Opinion of the European Central Bank of 6 November 2015 on resolving crisis situations in the financial market and on a special levy for selected financial institutions (CON/2015/43)
Date: 2015-11-06
Institutions: European Central Bank
Subjects: Slovakia, bank charges, banking, economic stabilisation, financial institution, financial intervention, financial stability, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 6 November 2015 

on resolving crisis situations in the financial market and on a special levy for selected  

financial institutions 

(CON/2015/43) 

Introduction and legal basis 

On 28 September 2015, the European Central Bank (ECB) received a request from the Slovak Ministry of 

Finance for an opinion on a draft law that amends Law No 371/2014 on resolution in the financial market 

and on amendments to certain 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 to 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  introduce  several  technical  and  substantive  changes  to  a  number  of  laws, 

including Law No 371/2014 on resolving crisis situations in financial markets, Law No 483/2001 on banks, 

Law No 276/2009 on measures to mitigate the effects of the global financial crisis on the banking sector 
and Law No 384/2011 on a special levy on selected financial institutions2.  

Amendments to Law No 371/2014 

Most  of  the  amendments  made  by  the  draft  law  consist  of  legislative  and  technical  changes  to  the 
provisions implementing Directive 2014/59/EU of the European Parliament and of the Council3. The draft 

law  introduces  substantial  changes  to  the  way  that  the  government  financial  stabilisation  tool  is 

implemented  in  cases  of  systemic  crisis.  The  draft  law  reinforces  the  government’s  and  the  Ministry  of 

Finance’s  role  in  the  use  of  the  government  stabilisation  tool,  due  to  the  budgetary  implications 

1  

2  

3  

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). 
These  other  laws  include  Law  No  233/1995  on  judicial  executors  and  execution  activities,  Law  No  566/2001  on 
Securities and Investment Services, Law No 186/2009 on financial intermediation and financial counselling and Law 
No 39/2015 on insurance. 
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). 

 
 
 
 
                                                      
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associated with that use. The government financial stabilisation tool may only be used in the context of 

resolution  proceedings  and  provided  that  the  conditions  of  Law  No  371/2014  for  the  government 

stabilisation  tool,  which  in  turn  implements  the  conditions  set  out  in  Directive  2014/59/EU,  are  fulfilled. 

The draft law is not clear on whether the conditions for providing the government stabilisation tool must 

always include a requirement that resolution measures are insufficient to protect the public interest and 

emergency liquidity assistance has already been provided. 

Law No 371/2014 established a resolution authority called the Resolution Council. A new organisational 

unit  was  established  within  Národná  banka  Slovenska  (NBS)  to  provide  expertise  to  and  support  the 

Resolution  Council.  This  new  unit  must  ensure  that  the  Resolution  Council’s  tasks  are  carried  out 

independently  from  the  other  tasks  of  NBS.  NBS  staff  members  that  perform  these  tasks  may  not  be 

involved  in  any  supervision  over  institutions  in  matters  that  do  not  fall  under  the  Resolution  Council’s 

jurisdiction. The draft law introduces amendments to further clarify that NBS employees performing these 

tasks must be authorised to carry out supervision under Law No 371/2014 or to perform tasks in matters 

entrusted to the Resolution Council where they have been designated to do this under Law No 371/2014 

by the Resolution Council or by a competent Resolution Council member. The draft law also clarifies that 

the NBS board member who is responsible for supervision in the financial markets does not have a voting 

right on the Resolution Board. 

The  draft  law  provides  that  any  reasonable  expenses  incurred  by  the  Resolution  Council  in  connection 

with  the  use  of  resolution  tools  or  powers,  which  may  be  recovered  from  institutions  undergoing 

resolution, are to be reimbursed from state financial assets  that  are  held in an extra-budgetary account 

containing  the  proceeds  of  the  bank  levy  collected  pursuant  to  Law  No  384/2011.  These  reasonable 

expenses include those incurred in connection with the institution’s special management, the valuation of 

its assets, rights and liabilities or the application of government financial stabilisation tools.  

The  draft  law  amends  the  provisions  on  the  national  resolution  fund.  Client  assets  are  no  longer 

subtracted  in  order  to  calculate  the  yearly  contribution  to  the  national  resolution  fund.  The  Deposit 

Protection Fund, which administers the national resolution fund, may delegate parts of this administration 

to  third  parties.  The  draft  law  no  longer  includes  the  possibility  of  NBS  granting  credit  to  the  national 

resolution fund. 

Amendments to Law No 483/2001 

The  draft 
implementation  of 
Directive 2013/36/EU4 including provisions that further clarify already existing provisions on fit and proper 

introduces  several  changes 

implementing  or  related 

law 

the 

to 

assessments, remuneration and recovery plans.  

Various  technical  changes  have  been  introduced  to  Law  No  483/2001,  on  provisions  implementing 

Directive  2014/59/EU  with  respect  to  intra-group  financial  support  and  the  appointment  of  a  temporary 

administrator.  The  sanctioning  powers  of  NBS  have  been  amended  to  reflect  Article  111  of 

Directive 2014/59/EU.  

4  

Directive 2013/36/EU of  the  European  Parliament and of the Council of 26  June 2013 on access  to the activity  of 
credit 
firms,  amending 
Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC. 

the  prudential  supervision  of  credit 

institutions  and 

institutions  and 

investment 

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The draft law also extends the deadlines by one month for NBS to give prior approval to individuals being 

appointed or  reappointed as members of a credit institution’s statutory body or supervisory body, as an 

authorised  agent  (prokurista),  managerial  staff,  or  head  of  internal  control  and  audit.  With  regard  to 

significant  institutions,  the  ECB  has  the  supervisory  role  in  the  pre-approval  procedure  for  these 

individuals. 

Amendments to Law No 276/2009 

The  amendments  to  the  Law  No  276/2009  have  two  fundamental  goals:  (a)  to  align  Law  No  276/2009 

with  the  provisions  of  Law  No  371/2014,  in  particular  with  regard  to  the  provisions  on  the  government 
stabilisation  tool;  and  (b)  to  reflect  the  Commission  Banking  Communication’s5  requirements  in  the 

process of granting state aid.  

Amendments to Law No 384/2011 

The draft law substantively invalidates, from 1 July 2016, the provisions introduced by Law No 87/20156 

into  Law  No  384/2011,  which  allowed  state  financial  assets from  the  bank  levy  proceeds  to  be  used  to 

strengthen the own funds of legal persons fully owned by the state. In addition, the draft law introduces an 

obligation on these legal persons to transfer any income from the use of the received proceeds back to 

the special extra-budgetary account in which the proceeds of the state levy are held.  

2. 

Government stabilisation tool and emergency liquidity assistance 

2.1  Article 56(4)(a) to (c) of Directive 2014/59/EU requires that when applying the government financial 

stabilisation tools, Member States must ensure that their competent ministries or governments and 

the resolution authority apply these tools only if: (a) all the conditions for resolution are present; and 

(b)  one  of  three  specific  additional  conditions  are  met.  One  of  these  three  specific  additional 

conditions is that the competent ministry or government and the resolution authority determine that 

the  application  of  the  resolution  tools  would  not  suffice  to  protect  the  public  interest,  where 
extraordinary liquidity assistance from the central bank has previously been given to the institution7. 

2.2  The draft law is unclear on whether only one of these three conditions, or all three, must be met. 

This  lack  of  clarity  could  lead  to  a  possible  interpretation  that  NBS  would  have  to  provide 

emergency liquidity assistance in order to enable the use of the government stabilisation tool. 

2.3  Since  the  use  of  emergency  liquidity  assistance  cannot  be  a  pre-condition  to  the  use  of  the 

government stabilisation tool, the text of the draft law should be clarified to ensure that only one of 

these  three  conditions  must  be  met,  and  that  any  temporary  liquidity  support  that  NBS  provides 
cannot be viewed as a pre-condition to the use of the government stabilisation tool.8  

5  

6  
7  

8  

Communication from the Commission on the application, from 1 August 2013, of State aid rules to support measures 
in favour of banks in the context of the financial crisis (‘Banking Communication’ ) (OJ C 216, 30.7.2013, p. 1). 
Law No 87/2015 which amends Law No513/1991 Commercial Code and on amendments of certain laws. 
See Article 56(4)(b) of Directive 2014/59/EU. 
The  ECB  understands  that  this  matter  is  being  clarified  in  amendments  to  the  draft  law  under  discussion  in  the 
National Council of the Slovak Republic. See http://www.nrsr.sk/web/Dynamic/Download.aspx?DocID=421528.. 

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3. 

The use of bank levy proceeds 

3.1 

Limited purpose of use of proceeds of bank levies or taxes 

3.1.1  The  ECB  has  consistently  advised  that  taxes  on  financial  institutions  should  be  considered  in 

relation to the dual objective of: (a) ensuring a more equitable distribution of the costs arising from 

their potential failure between taxpayers and the financial sector; and (b) addressing the risks that 
they  pose9.  Using  the  proceeds  of  any  ad  hoc  taxes  imposed  on  banks  for  general  budgetary 

purposes  would  be  undesirable,  to  the  extent  that  such  taxes  would  place  undue  burdens  on 

banks,  hampering  the  provision  of  credit,  with  a  knock-on  effect  on  growth  in  the  real  economy. 

This  might  result  in  extra  charges  for  their  customers,  and  may  also  induce  certain  banks  to  cut 

back on their activities, leading to a reduction in the availability of credit and creating uncertainty for 
banks10. 

3.1.2  Consistently with the above, the ECB has in the past opined on draft legislation introducing a bank 

levy  in  Slovakia,  the  proceeds  of  which  are  held  in  an  extra-budgetary  account  and  intended  to 

cover  costs  related  to  the  resolution  of  financial  crises  in  the  banking  sector  and  to  protect  the 
financial  stability  of  the  Slovakian  banking  sector11.  In  particular,  the  ECB  has  reiterated  in  its 

previous opinions the necessity of introducing: (a) a clear separation between the extra-budgetary 

account  created  out  of  the  levy  proceeds  and  the  general  budgetary  resources;  and  (b)  detailed 
rules on the application of the resolution fund to finance bank resolution measures12. The ECB has 

further  opined  that  the  extra-budgetary  account  used  for  the  collection  of  the  regular  bank  levy 
should not be used for other purposes13. 

3.1.3  The  ECB  recalls  that  Law  No  384/2011  was  amended  by  Law  No  87/2015,  which  substantially 

extended the possible use of the bank levy proceeds by allowing the extra-budgetary account to be 

used to strengthen the own funds of legal persons that are fully owned by the state. Under these 

amended provisions, the Slovakian government was given the power to designate a legal person 

as  a  beneficiary  of  the  bank  levy  proceeds,  the  amount  by  which  such  a  legal  person  should  be 

recapitalised, as well as the aim and manner in which that legal person could use the recapitalised 
own funds. The Slovakian government established these specifications in Decision No 165/201514. 

Notwithstanding the ECB’s previous opinions on the subject matter, the ECB was not consulted on 

either of these legal acts. 

3.1.4  In the light of the above, the ECB welcomes the provisions of the draft law which, from 1 July 2016, 

will  prohibit  the  use  of  the  bank  levy  to  strengthen  the  own  funds  of  legal  persons  that  are  fully 

owned  by  the  state  and  that  obliges  such  legal  persons  to  transfer  any  income  from  the  use  of 

9  

10  
11  
12  
13  
14  

See paragraph 2.1 of Opinion CON/2013/44 paragraph 2.1 of Opinion CON/2011/29, and paragraph 3.2.1 of Opinion 
CON/2010/62. All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 
See paragraph 2.1 of Opinion CON/2011/29 and paragraph 3.2.2 of Opinion CON/2010/62.  

See paragraph 3.1 of Opinion CON/2011/66 and paragraph 2.1 of Opinion CON/2012/53. 
See paragraph 2.1 of Opinion CON/2012/53and paragraphs 3.2.1 and 2 of Opinion CON/2011/66. 
See paragraph 2.3 of Opinion CON/2012/53. 

Decision  of  the  Government  of  the  Slovak  Republic  No  165/2015  of  8  July  2015  executing  section  4(5)  of  Law 
No 384/2011 on a special levy on selected financial institutions. 

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already strengthened own funds to the extra-budgetary account. Nevertheless, the ECB reiterates 

that  until  1  July  2016,  a  potential  beneficiary  legal  person  should  only  use  own  funds  that  have 

been  strengthened  in  accordance  with  Law  No  371/2014  to  address  concerns  relating  to  the 

stability of the Slovakian financial sector.  

3.2  The use of bank levy proceeds to pre-fund the resolution costs 

3.2.1  Following the introduction of the resolution fund by Law No 371/2014, the ECB has recommended 

making clear in which part of the resolution financing process the income from the bank levy is to 

be employed and how the bank levy proceeds will interact with the resolution fund in order to avoid 
duplication of instruments15. The ECB currently understands that the use of the resolution fund is 

limited  to  the  use  under  Article  92  of  Law  No  371/2014,  whereas  the  bank  levy  proceeds  would 

serve  as  a  funding  backstop  that  is  not  covered  by  the  resolution  fund  and  for  refinancing  the 

deposit guarantee fund. 

3.2.2  In the light of the above, the ECB welcomes the specification for the use of the bank levy proceeds 

to pre-fund reasonable expenses incurred by the Resolution Council in connection with the use of 

resolution  tools  or  powers  that  are  recoverable  from  institutions  undergoing  resolution.  The  ECB 

understands  that  such  expenses  are  to  be  put  back  into  the  extra-budgetary  account  once  the 

Resolution Council recovers these expenses: by (a) deducting any amounts paid in the course of 

the resolution; (b) from any proceeds generated as a result of a bridge institution’s operation being 

terminated;  or  (c)  via  an  asset  management  vehicle,  where  the  Resolution  Council  would  be  a 

preferred creditor. 

4. 

Funding of the resolution fund 

The ECB has advised in the past that, in line with the monetary financing prohibition, NCBs may not fund 
financing arrangements that fund resolution costs16. Therefore the ECB considered the provisions of Law 

No 371/2014, which allowed the Resolution Council to ask NBS to provide credit to the resolution fund, to 
interfere  with  the  monetary  financing  prohibition,  and  advised  that  this  provision  should  be  deleted17. In 

view of the above, the ECB welcomes the amendment made by the draft law, which no longer includes 

the possibility of NBS granting credit to the national resolution fund. 

5. 

Voting of an NBS Board member on the Resolution Council 

The ECB has, in its previous opinion, recommended that Law No 371/2014 should make clear whether 

the  NBS  Board  member  appointed  as  a  member  of  the  Resolution  Council  is  the  NBS  Board  member 

responsible for supervision in the financial market, since this would have an impact on the voting rights of 
the member in question in the Resolution Council18. In this regard, the ECB welcomes the clarification in 

15  
16  
17  
18  

See paragraph 4.1 of Opinion CON/2015/3. 
See paragraph 3.4 of Opinion CON/2012/99. 
See paragraph 3 of Opinion CON/2015/3. 
See paragraph 6 of Opinion CON/2015/3. 

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the draft law that the NBS Board member responsible for supervision in the financial market will not vote 

at a plenary session of the Resolution Council. 

ECB-PUBLIC 

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

Done at Frankfurt am Main, 6 November 2015. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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