will also operate a database for banking 

supervision purposes. According to the explanatory memorandum to the draft law, the data to be 

entered into the ECB database will overlap with the data to be entered into the national database. 

The Austrian Ministry of Finance considers that, with the commencement of the SSM, there will no 

longer be any need to input data into the national database if it has already been entered into the 

ECB  database.  Accordingly,  the  draft  law  provides  that  the  FMA  and  the  OeNB  are  no  longer 

obliged  to  input  overlapping  data  into  the  national  database,  provided  that  the  data  stored  in  the 

6  
7  
8  
9  

See Article 1(74) of the draft law, which introduces Article 77d(1) to the Law on banking. 
See Article 1(74) of the draft law, which introduces Article 77d(2) to the Law on banking. 
See Article 1(74) of the draft law, which introduces Article 77d(3) to the Law on banking. 
See Article 1(74) of the draft law, which introduces Article 77d(4) to the Law on banking. 

2 

                                                 
ECB-PUBLIC 

ECB database is accessible by both the FMA and the OeNB at any time. 

1.5  The  SSM  Regulation  provides  for  the  ECB’s  participation  in  supplementary  supervision  of  a 
financial  conglomerate  in  relation  to  the  credit  institutions  included  therein10.  Accordingly, 

Article 4 of the draft law clarifies that the scope of the tasks and powers assigned to the FMA by 
the  Law  on  financial  conglomerates11  is  to  be  confined  within  the  scope  of  the  SSM  Regulation. 

The FMA is only required to carry out the tasks, powers and duties that are assigned to it under the 

Law on financial conglomerates to the extent that the execution of same is not reserved to the ECB 

under the SSM Regulation. 

1.6  The draft law restricts federal state liability for damage caused by the FMA when cooperating with, 

exchanging information with and supporting the ECB in relation to the SSM Regulation. This also 

applies  to  the  FMA’s  involvement  in  the  ECB’s  decision-making  process  and  in  the  ECB’s 

preparations  under  the  SSM  Regulation.  In  the  Austrian  Ministry  of  Finance’s  opinion,  as 

expressed in the explanatory memorandum to the draft law, the transfer of special tasks to the ECB 

under Article 127(6) of the Treaty and under the SSM Regulation represents an objective reason for 

the express exemption from liability for damage caused by national authorities, to the extent that 

this may arise at all, as well as the fact that the ECB has a specific liability under Article 340 of the 

Treaty. The ECB notes that, in accordance with the wording of draft Article 3(6) of the Law on the 

Financial Market Authority (as introduced by Article 5 of the draft law and as amended by a draft 
bill tabled in Parliament on 3 June 201412), a claim for compensation is to be excluded in respect of 

damage  caused  by  acts  of  the  FMA,  including  its  executive  bodies  and  employees,  when 

implementing or fulfilling an instruction of the ECB, preparing or executing decisions of the ECB, 

and when cooperating with, exchanging information with and providing other support for the ECB. 

For the OeNB, its executive bodies and employees, an identical exemption from liability has been 

included in draft Article 79(7) of the Law on banking, as introduced by Article 1(114) of the draft 

law.  The  ECB  understands  that  according  to  Article  3  of  the  Law  on  the  Financial  Market 

Authority,  the  Austrian  Federation  is  currently  liable,  pursuant  to  the  provisions  of  the  Law  on 
public  liability13,  for  damage  caused  by  bodies  within  the  FMA  and  by  FMA  employees  when 

enforcing,  inter  alia,  the  Law  on  banking  and  the  Law  on  financial  conglomerates.  Such  liability 

only exists in relation to supervised institutions and third parties, e.g. depositors may not claim any 
compensation  from  the  Austrian  Federation14.  However,  federal  state  liability  is  not  limited  to 

intent or gross negligence. The Austrian Federation is entitled to claim reimbursement from those 

persons acting as agents of the FMA in committing or causing a violation of the law with intent or 

gross negligence, provided it has indemnified the injured person under the provisions of the Law on 

10  
11  
12  
13  

14  

See Article 4(1)(h) of the SSM Regulation. 
See Article 12a of the Law on financial conglomerates. 
Regierungsvorlage 162 der Beilagen zu den Stenographischen Protokollen des Nationalrates XXV. GP. 
Bundesgesetz über die Haftung der Gebietskörperschaften und der sonstigen Körperschaften und Anstalten des öffentli-
chen Rechts für in Vollziehung der Gesetze zugefügte Schäden (Amtshaftungsgesetz), BGBl 20/1949, as amended. 
See Article 3(1) of the Law on the Financial Market Authority. 

3 

                                                 
ECB-PUBLIC 

public liability15. 

2. 

General observations 

The  ECB  takes  note  that  the  draft  law  aims  to  smoothly  integrate  the  Austrian  national  banking 

supervisory  structure  into  the  SSM  and  to  ensure  that  no  legal  obstacles  arise  under  national  law  in 

relation to the performance by the ECB, with the assistance of the NCA, of its banking supervisory tasks 
under the SSM Regulation16. The ECB understands that the rules are not intended to narrow or amend the 

scope of the SSM Regulation, which is directly applicable. 

3.   Macroprudential tasks and tools 

3.1  Article  1(31)  of  the  draft  law  which,  inter  alia,  inserts  a  new  Article  24b(3)  into  the  Law  on 

banking,  contains  two  incorrect  references.  The  reference  to  Article  5(4)  seems  erroneous; 

reference should be made to Article 5(1) of the SSM Regulation as only this provision provides the 

ECB with the right to object to an intended national macroprudential decision under Article 5(1) of 

the SSM Regulation. Furthermore, the second reference to Article 23c appears to be in error and 

should be replaced by Article ‘23d’. 

3.2 

In  addition  to  the  FMA  (in  its  role  as  NCA),  the  FMSB  is  also  involved  in  the  application  of 

macroprudential tasks and tools pursuant to Article 5 of the SSM Regulation. The ECB understands 

that the FMSB has been established within the Austrian Ministry of Finance to promote financial 
market  stability,  reduce  systemic  threat  and  lower  systemic  and  pro-cyclical  risks17.  While  the 

FMSB  is  involved  in  macroprudential  oversight  issues  under  the  SSM  Regulation  due  to  the 

FMSB’s national tasks, the ECB also highlights the tight time frame under Article 5(4) of the SSM 

Regulation. If the ECB intends to apply higher national capital buffers and duly notifies the FMA 

ten working days prior to taking such action, the FMA may provide a reasoned written objection to 

the ECB within five working days. The ECB takes note of the amendment made by the draft law to 

Article  24b(2)  of  the  Law  on  banking  according  to  which  the  FMSB  is  to  provide  its 

recommendation  to  the  FMA  ‘in  compliance  with  the  time  limit  indicated  in  Article  5(4)  of 

Regulation (EU) No 1024/2013’. The ECB understands that the time limit for the FMA’s response 

to  the  ECB’s  notification  under  Article  5(2)  of  the  SSM  Regulation  will  not  be  delayed  by  the 

FMA’s consultation with the FMSB. 

15  
16  
17  

See Article 3(3) of the Law on the Financial Market Authority. 
See Article 6 of the SSM Regulation.  
See Article 13 of the Law on the Financial Market Authority. 

4 

 
 
 
                                                 
ECB-PUBLIC 

4.  

Procedural issues 

It is essential for the smooth functioning of the SSM that there is full cooperation between the ECB and 

the NCAs and that they exchange all information that  may have an impact on their respective tasks, in 

particular  all  information  that  the  NCAs  avail  of  regarding  procedures  that  may  have  an  impact  on  the 

safety and soundness of a supervised entity or that interact with the supervisory procedures in relation to 
such entities18. Against this background, the ECB welcomes that the consulting authority aims to clarify 

the extent of the NCA’s competence under the SSM Regulation. The ECB also supports the fact that the 

draft law excludes the ECB from the application of procedural laws  when applying national legislation 
exercising  Member  State  options  under  Union  law19.  Due  to  the  dual  banking  supervisory  structure  in 

Austria, it is important to ensure that the FMA and the OeNB coordinate their activities within the SSM 

and provide each other with all information, applications and requests without delay. 

5.   Restrictions on federal state liability  

5.1  The  ECB  understands  that  it  is  in  principle  a  matter  for  Austrian  national  law  to  determine  the 

scope of the federal state liability of the FMA and the OeNB for damage caused by their acts and 

omissions,  including  the  acts  and  omissions  of  their  executive  bodies  and  employees.  The  ECB 

recognises  that  the  liability  of  NCAs  is  not  harmonised  across  the  Union  and  that  different 

supervisory liability regimes may presently exist at national level. The ECB, itself, is liable for the 

acts of its servants pursuant to Article 340 of the Treaty. Moreover, existing decisions of the Court 

of  Justice  of  the  European  Union  (CJEU)  appear  to  provide  scope  for  a  restriction  of  national 

liability  where  the  NCA  is  merely  required  to  implement  a  binding  instruction  of  a  Union 
institution  without  any  margin  of  discretion20.  On  the  other  hand,  NCAs  may  be  liable  for  their 
actions within the SSM framework where an available margin of discretion is in fact exercised21. 

Accordingly, the Union legislator has clarified in recital 61 of the SSM Regulation that the ECB’s 

liability in relation to actions undertaken within the SSM framework ‘should be without prejudice 

to the liability of national competent authorities to make good any damage caused by them or by 

their servants in the performance of their duties in accordance with national legislation’.  

5.2  The wording of draft Article 3(6) of the Law on the Financial Market Authority and draft Article 

79(7) of the Law on banking could be understood as effectively placing liability for damage caused 

by  the  acts  and  omissions  of  the  FMA  and  the  OeNB,  including  their  executive  bodies  and 

employees, occurring within the SSM framework, exclusively and categorically on the ECB in all 

18  

19  
20  
21  

See recital 11 of Regulation (EU) No 468/2014 of the European Central Bank of 16 April 2014 establishing the frame-
work for cooperation within the Single Supervisory Mechanism between the European Central Bank and national compe-
tent authorities and with national designated authorities (SSM Framework Regulation) (ECB/2014/17) (OJ L 141, 
14.5.2014, p. 1). 
See, for example, Article 4(3) of the SSM Regulation. 
See, for example, Case 175/84 Krohn v Commission [1986] ECR 753, paragraph 23. 
See Case T-146/01 DLD Trading v Council [2003] ECR II-6005, paragraphs 79 to 80. 

5 

 
                                                 
ECB-PUBLIC 

cases. This could lead to an unclear legal situation with the potential of negatively impacting on the 

efficient and effective functioning of the SSM, in particular having regard to the direct applicability 

of the SSM Regulation. Therefore, it would be advisable to amend the part of Article 5 of the draft 

law that introduces the new Article 3(6) to the Law on the Financial Market Authority, as well as 

draft Article 79(7) of the Law on banking, in order to ensure that the proposed exemptions from the 

national  liability  framework  are  in  compliance  with  Union  law  and  are  without  prejudice  to  the 

allocation of liability under the SSM framework.  

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

Done at Frankfurt am Main, 23 June 2014. 

[signed] 

The President of the ECB 

Mario DRAGHI	

6