Opinion of the European Central Bank of 21 January 2015 on the role of Národná banka Slovenska in the resolution in the financial market (CON/2015/3)
Date: 2015-01-21
Institutions: European Central Bank
Subjects: Slovakia, banking supervision, central bank, competence of the institution, economic stabilisation, financial intervention, financial supervision, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 21 January 2015 

on the role of Národná banka Slovenska in the resolution in the financial market 

(CON/2015/3) 

Introduction and legal basis 

On 29 October 2014, the European Central Bank (ECB) received a request from the Slovak Ministry of 

Finance for an opinion on a draft law on resolution in the financial market and on amendments to certain 

other laws (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 a national central bank (NCB) and the rules applicable to financial 

institutions which 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 

The draft law is intended to transpose Directive 2014/59/EU of the European Parliament and the Council2 

(hereinafter  the  ‘BRRD’)  into  Slovak  law.  In  this  context,  new  responsibilities  are  to  be  assigned  to 

Národná banka Slovenska (NBS). 

The draft law establishes a resolution authority called the Resolution Council (hereinafter the ‘Council’). In 

the matters which fall into its competence, the Council will be empowered to carry out supervision under 
Law  No  747/2004  on  supervision  in  the  financial  market  and  will  be  responsible  for  its  conduct3.  The 

Council will have legal capacity and will be composed of nine members. Four members will be appointed 

by the Governor of NBS, who will include a member of the NBS Board, the head of the new unit and two 

other  NBS  staff  members  holding  managerial  positions.  The  Minister  for  Finance  will  appoint  four  other 

members  from  among  staff  members  of  the  Ministry  of  Finance  (hereinafter  the  ‘Ministry’)  holding 

managerial  positions, one  of  whom  will  be the  State Secretary  of the  Ministry. The Director of the  Debt 

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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). 
Directive 2014/59/EU of the European Parliament and of the Council of 15 May 2014 establishing a framework for 
the recovery and resolution of credit institutions and investment firms and amending Council Directive 82/891/EEC, 
and  Directives  2001/24/EC,  2002/47/EC,  2004/25/EC,  2005/56/EC,  2007/36/EC,  2011/35/EU,  2012/30/EU  and 
2013/36/EU,  and  Regulations  (EU)  No  1093/2010  and  (EU)  No  648/2012,  of  the  European  Parliament  and  of  the 
Council (OJ L 173, 12.6.2014, p. 190). 
Article I Section 5(7) of the draft law. 

 
 
 
 
                                                      
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and  Liquidity  Management  Agency  will  be  the  ninth  member.  A  person  directly  deciding  on  the 
supervisory procedure may not be a member of the Council4. 

A new organisational unit will be established within NBS (hereinafter the ‘new unit’) to provide expertise 

to, and organise the functioning of, the Council. The new unit will ensure that the tasks of the Council are 

carried out independently from other tasks of NBS. NBS staff from the new unit may not take part in the 

supervision of entities subject to the draft law unless the Council is competent in the matter. 

All costs associated with the functioning of the Council will be borne by NBS5. Members of the Council will 
not  be  entitled  to  remuneration  or  reimbursement  of  expenses  related  to  their  function6.  The  ECB 

presumes that the expenses of the members appointed by the Governor will be borne by NBS. 

The  entities  subject  to  the  draft  law  will  be  obliged  to  pay  annual  ex  ante  contributions  to  the  national 

resolution  fund  (hereinafter  the  ‘resolution  fund’)  administered  by  the  Deposit  Protection  Fund  (DPF). 

Monies belonging to the resolution fund will be held in an account with NBS, separate from other funds 

and assets of the DPF. 

2. 

Role of NBS 

2.1  Under  the  principle  of  financial  independence,  an  NCB  must  have  sufficient  means  not  only  to 

perform  its  tasks  related  to  the  European  System  of  Central  Banks  (ESCB),  but  also  its  national 
tasks,  e.g.  financing  its  administration  and  own  operations7.  Financial  independence  also  implies 
that  an  NCB  should  always  be  sufficiently  capitalised8.  Previous  ECB  opinions  have  pointed  out 

that the allocation to the NCBs of specific non-ESCB related tasks needs to be accompanied by the 

allocation  of  adequate  human  and  financial  resources  allowing  such  tasks  to  be  carried  out  in  a 
manner which will not affect the NCBs’ operational capacity to carry out their ESCB-related tasks9. 

Additionally, in including NCB representatives in collegiate decision-making supervisory bodies or 

other  authorities,  due  consideration  would  need  to  be  given  to  safeguards  for  the  personal 

independence  of  the  members  of  the  NCB’s  decision-making  bodies.  These  comments  are  valid 

also in relation to the role of NBS under the draft law. 

2.2 

In addition, given that the separate organisational unit supporting the performance of the tasks of 

the Council is part of NBS, it is important to ensure that decisions adopted by the Council will not 

jeopardise the finances of the NBS as a whole. In this respect, the ECB notes that the Council will 

have legal personality and understands that the responsibility for carrying out its tasks will be borne 
by the Council10. It is advisable that this is clarified and stated explicitly in the draft law.11 

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Section 5(2) of Law No 747/2004. 
Explanatory memorandum to the draft law, Specific part, explanations to the Part two of Article I Sections 3 to 5. 

Article I Section 4(4). 
See the ECB’s Convergence Report, June 2014, p. 25. 

See the ECB’s Convergence Report, June 2014, p. 25. 
See  for  example  paragraph  3  of  Opinion  CON/2007/8,  paragraph  3.3  of  Opinion  CON/2011/7  and  paragraph  9  of 
Opinion CON/2011/84. 

Article I Section 5(4) of the draft law, in connection with Section 43(1) of Law No 747/2004. 
The ECB understands that this observation was reflected in Section 99(2) of the adopted version of the draft law.   

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2.3  Furthermore,  the  ECB  underlines  the  importance  of  safeguarding  compliance  with  the  prohibition 

on  monetary  financing  laid  down  in  Article  123(1)  of  the  Treaty.  The  new  task  entrusted  to  NBS 

under the draft law is neither an ESCB-related task, nor a traditional central banking task. Rather, 

the new task is linked to a task for government, i.e. resolution in the financial market. Therefore, if 

NBS  is  to  be  entrusted  with  such  a  task,  it  needs  to  be  adequately  remunerated  in  advance,  to 
ensure compliance with the monetary financing prohibition12. 

3.  

Funding of the resolution fund 

Pursuant to Article I Section 93(8) of the draft law, the Council may ask, inter alia, NBS to provide credit 

to the resolution fund. However, as resolution in the financial market is neither an ESCB-related task, nor 

a traditional central banking task, NBS would be assuming a Government task by financing the resolution 

fund. The BRRD provides that resolution costs should in principle be borne by shareholders and creditors 

and, where these funds are not sufficient, by financing arrangements. In line with the monetary financing 
prohibition,  NCBs  may  not  fund  these  financing  arrangements13  and  replenish  the  resolution  fund  by 

providing  credit  to  it.  Therefore,  this  provision  of  the  draft  law  interferes  with  the  monetary  financing 
prohibition14 and should be deleted.  

4. 

Relationship between the contributions to the resolution fund and the proceeds of the bank 

levy 

4.1   The  ECB  has  in  the  past  opined  on  draft  legislation  introducing  a  bank  levy  in  Slovakia,  the 

proceeds  of  which  are  held  in  a  separate  extra-budgetary  account  and  intended  to  cover  costs 

related to the resolution of financial crises in the banking sector and to the protection of the stability 
of the banking sector in Slovakia15. The ECB understands that the obligation of the banks, as well 

as  branches  of  foreign  banks,  to  pay  contributions  to  the  resolution  fund  (hereinafter  the 

‘contributions’)  will  not  affect  their  duty  to  continue  paying  the  bank  levy.  The  ECB  supports  the 

idea  that  the  cost  of  resolution  should  be  borne  by  the  banking  sector  rather  than  the  taxpayer. 

However, it is not clear what the relationship will be between the proceeds of the bank levy and the 

resolution fund for bank resolution purposes. The ECB recommends making clear in which part of 

the  resolution financing process the income from the bank levy is to be  employed and how it  will 

interact with the resolution fund in order to avoid duplication of instruments. 

5.   Operational separation of NBS’s resolution function from its supervisory and other tasks 

5.1  Article 3(3) second subparagraph of Directive 2014/59/EU requires the staff involved in carrying out 

the functions of the resolution authority pursuant to this Directive to be structurally separated, and 

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See  the  ECB’s  June  2014  Convergence  Report,  p.  29,  as  well  as  paragraph  2.1  of  Opinion  CON/2011/30  and 
paragraph 3 of Opinion CON/2013/29. 

See paragraph 3.4 of Opinion CON/2012/99. 
See  the  ECB’s  June  2014  Convergence  Report,  p.  28.  See  also  paragraph  4  of  Opinion  CON/2011/103, 
paragraph 4.3  of  Opinion  CON/2011/93,  paragraph  3.6  of  Opinion  CON/2011/39  and  paragraph  3.2  of  Opinion 
CON/2008/59. 
Opinions CON/2011/66 and CON/2012/53. 

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subject  to  separate  reporting  lines,  from  the  staff  involved  in  carrying  out  the  tasks  pursuant  to 
Regulation  (EU)  No 575/2013  of  the  European  Parliament  and  of  the  Council16  and  Directive 
2013/36/EU of the European Parliament and of the Council17 or with regard to the other functions of 

the relevant authority. 

5.2  The draft law aims at ensuring independence of the Council members from the institutions which 
they represent18. It also contains several provisions to ensure operational independence of the new 
unit19. Since the unit supporting the Council will be part of the structure of a different entity, namely 

NBS, the draft law should expressly state the reporting line of the new unit and should at the same 

time  respect  NBS’  autonomy  in  staff  matters,  which  is  an  aspect  of  the  principle  of  financial 

independence  of  an  NCB.  In  addition  to  the  limited  provisions  on  the  competence  of  the  Council 
vis-à-vis the  staff of the new  unit20 contained in  the  draft  law, it  is advisable  to  distinguish clearly 

between the competences of the Council and NBS Board in respect of the staff of the new unit. 

5.3  Finally,  the  ECB  reiterates  that  the  separation  of  the  tasks  of  the  new  unit  from  the  supervisory 

function of NBS should not prevent the staff of the new unit from having access to any necessary 
information which is available to the supervisory function21. 

6.   Membership of an NBS Board member in the Council 

Pursuant  to  the  draft  law,  one  of  the  NBS  representatives  in  the  Council  will  be  a  member  of  the  NBS 
Board22. At the same time, the draft law provides that the member of the Council who is the NBS Board 
member in charge of supervision in the financial market will not have voting rights23.  

The consulting authority should make it clear whether the NBS Board member appointed as a member of 

the Council is the one charged with supervision in the financial market, since this would have an impact 

on the voting rights of the member in question. 

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

Done at Frankfurt am Main, 21 January 2015. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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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). 

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,  amending  Directive 
2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338). 

Article I Section 4(1),(2) and (5), Section 5(3) and (4), Section 6(3). 
Article I Section 3(2). 

The staff of the new unit will carry out supervision on behalf of the Council (Article I Section 5(4)). The Council will be 
competent to remove the obligation from the staff of the new unit to maintain confidentiality (Article I Section 8(2)). 
See paragraph 3.3 of the Opinion CON/2014/62. 

Article I Section 4(1). 
Article I Section 6(3). 

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