Opinion of the European Central Bank of 22 December 2014 on disclosure of information if a bank is subject to resolution or licence revocation (CON/2014/90)
Date: 2014-12-22
Institutions: European Central Bank
Subjects: Bulgaria, bank, banking supervision, company in difficulties, disclosure of information, financial stability, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

Of 22 December 2014  

on disclosure of information if a bank is subject to resolution or licence revocation 

(CON/2014/90) 

Introduction and legal basis 

On 20 November 2014, the European Central Bank (ECB) received a request from Българска народна 

банка  (Bulgarian  National  Bank)  (BNB)  for  an  opinion  on  a  draft  law  amending  and  supplementing  the 

Law on credit institutions (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/EC1, as the draft law relates to BNB 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 is aimed at increasing transparency and public awareness in the event that a bank is 

subject to resolution measures or has had its banking licence revoked. 

1.2  Under the draft law, BNB may instruct the conservators of a bank placed under special supervision 

to enter into an agreement with a company that has experience in tracking monetary transfers and 
receivables,  as  well  as  transactions  with  financial  instruments2.  In  addition,  the  assignee  in 
bankruptcy is required to enter into such an agreement3. 

1.3  The  draft  law  introduces  a  special  regime  requiring  public  disclosure  of  the  identity  of  certain 

individuals  holding  deposits  and  loans  in  banks  subject  to  resolution  measures  and  those  having 

their licence revoked. This requirement applies to individuals under an obligation to disclose their 

property,  income  and  expenses  in  the  country  and  abroad  in  accordance  with  the  Law  on  the 
disclosure of property belonging to individuals occupying high-ranking state and other offices4.  

1  

2  
3  
4  

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). 

See paragraph 2 of the draft law amending Article 103(3) of the Law on credit institutions. 

See paragraph 6 of the draft law amending Article 33(5) of the Law on bank insolvency. 

See Article 2. 

 
 
 
 
                                                 
 
 
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1.4  Under the draft law, prior to any deposits being paid out to a company registered in a jurisdiction 
with  a preferential tax regime5, the company must disclose the identity of its  beneficial  owners to 

the  bank  in  question.  In  addition,  if  a  company  registered  in  a  jurisdiction  with  a  preferential  tax 

regime has a loan that has not been serviced or is overdue, and this loan is from a bank subject to 

resolution measures or a bank having its licence revoked, the company is required to disclose the 

identity  of its  beneficial owners to  the bank in  question. The bank must publish the names of the 

beneficial owners of the companies in two central daily newspapers. 

1.5  Furthermore, the individuals that manage and represent a bank subject to resolution measures or a 

bank  having  its  license  revoked  must  publish  the  names  of  all  natural  and  legal  persons  whose 
bank loans have not been serviced or are overdue in two central daily newspapers6. 

2. 

General observations  

2.1  The ECB welcomes the introduction of measures that assist in the retrieval of assets and enhance 

collection efforts in bank resolution. 

2.2  On  the  proposed  public  disclosure  of  confidential  information  to  promote  transparency  in  bank 

resolution,  the  ECB  notes  that  public  disclosure  by  banks  of  confidential  information  is  subject  to 

specific  disclosure  obligations,  exceptions  and  prohibitions  established  in  Union  law  as  well  as 
national law7. In this vein, the envisaged publication of the names of bank customers, i.e. all natural 

and  legal  persons  whose  loans  have  not  been  serviced  or  are  overdue  from  banks  in  resolution 
(or where  the  bank’s  licence  has  been  revoked)8  needs  to  be  balanced  with  privacy  issues  and 

adhere  to  due  process.  Safeguards  regarding  the  publication  of  customer  information  should  be 

introduced, including, for example, an assessment of whether the disclosure is proportionate and of 
systemic importance9. 

3. 

Specific observations 

3.1  Tracking monetary transfers and receivables as well as transactions with financial instruments 

3.1.1  Providing for a competence of BNB10 to enter into a service contract with specialised third parties 

having  experience  in  tracking  money  transfers  adds  a  specific  power  to  the  existing  toolkit  under 

the Law on credit institutions. The ECB understands that BNB is already authorised under the Law 

on  credit  institutions  to  issue  binding  instructions  to  the  conservators  in  relation  to  their  activity, 

5  

6  
7  

8  
9  
10  

The jurisdictions with a preferential tax regime are specified in paragraph 1, point 64 of the Additional Provisions of the Law 
on Corporate Income Tax. 

See paragraph 3 of the draft law introducing Article 121(c)(3) final line of the Law on credit institutions. 

See,  for  example,  recital  68  and  Article  442  of  the  Regulation  (EU)  No  575/2013  of  the  European  Parliament  and  of  the 
Council  of  26  June  2013  on  prudential  requirements  for  credit  institutions  and  investment  firms  and  amending 
Regulation (EU) No 648/2012 (OJ L 176, 27.6.2013, p. 1). 

See paragraph 3 of the draft law introducing Article 121(c) (3) final line of the Law on credit institutions. 

See Opinion CON/2014/39, paragraph 3.3. 

See paragraph 2 of the draft law amending Article 103 of the Law on credit institutions. 

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including  the  delegation  of  some  of  the  conservator’s  powers  to  third  parties 11.  Whether  BNB 

decides to exercise this right or not depends on its discretion. 

3.1.2  On the proposed mandatory requirement for the assignee in bankruptcy to enter into an agreement 

with  a  company  that  has  experience  in  tracking  money  transfers  and  receivables  as  well  as 

transactions  with  financial  instruments,  the  ECB  recommends  that  the  assignee  be  granted 

discretion to decide in each individual case whether such an agreement is necessary.  

3.2  Public disclosure and information requirements concerning beneficial owners of companies  

3.2.1  The ECB welcomes the requirement to ascertain the identity of the beneficial owners of companies 

registered in a jurisdiction with a preferential tax regime before any payouts of deposits are made. 

In  this  regard,  the  ECB  notes  that  the  information  on  the  identity  of  the  beneficial  owners  of 

companies  should  be  readily  available  as  part  of  banks’  compliance  with  customer  due  diligence 
requirements 12. The importance of enhancing transparency on beneficial ownership and adequate 

customer  due  diligence  has  been  further  emphasised  in  recent  legislative  proposals  at  Union 
level 13. 

3.2.2  The publication of the names of the beneficial owners of companies registered in a jurisdiction with 

a  preferential  tax  regime  with  loans  that  have  not  been  serviced  or  are  overdue  at  banks  in 

resolution  (or  where  the  bank’s  licence  has  been  revoked)  should  be  subject  to  appropriate 

safeguards as set out in paragraph 2.2 above. With respect to loans that have not been serviced or 

are overdue, the key concern should be to enhance collection efforts. 

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

Done at Frankfurt am Main, 22 December 2014. 

[signed] 

The President of the ECB 

Mario DRAGHI 

11  
12  

13  

See Article 107(3) and (4) of the Law on credit institutions. 

Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of the 
financial system for the purpose of money laundering and terrorist financing (OJ L 309, 25.11.2005, p. 15). 

See, for example, Articles 11(1)(b) and 12(4) of the proposal for a Directive of the European Parliament and of the Council 
on  the  prevention  of  the  use  of  the  financial  system  for  the  purpose  of  money  laundering  and  terrorist  financing 
(COM(2013) 45 final). 

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