Opinion of the European Central Bank of 4 November 2020 on the abolition of the special levy on selected financial institutions (CON/2020/28)
Date: 2020-11-04
Institutions: European Central Bank
Subjects: financial stability

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 4 November 2020 

on the abolition of the special levy on selected financial institutions  

(CON/2020/28) 

Introduction and legal basis 

On  30  September  2020  the  European  Central  Bank  (ECB)  received  a  request  from  the  Ministry  of 

Finance  of  the  Slovak  Republic  for  an  opinion  on  a  draft  law  abolishing  a  special  levy  on  selected 
financial institutions and on certain measures in connection with this abolition (hereinafter the ‘draft law’) 1.  

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/EC2, as 

the  draft  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 law 

1.1 

Law No 384/2011 Coll. on a special levy on selected financial institutions and on amendments of 
certain laws (hereinafter the ‘Law No 384/2011’)3 imposes an obligation on banks and branches of 

foreign  banks  operating  in  Slovakia  (hereinafter  collectively  referred  to  as  the  ‘banks’)  to  pay  a 

special  levy.  The  proceeds  of  this  special  levy  are  State  financial  assets  with  the  designated 

purpose  of  covering  costs  related  to  the  resolution  of  financial  crises  in  the  banking  sector  and 

protecting  the  financial  stability  of  the  Slovak  banking  sector,  including  the  replenishment  of  the 

Deposit  Protection  Fund  necessary  for  expenses  due  to  the  payment  of  compensation  for 

unavailable deposits. The draft law abolishes the special levy on selected financial institutions as of 

1 January 2021 and repeals Law No 384/2011.  

1.2  The draft law stipulates that the balances of the collected levies will remain State financial assets in 

accordance with Law No 523/2004 on general government budgetary rules and amending certain 
laws 4.  The  explanatory  memorandum  to  the  draft  law  states  that  the  intention  is  to  use  these 

assets in accordance  with the Memorandum of Understanding concluded between the Ministry of 

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Návrh zákona o zrušení osobitného odvodu vybraných finančných inštitúcií a o niektorých opatreniach súvisiacich s 
jeho zrušením. 

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). 
Zákon č. 384/2011 Z.z. o osobitnom odvode vybraných finančných inštitúcií a o doplnení niektorých zákonov. 

Zákon č.523/2004 Z.z. o rozpočtových pravidlách verejnej správy a o zmene a doplnení niektorých zákonov. 

 
 
 
 
                                                 
ECB-PUBLIC 

Finance  of  the  Slovak  Republic  and  the  Slovak  Banking  Association  in  June  2020    to  fund  the 

activities  of  the  Slovak  Development  Fund,  which  will  focus  on  supporting  and  financing 
development programs of the Slovak Government5. A smaller part of the funds6 will also be used to 

strengthen  the  Slovak  Deposit  Protection  Fund  and  the  Slovak  Crisis  Resolution  Fund,  and  to 

reimburse  eligible  expenses  of  the  Crisis  Resolution  Council  pursuant  to  Law  No  371/2014  on 
resolution in the financial market and on amendments to certain laws 7.  

2. 

Abolition of the levy and the use of proceeds 

The  abolition  of  the  levy  may  contribute  to  an  increase  of  the  capital  generation  capacity  of  credit 
institutions and support lending to the real economy. 8 The ECB welcomes the intended use of part of the 

collected  funds  for  strengthening  the  Slovak  Deposit  Protection  Fund  and  the  Slovak  Crisis  Resolution 

Fund,  which  will  contribute  to  improving  the  resilience  of,  and  confidence  in,  the  financial  sector. 
However, following up on its observations in its past opinions 9, the ECB is of the view that the use of a 

large  portion  of  levies  already  collected  for  purposes  unrelated  to  financial  stability  would  weaken  the 

overall robustness of the financial sector if no concomitant safeguards to enhance its stability are put in 

place. An example of such a safeguard would be a mechanism designed to allow all the funds that have 

been already collected from the financial sector to be available in the event of a crisis. 

This opinion will be published on EUR-Lex. 

Done at Frankfurt am Main, 4 November 2020.  

[signed] 

The President of the ECB 

Christine LAGARDE 

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Although  the  Memorandum  of  Understanding  expresses  the  intention  regarding  supporting  and  financing 
development  programs  of  the  Slovak  Government,  the  exact  modalities  of  the  distribution  of  funds  is  not  yet 
specified by law. 
See the Memorandum of Understanding concluded between the Ministry of Finance of the Slovak Republic and the 
Slovak Banking Association in June 2020. 
Zákon č.371/2014 Z.z. o riešení krízových situácií na finančnom trhu a o zmene a doplnení niektorých zákonov. 

See paragraph 2.3 of Opinion CON/2019/40. All ECB opinions are published on EUR-Lex. 
See, 
for  example,  paragraph  3.2.1  of  Opinion  CON/2010/62,  paragraph  2.1  of  Opinion  CON/2011/29, 
paragraph 3.2.1  of  Opinion  CON/2011/66,  paragraph  2.1  of  Opinion  CON/2012/53,  paragraphs  3.1.1  and  3.1.2  of 
Opinion CON/2015/43 and paragraph 2.1 of Opinion CON/2019/40. 

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