Opinion of the European Central Bank of 17 April 2020 on the identification and reporting by financial institutions of the allocation of sums deposited in savings accounts (CON/2020/12)
Date: 2020-04-17
Institutions: European Central Bank
Subjects: banking supervision, legal basis

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 17 April 2020 

on the identification and reporting by financial institutions of the 

allocation of sums deposited in savings accounts  

(CON/2020/12) 

Introduction and legal basis 

On 20 February  2020 the  European Central Bank (ECB) received  a request from the  Secretariat  of the 

Belgian  Parliament’s  Commission  of  Economy  on  a  draft  law  amending  the  Belgian  Code  of  Economic 
Law1 (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 indent of Article 2(1) of Council Decision 98/415/EC 2, as 

the  draft  law  relates  to  the  Banque  Nationale  de  Belgique/Nationale  Bank  van  België  (‘NBB’)  and  the 

ECB’s  tasks  concerning  the  prudential  supervision  of  credit  institutions  pursuant  to  Article  127(6)  of  the 

Treaty.  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 

1.1  The draft law imposes a duty on financial institutions to identify the allocation of sums deposited on 

savings accounts in their balance sheets. According to the explanatory memorandum, the purpose 

of this obligation is to encourage transparency, higher ethical standards and greater control in the 

Belgian banking sector. 

1.2  Pursuant  to  the  draft  law,  financial  institutions  would  have  to  draft  a  report  each  year  on  the 

allocation of those sums. This report  would be filed  with the NBB. Under the  draft law, the report 

would  also  be  sent  to  the  Belgian  Chamber,  one  of  the  two  main  assemblies  of  the  Belgian 

Parliament.  The  explanatory  memorandum  specifies  that  the  Committee  of  Finance  and  Budget 

within the Chamber would analyse the report carefully. 

1.3  The  draft  law  would  further  confer  on  the  King  the  power  to  adopt  a  Royal  Decree  in  order  to 

determine  the  technical  modalities  of  the  allocation  of  the  sums  and  to  establish  a  model  of  the 

report. 

1  

2  

Loi du 28 février introduisant le Code de droit économique/Wet van 28 februari 2013 tot invoering van het Weboek 
van  economisch  recht,  telle  que  modifiée/zoals  nader  gewijzigd,  Moniteur  Belge/Belgisch  Staatsblad,  29.3.2013, 
p. 19975. 
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). 

 
 
 
 
 
 
                                                 
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2. 

Observations 

2.1  The  ECB  appreciates  that  the  draft  law  intends  to  encourage  transparency,  higher  ethical 

standards  and  greater  control  in  the  Belgian  banking  sector.  However,  whether  the  measures 

contemplated by the draft law adequately serve this purpose should be reconsidered. 

2.2  First, regarding Belgian credit institutions supervised by the ECB within the framework of the Single 

Supervisory  Mechanism,  the  ECB  is  responsible  for  carrying  out  various  tasks  for  prudential 

supervisory  purposes  in  relation  to  credit  institutions  established  in  Belgium.  These  tasks  include 

ensuring compliance with all relevant Union law, including Union regulations and Belgian legislation 

transposing Union directives, which impose (a) prudential requirements in the areas of own funds 

requirements,  securitisation,  large  exposure  limits,  liquidity,  leverage,  and  reporting  and  public 

disclosure  of  information  on  those  matters,  and  (b)  requirements  on  credit  institutions  to  have  in 

place robust governance  arrangements, including the fit and proper requirements for the persons 

responsible for the management of credit institutions, risk management processes, internal control 

mechanisms,  remuneration  policies  and  practices  and  effective  internal  capital  adequacy 
assessment processes3. Against this backdrop, the Belgian legislator is invited to consider how the 

proposed  new  reporting  obligation  imposed  by  the  draft  law  on  financial  institutions  to  identify  in 

their balance sheets the allocation of sums deposited on saving accounts would fit into the existing 

Union  and  Belgian  legal  and  regulatory  framework  for  the  prudential  supervision  of  credit 

institutions.  Taking  existing  reporting  and  disclosure  obligations  of  credit  institutions  regarding 

prudential matters into account, consideration could also be given as to whether this new reporting 

obligation  would  increase  the  reporting  burden  of  credit  institutions,  and  if  so,  for  what  purposes, 

such  as  encouraging  transparency,  higher  ethical  standards  and  greater  control.  It  is  suggested 

that  the  Belgian  legislator  considers  the  added  value  of  the  reporting  obligations  that  would  be 

implemented under the draft law. 

2.3  Second,  while  it  should  be  feasible  for  a  credit  institution  to  identify  and  report  on  the  amount  of 

liabilities that are represented by deposits on savings accounts, it is not clear what is intended by 

the  obligation  on  credit  institutions  to  identify  and  report  on  the  allocation  of  sums  deposited  on 

savings  accounts.  The  liabilities,  including  deposit  liabilities  and  the  equity  of  a  credit  institution, 

come  from  a  variety  of  different  funding  sources,  as  clarified  in  the  financial  statements  of  that 

credit institution. In principle, insofar as credit institutions comply with the prudential requirements 

set out in Union law, there are no constraints on how funding is used. Therefore, the identification 

of  the  allocation  of  each  source  of  financing  is  in  practice  extremely  difficult,  if  not  completely 

impossible. Given the diversity of a credit institution’s sources of funding, and – quite importantly - 

given the intrinsically fungible character of money, it would not be feasible for a credit institution to 

identify the exact source  of financing  when extending  a particular  loan or investing in a particular 

asset. In fact, this would only be possible in cases where the assets, invested in using deposits in 

savings accounts, had been segregated from the rest of the institution’s assets. 

2.4  Third, the reporting obligation of financial institutions vis-à-vis the NBB, as set out in the draft law, 

3  

See Article 4(1)(d) and (e) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on 
the European Central Bank concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 
29.10.2013, p. 63). 

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raises some uncertainties. The content of the report has not been specified. Although the draft law 

provides  that  the  King  must  determine  a  model  of  the  report  in  a  royal  decree,  the  level  of  detail 

that the financial institutions will have to respect remains undefined in the draft law. Moreover, the 

King must determine the ‘technical modalities of the allocation of the sums’. The draft law does not 

specify what this precisely refers to. As the Royal Decree would clarify the content of the report and 

the practical modalities of the obligations set forth in the draft law, the ECB expects to be consulted 

on the draft Royal Decree on the basis of Article 127 (4) of the Treaty. 

2.5  Fourth, the NBB’s powers and tasks with respect to the measures contemplated by the draft law, 

and  more  particularly  the  annual  report  to  be  filed  by  Belgian  financial  institutions  with  the  NBB, 

remain at this stage  undefined  in the  draft law. The draft law requires that the report be annually 

submitted to the NBB, but does not specify what the NBB should do with the information received. 

The draft law could helpfully indicate whether the NBB is expected to use this annual report within 

the scope of its existing powers and tasks, or  whether the submission of the report  would trigger 

any  particular  obligation  or  power  for  the  NBB.  The  ECB  expects  to  be  consulted  under 

Article 127 (4) of the Treaty insofar as new tasks are conferred on the NBB under the draft law. 

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

Done at Frankfurt am Main, 17 April 2020. 

[signed] 

The President of the ECB 

Christine LAGARDE 

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