Opinion of the European Central Bank of 7 July 2015 on a new legal framework for savings banks (CON/2015/23)
Date: 2015-07-07
Institutions: European Central Bank
Subjects: Portugal, banking supervision, financial services, financial stability, national law, savings bank

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 7 July 2015 

on a new legal framework for savings banks 

(CON/2015/23) 

Introduction and legal basis 

On 15 May 2015, the European Central Bank (ECB) received a request from the Portuguese Ministry of 

Finance for an opinion on a draft decree-law (hereinafter the ‘draft decree-law’) establishing a new legal 

framework for savings banks (hereinafter the ‘new legal framework’). 

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 sixth indent of Article 2(1) of Council Decision 98/415/EC1, as 

the draft decree-law relates 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 decree-law 

1.1  The draft decree-law sets out a new legal framework for savings banks (caixas económicas), and 
repeals  the  previous  framework  detailed  in  Decree-Law  136/79,  of  18  May  19792.  At  present, 

savings banks are special credit institutions which carry out limited banking business, although the 

Banco de Portugal (BdP) may authorise them to carry out other operations which may be carried 

out by banks. 

1.2  The main purpose of the draft decree-law is to adjust the rules governing savings banks to reflect 

the gradual expansion to full-service banking by certain savings banks that has taken place during 

the  last  few  decades.  The  new  legal  framework,  while  maintaining  the  community-oriented 

purposes  of  the  savings  banks,  aims  to  define  their  nature  and  the  relationship  with  their  owner 

institutions,  to  strengthen  their  governance,  and  to  define  the  terms  on  which  they  carry  out 

banking business. 

1.3  To  that  end,  the  draft  decree-law  sets  out  two  separate  regimes,  depending  on  the  volume  of 

assets of the  already-existing savings banks, of which there  are currently  four in  Portugal. Those 

which have assets greater than or equal to EUR 50 000 000 are  classified as full-service savings 

banks  (caixas  económicas  bancárias)  and  those  whose  assets  are  below  that  threshold  are 

classified as affiliated savings banks (caixas económicas anexas). Both types of savings banks will 

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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). 
Diário da República, No 114 Series 1, of 18 May 1979. 

 
 
 
 
                                                 
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continue  to  be  controlled  by  a  single  institution,  either  a  mutual  society  or  other  charitable 

institution.  The  full-service  savings  banks’  owner  institution  will  be  required  to  retain,  directly  or 

indirectly, either a majority of the voting rights or a majority shareholding in the institution. For this 

purpose, full-service savings banks will assume the form of a public limited company with a public 

ownership  structure.  Additionally,  the  full-service  savings  banks  will  be  comparable  to  regular 

commercial  banks,  and  entitled  to  carry  out  all  forms  of  business  which  may  be  carried  out  by 

banks in accordance with law, and they will be subject to the same prudential rules. 

1.4  This  distinction  between  full-service  savings  banks  and  affiliated  savings  banks  will  also  apply  to 

new savings banks that are incorporated after the draft decree-law enters into force. Although they 

are currently incorporated on the basis of an authorisation from the Ministry of Finance, which first 

consults the BdP, under the draft decree-law, authorisation from the BdP will be required for new 

savings banks. 

1.5  The  draft  decree-law  also  ensures  the  separation  and  independence  of  the  management  and 

supervisory boards of savings banks from their respective owner institution, specifically prohibiting 
ex officio appointments3. 

2. 

General observations 

2.1  The ECB welcomes the draft decree-law as it adapts the legal framework for savings banks to take 

into account developments in the financial sector, in particular the fact that certain savings banks 

are  already  authorised  to  carry  out  other  operations  carried  out  by  banks,  approaching  a 

full-service  banking  model  and  acquiring  a  profit-making  dimension.  Therefore,  the  ECB 

recognises,  in  general  terms,  the  benefit  of  defining  the  nature  of  savings  banks  and  the  terms 

under  which  they  conduct  their  business,  as  well  as  strengthening  their  respective  governance 

models and clarifying the relationship with their owner institutions. 

2.2  The  ECB  acknowledges  that  the  draft  decree-law  aims  at  preserving  the  community-oriented 

purpose of savings banks, which accounts for the distinction between affiliated savings banks and 

full-service savings banks, as well as the legal requirement for the owner institutions of the latter to 

retain a majority of voting rights or shares. The ECB welcomes the possibility that private investors 

may participate in the share capital of full-service savings banks, since this could help stabilise the 

capital base of savings banks by opening up a new source of funding. 

3. 

Specific observations 

3.1  Application of Directive 2013/36/EU and Regulation 575/2013 to savings banks 

3.1.1  According to point (19) of Article 2(5) of Directive 2013/36/EU of the European Parliament and of 
the Council4, savings banks in existence on 1 January 1986 fall outside the scope of application of 

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For the present purpose, this means the automatic appointment of members of the management bodies of the owner 
institution to the management and supervisory bodies of savings banks.  

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). 

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that  Directive  and,  therefore,  of  Regulation  575/2013  of  the  European  Parliament  and  of  the 
Council5,  taking  into  account  its  scope  of  application  as  defined  in  Article  1  thereof.  Exception  is 

made,  however,  for  those  incorporated  as  limited  companies,  of  which  there  are  currently  none, 

and to Caixa Económica Montepio Geral, as specified in Directive 2013/36/EU,  which is explicitly 

subject to the prudential requirements of Directive 2013/36/EU and Regulation 575/2013. 

3.1.2  Any  new  savings  banks,  whether  affiliated  or  full-service,  will  be  subject  to  the  same  prudential 

requirements as any other credit institution under Directive 2013/36/EU and Regulation 575/2013. 

3.1.3  In addition, the  ECB  understands  that  transforming a savings  bank  into a  public limited company 

would cause Directive 2013/36/EU and Regulation 575/2013 to be applicable, since the exemption 

in point (19) of Article 2(5) of Directive 2013/36/EU would no longer apply. 

3.2 

Incorporation of new savings banks and maintenance of assets above EUR 50 000 000 

3.2.1  As indicated above, the draft decree-law generally permits the incorporation of new savings banks 

as either affiliated savings banks or full-service savings banks depending on whether the institution 

has  assets  below  or  above  EUR 50 000 000.  Taking  into  consideration  the  fact  that,  before 

incorporation takes place, there are no assets to account for except the initial capital proposed, it is 

possible to assume that this initial capital will determine the applicable category. This would mean 

that  a  new  full-service  savings  bank  would  always  need  an  initial  capital  of  at  least 

EUR 50 000 000, which is much higher than the lower limit established for banks (also full-service) 

referred  to  in  Article  18(2)  of  the  new  legal  framework.  The  Portuguese  authorities  may  wish  to 

explicitly address this question in the draft decree-law. 

3.2.2  The draft decree-law does not indicate what happens if the assets of a full-service savings bank fall 

or remain below the EUR 50 000 000 threshold, as Article 6 of the draft decree-law only provides a 

solution for an affiliated savings bank which has assets greater than or equal to EUR 50 000 000 

over two consecutive years, in which case it shall be converted, from the third year, to a full-service 

savings  bank.  One  possible  interpretation  is  that  the  draft  decree-law  allows  full-service  savings 

banks  to  maintain  their  nature  and  their  services,  even  if  their  assets  fall  below  the  threshold  of 

EUR 50 000 000,  while  keeping  them  subject  to  a  more  restrictive  prudential  regime.  The 

Portuguese authorities may wish to explicitly address this issue as well. 

3.2.3  Furthermore, from the point of view of legislative technique, the ECB notes that, as Article 6 of the 

draft  decree-law  does  not  seem  to  be  limited  to  already-existing  savings  banks,  its  text  could  be 

included in the text of the new legal framework itself. 

3.3  Other specific observations 

3.3.1  For  purposes  of  clarity,  as  well  as  to  reinforce  its  interpretation,  the  ECB  considers  it  useful  and 

pertinent to make the following final comments regarding the draft decree-law: 

(a)  Article  4(2)  of  the  draft  decree-law  sets  out  a  transitional  rule  according  to  which  the  BdP 

may  require  full-service  savings  banks  existing  at  the  date  of  entry  into  force  of  the  draft 

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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). 

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decree-law  to  be  transformed,  within  a  reasonable  period  of  time,  into  public  limited 

companies, depending on the complexity or risk profile of their business activities. While, in 

principle,  given  the  purpose  of  the  draft  decree-law,  a  legally  binding  deadline  would  be 

justified rather than conferring responsibility for setting the relevant deadline on the BdP, the 

ECB understands that setting each deadline by means of an order issued by the BdP allows 

for  the  flexibility  to  adapt  the  transformation  process  according  to  the  specific  features  of 

each savings bank. 

(b) 

It is not entirely clear from Article 5 of the new legal framework whether investors other than 

mutual  societies  or  other  charitable  institutions  can  participate  in  the  share  capital  of  full-

service savings banks. Since this is one of the main changes to the previous legal framework 

governing these institutions, the draft decree-law would benefit from some clarification in this 

regard. 

(c) 

Article  5(3)  of  the  new  legal  framework  provides,  only  for  interpretation  and  clarification 

purposes,  that  the  holdings  of  an  owner  institution  in  a  savings  bank  are  relevant  for  the 

assessment  of  qualifying  holdings  for  the  purposes  of  the  legislation  applicable  to  credit 

institutions.  However,  since  other  investors  will  also  be  allowed  to  participate  in  the  share 

capital of full-service savings banks to a level up to 49%, the draft decree-law should clarify 

that  such  other  holdings  will  also  be  assessed  under  the  prudential  rules  on  qualifying 

holdings. 

(d)  Article 19(2) of the new legal framework provides that the members of the management and 

supervisory bodies of full-service savings banks are to be distinct and independent from the 

members of the bodies of their  respective owner institution, further specifying that they are 

not  to  be  appointed  on  an  ex  officio  basis.  In  order  to  prevent  an  improper  interpretation 

according  to  which  the  same  person  could  be  appointed  both  to  the  bodies  of  the  owner 

institution and of the savings bank as long as it is not via ex officio, it would be convenient to 

adopt  different  wording  to  make  clear  that  the  prohibition  of  an  ex  officio  appointment  is 

merely by way of example. 

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

Done at Frankfurt am Main, 7 July 2015. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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