Opinion of the European Central Bank of 23 October 2014 on the determination of weighted average yields for federal loans and the appointment of external auditors (CON/2014/75)
Date: 2014-10-23
Institutions: European Central Bank
Subjects: Austria, auditing, central bank, national law, public accounting, public borrowing

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 23 October 2014 

on the determination of weighted average yields for federal loans and the appointment of external 

auditors 

 (CON/2014/75) 

Introduction and legal basis 

On 22 September 2014, the European Central Bank (ECB) received a request from the Austrian Ministry 

of  Finance  for  an  opinion  on  the  draft  law  on  the  determination  of  weighted  average  yields  for  federal 

loans and amending the Law on the Oesterreichische Nationalbank (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 
indent  of  Article  2(1)  of  Council 
Decision 98/415/EC1,  as  the  draft  law  relates  to  the  Oesterreichische  Nationalbank  (OeNB).  In 

the  European  Union  and  on 

third 

the 

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 replaces Austria’s current indicator for federal loans, the secondary market yields for 

government  bonds  (hereinafter  ‘SMR’),  with  a  new  indicator,  the  circulation  weighted  average 

yields of  government bonds (hereinafter ‘UDRB’).  This  is  necessary because  by the end  of  2014 

the Oesterreichische Kontrollbank AG will cease to provide the SMR indicator and starting from 

1 January 2015 the OeNB will take over the task and provide the new UDRB indicator. The SMR 

indicator is particularly relevant for life insurance undertakings. 

Pursuant to the draft law, the UDRB calculation is based on Austrian federal loans issued  with a 

fixed interest rate and a remaining term of more than one year. This is based on the transaction data 

obtained  by  the  Austrian  Financial  Market  Authority  by  virtue  of  its  official  duties,  which  is 

provided to the OeNB on a weekly basis. This transaction data must not be published by the OeNB. 

The  OeNB  will  calculate  the  UDRB  for  each  of  the  bank’s  working  days  and  publish  it 

retrospectively,  once  a  week,  on  its  website.  In  addition,  the  OeNB  must  also  publish  the  details 

1  

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). 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
ECB-PUBLIC 

concerning the framework conditions of the UDRB, particularly the method of calculation and the 

description of the data on which the UDRB is based. 

1.2  The  draft  law  updates  the  OeNB’s  appointment  procedure  for  external  auditors.  Under  the  draft 

law,  an  auditor  and  alternate  auditor  is  elected  to  audit  OeNB’s  annual  financial  statements  for  a 

period of no longer than five years. Auditors that have already signed a certificate on five occasions 

cannot be appointed. In cases in which the audit is not carried out by a natural person in the capacity of 

auditor,  this  restriction  also  applies  to  a  lead auditor  and  any  persons  who  have  signed  an  auditor’s 

certificate. The rotation provisions do not apply after an interruption of audit activities for at least two 

consecutive financial years. 

2. 

Specific observations 

2.1  The ECB has no comments as regards the replacement of the indicator for federal loans with a new 

indicator. 

2.2  The ECB welcomes the changes regarding the appointment procedure of OeNB’s external auditors. 

This change reflects the ECB’s good practices for the selection and mandate of external auditors as 

laid  down  in  Article  27.1  of  the  Statute  of  the  European  System  of  Central  Banks  and  of  the 

European Central Bank. As recommended by the ECB’s good practices, the draft law introduces a 

multi-year  mandate  for  the  appointment  of  the  external  auditors.  The  ECB  understands  that  the 

draft law will enter into force before the end of 2014. Thus, the ECB expects that from the financial 

year  2015,  the  external  auditor  and  the  alternate  external  auditor  are  appointed  for  a  multi-year 
mandate. Taking into account Recommendation ECB/2013/82, the ECB understands that in  2015 

the OeNB will appoint the external auditor and alternate external auditor for a three-year term until 

the end of financial year 2017. The ECB also understands that from the financial year 2017 the  

2  

Recommendation ECB/2013/8 of 17 April 2013 to the Council of the European Union on the external auditors of the 
Oesterreichische Nationalbank (OJ C 115, 23.4.2013, p. 1). 

2 

 
                                                 
ECB-PUBLIC 

OeNB  will  appoint  an  external  auditor  and  an  alternate  external  auditor  for  a  period  of  three  or 

more years. 

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

Done at Frankfurt am Main, 23 October 2014. 

[signed] 

The President of the ECB 

Mario DRAGHI	

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