Opinion of the European Central Bank of 23 October 2015 on the preliminary assessment of conditions related to the resolution of credit institutions and investment firms (CON/2015/38)
Date: 2015-10-23
Institutions: European Central Bank
Subjects: Hungary, credit institution, financial intervention, financial stability, liquidation, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 23 October 2015  

on the preliminary assessment of conditions related to the resolution of  

credit institutions and investment firms 

(CON/2015/38) 

Introduction and legal basis 

On 22 September 2015 the European Central Bank (ECB) received a request from the Magyar Nemzeti 

Bank (MNB) for an opinion on the MNB’s draft decree on the methodology for the preliminary assessment 

of the realisation of resolution objectives (hereinafter the ‘draft decree’). 

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/EC 1, as 

the draft decree 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 

1.1 

In 2014 the Hungarian Parliament adopted Law XXXVII of 2014 related to the resolution of credit 
institutions  and  investment  firms  (hereinafter  the  ‘Law  on  resolution’)2  in  order  to  transpose 
Directive  2014/59/EU  of  the  European  Parliament  and  of  the  Council3  into  Hungarian  law,  in 
relation to which the ECB adopted Opinion CON/2014/624. The Law on resolution, inter alia, lays 

down  the  conditions  under  which  MNB,  acting  as  a  resolution  authority,  may  initiate  a  resolution 
action 5. One condition is that resolution has to serve the public interest6. According to Article 17(5) 
of  the  Law  on  resolution7,  a  resolution  action  should  be  considered  to  be  in  the  public  interest  if: 

(a) it  is  necessary  for  the  achievement  of,  and  is  proportionate  to  one  or  more  of  the  resolution 

objectives referred to  in the Law  on resolution, and  (b) winding up of the  institution  under normal 

insolvency proceedings would not meet those resolution objectives to the same extent. 

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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). 

Published in Magyar Közlöny 2014/98. 
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). 

All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 
Article 17(1) of the Law on resolution transposing Article 32(1) of Directive 2014/59/EU. 
Article 17(1) c) of the Law on resolution transposing Article 32(1)(c) of Directive 2014/59/EU. 

This provision transposes Article 32(5) of Directive 2014/59/EU. 

 
 
 
 
                                                 
ECB-PUBLIC 

1.2  Based  on the powers delegated to MNB’s Governor  by  Article 145(2)(f) of the Law on resolution, 

the draft decree lays down specific criteria concerning each resolution objective listed in the Law on 

resolution, whereby the MNB examines the extent to which the concerned resolution objective can 

be better achieved through the winding up of an institution under normal insolvency proceedings or 

through resolution. The MNB assesses with equal weighing, both individually and collectively, the 

expected level of the realisation of the resolution objectives and the public interest in accordance 

with  the  nature  and  circumstances  of  the  given  case.  The  weight  to  be  assigned  to  the  public 

interest in this respect is not further specified in the draft decree. On this basis the MNB will decide 

whether the condition of acting in the public interest which is required to initiate a resolution, is met. 

2. 

Observations 

2.1 

In accordance with Article 1(2) of Council Decision 98/415/EC, this Opinion only addresses issues 

that go beyond the mere transposition of Directive 2014/59/EU into Hungarian law. The ECB also 

stresses  that  this  Opinion  does  not  constitute  an  assessment  of  whether  Hungary  has  effectively 

discharged its obligations to implement Directive 2014/59/EU. 

2.2  The ECB welcomes that the MNB intends to enhance transparency and legal certainty for market 

participants by laying down criteria concerning resolution objectives,  whereby  the MNB examines 

the extent to which a resolution objective can be achieved through the winding up of an institution 

under normal insolvency proceedings and/or through resolution. 

2.3  The  consulting  authority  may  wish  to  consider  however  whether  the  draft  decree  might  unduly 

constrain  the  MNB’s  discretion  as  the  resolution  authority,  beyond  what  is  contemplated  by 

Directive 2014/59/EU. 

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

Done at Frankfurt am Main, 23 October 2015. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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