Opinion of the European Central Bank of 30 August 2016 on amendments to the minimum reserves regime (CON/2016/40)
Date: 2016-08-30
Institutions: European Central Bank
Subjects: Romania, administrative sanction, credit institution, financial supervision, foreign-exchange reserves, monetary policy, national law

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 30 August 2016 

on amendments to the minimum reserves regime 

(CON/2016/40) 

Introduction and legal basis 

On 29 July 2016 the European Central Bank (ECB) received a request from Banca Naţională a României 

(BNR)  for  an  opinion  on  a  draft  regulation  amending  the  BNR  Regulation  on  the  minimum  reserves 

regime (hereinafter the ‘draft regulation’). 

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  indent  of  Articles  2(1),  and  Article  2(2)  of  Council 
Decision  98/415/EC1,  as  the  draft  regulation  relates  to  a  national  central  bank  and  instruments  of 

monetary policy in a Member State whose currency is not the euro. 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 regulation 

1.1  The  draft  regulation  updates  the  legal  framework  governing  the  minimum  reserves  regime 
established  by  BNR  (hereinafter  the  ‘BNR  Regulation’)2  with  a  view  to  replacing  references  to 

certain repealed legal acts, replacing the legal basis for BNR’s power to take punitive action in the 

event  of  certain  infringements  of  the  BNR  Regulation,  and  expanding  the  circumstances  under 

which BNR may impose exceptional reserve requirements for a defined period of time with regard 

to certain credit institutions.  

1.2  Under  the  draft  regulation,  certain  infringements  of  the  minimum  reserves  regime  are  no  longer 

qualified  as  a  breach  of  banking  conduct  but  as  a  breach  of  a  BNR  regulation.  Hence,  such 

infringements are no longer subject to the sanctioning regime under the banking law, but instead to 
the sanctioning regime under the Statute of BNR3. As a consequence, where a credit institution (i) 

repeatedly fails to report or misreports the reserve base and data for the calculation of the average 

interest  rate  on  demand  deposits,  or  (ii)  modifies  accounting  operations  and/or  statistical  data  in 
order  to  decrease  its  minimum  reserves, BNR  may  impose  the  following  sanctions4:  (a)  a  written 

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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). 
Regulation  No  6/2002  of  Banca  Naţională  a  României  regarding  the  minimum  reserves  regime,  published  in 
Monitorul Oficial al României, Part I, No 566 of 1 August 2002. 

See  Article  57  of  Law  No  312/2004  regarding  the  Statute  of  Banca  Naţională  a  României,  published  in  Monitorul 
Oficial al României, Part I, No 528 of 30 June 2004. 

See paragraph 3 of the sole Article of the draft regulation, which amends Article 27 of the BNR Regulation. 

 
 
 
 
                                                 
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warning;  (b)  a  fine  from  500  to  5  000  Romanian  lei;  (c)  partial  or  total  suspension  of  the 

authorisation granted by BNR for a period of up to 90 days; and (d) withdrawal of the authorisation 

granted by BNR.  

1.3  Furthermore,  according  to  the  draft  regulation,  where  a  credit  institution  fails  to  hold  the  required 

minimum  reserves  for  two  consecutive  maintenance  periods,  BNR  may  carry  out  an  on-site 

inspection  at  the  institution’s  headquarters.  In  addition,  should  the  failure  to  hold  the  required 

minimum reserves occur more than twice  within a  12-month  period,  BNR may  impose  any  of  the 

sanctions  provided  by  the  Statute  of  BNR  for  breach  of  a  BNR  regulation  as  listed  in  paragraph 
1.25.  

1.4  The draft regulation also amends the provision that lays down the circumstances under which BNR 

may establish exceptional reserve requirements, for a defined period of time, with regard to certain 

credit  institutions.  The  application  of  an  exceptional  regime,  which  includes  exemptions  from 

penalty interest payments and the exclusion of certain liabilities from the reserve base, is subject to 

approval  by  the  BNR’s  Board.  It  may  be  applied  on  a  case-by-case  basis  with  regard  to  credit 

institutions  subject  to  crisis  prevention  or  crisis  management  measures,  as  well  as  in  any  other 

exceptional situations justified by objective considerations where the purpose of imposing minimum 
reserves requirements would not be met6. In this regard, the explanatory memorandum to the draft 

regulation  notes  that  the  said  amendment  aims  to  enable  BNR  to  apply,  for  a  defined  period, 

‘derogatory’  reserves  requirements  in  respect  of  certain  liabilities  with  residual  maturity  over  two 

years with a view to supporting an adequate capitalisation of credit institutions.  

2. 

General observations 

The  ECB  welcomes  BNR’s  initiative  to  update  the  legal  framework  governing  the  minimum 

reserves regime. As a Member State whose currency is not the euro, Romania retains its powers in 

the field of monetary policy according to national law until such time as the relevant derogation is 

lifted  and  Romania  adopts  the  euro.  This  notwithstanding,  it  is  beneficial  to  achieve  consistency 
with the Eurosystem’s minimum reserves framework7 so that credit institutions become acquainted 

with  the  reserves  requirements  that  will  apply  to  them  following  the  adoption  of  the  euro  in  the 
Member State where they are established8. To that end, BNR should already give consideration to 
gradually bringing its regulations in this field in line with Eurosystem standards9. 

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See paragraph 4 of the sole Article of the draft regulation, which amends Article 28(2) of the BNR Regulation. Article 
57 of the Statute of BNR constitutes the general provision for the imposition of sanctions in case of a breach of the 
Statute  and  BNR  regulations  and  decisions.  In  addition,  in  the  area  of  minimum  reserves,  special  provisions  on 
sanctions  are  laid  down  in  Article  8(4)  of  the  Statute  of  BNR  and  Article  12  of  the  BNR  Regulation,  according  to 
which  BNR  shall  calculate  and  impose  penalty  interest,  at  a  rate  established  by  BNR,  for  the  failure  to  hold  the 
required reserves over the maintenance period.  
See paragraph 5 of the sole Article of the draft regulation, which amends Article 29 of the BNR Regulation. 

See,  in  particular,  Article  19  of  the  Statute  of  the  European  System  of  Central  Banks  and  the  European  Central 
Bank; Council Regulation (EC) No 2531/98 of 23 November 1998 concerning the application of minimum reserves 
by the European Central Bank (OJ L 318, 27.11.98, p. 1); Regulation (EC) No 1745/2003 of the European Central 
Bank  of  12  September  2003  on  the  application  of  minimum  reserves  (ECB/2003/9)  (OJ  L  250,  2.10.2003,  p.  10); 
Regulation (EU) No 1071/2013 of the European Central Bank of 24 September 2013 concerning the balance sheet 
of the monetary financial institutions sector  (ECB/2013/33) (OJ L 297, 7.11.2013, p. 14). 

In the same vein, see Opinions CON/2014/42, CON/2013/79, CON/2011/75 and CON/2011/73. 
See, in this regard, paragraph 3.2 of Opinion CON/2011/73. On that occasion, the ECB also noted the differences at 
the time between the domestic minimum reserves regime and the Eurosystem’s minimum reserves framework.   

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3. 

Specific observations 

3.1  Sanctions in the event of certain infringements 

The  ECB  noted  in  an  earlier  opinion10  that,  under  the  Romanian  minimum  reserves  regime,  the 

sanctions in cases of non-compliance are considerably more severe than those provided for under 

the  Eurosystem’s  minimum  reserves  framework.  Following  the  amendments  proposed  under  the 

draft  regulation,  the  sanctioning  regime  applied  to  credit  institutions  failing  to  comply  with 

obligations  imposed  upon  them  by  BNR  becomes  even  more  severe.  Thus,  pursuant  to  the 

amended Article 28(2) of the BNR Regulation, the sanctions that BNR is empowered to apply for 

the failure to hold the required minimum reserves more than twice within a 12-month period are no 

longer  confined  to  warnings,  fines  and  levying  a  penalty  interest,  but  also  include  partial  or  total 

suspension  of  an  authorisation  for  a  period  of  up  to  90  days  as  well  as  withdrawal  of  an 

authorisation. In contrast, for the same type of infringements, the Eurosystem’s minimum reserves 
framework provides for periodic penalty payments only11. The ECB invites the consulting authority 

to ensure that the sanctions applied under the BNR Regulation are proportional and suitable for the 

purposes of minimum reserves requirements.    

3.2  Exceptional reserve requirements 

The  ECB  understands  that  the  amendment  to  Article  29  of  the  BNR  Regulation  aims  to  enable 

BNR’s  Board  to  apply  an  exceptional  minimum  reserves  regime  to  credit  institutions  which  may 

temporarily face difficulties in meeting their capital requirements. In this regard, the ECB cautions 

against  setting  temporary  tailor-made  reserve  requirements  for  certain  credit  institutions.  Any 

exemptions from the obligation to hold certain minimum reserves should be established based on 

clear criteria and the principle of non-discrimination. From this perspective, it is noted that pursuant 

to  the  draft  regulation  the  application  of  the  exceptional  regime  has  to  be  decided  on  objective 

grounds.  However,  it  is  not  clear  what  are  these  ‘exceptional  circumstances’,  other  than  crisis 

prevention  or  crisis  management,  that  may  be  considered  by  BNR’s  Board  in  taking  such  a 

decision.  

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

Done at Frankfurt am Main, 30 August 2016. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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See paragraph 3.3.4 of Opinion CON/2011/73.   

See Article 7(1) of Council Regulation (EC) No 2531/98. 

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