Opinion of the European Central Bank of 7 May 2021 on the provision of certain loans and the application of minimum reserve requirements by Narodowy Bank Polski (CON/2021/17)
Date: 2021-05-07
Institutions: European Central Bank
Subjects: financial stability, institutional activity

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 7 May 2021  

on the provision of certain loans and the application of minimum reserve requirements 

by Narodowy Bank Polski 

(CON/2021/17) 

Introduction and legal basis 

On 9 April 2021 the European Central Bank (ECB) received a request from the Polish Ministry of Finance 

for an opinion on certain amendments contained in a draft law amending the Law on Narodowy Bank Polski, 

the Law on the Bank Guarantee Fund, Deposit Guarantee Scheme and Resolution, the Law on banking 

and certain other laws (hereinafter the ‘draft amendments’). 

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), and Article 2(2) of Council 

Decision 98/415/EC1, as the draft amendments relate to Narodowy Bank Polski (NBP), rules applicable to 

financial institutions insofar as they materially influence the stability of financial institutions and markets, 

and the instruments of monetary policy of a Member State which has not adopted 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 amendments 

1.1 

The purpose of the draft amendments is to facilitate certain lending operations of NBP, in particular 

in the context of NBP’s role as lender-of-last-resort in the Polish financial system.  

1.2 

As  noted  in  the  consultation  request,  under  the  current  provisions  of  the  Law  on  the  Bank 

Guarantee Fund, Deposit Guarantee Fund and Resolution2 (hereinafter the ‘Law on the Fund’), the 

Bank Guarantee Fund (hereinafter the ‘Fund’), acting in its capacity as resolution authority, may 

amend  the  terms  of  agreements  to  which  an  entity  under  resolution  is  a  party.  The  draft 

amendments  explicitly  exclude  the  possibility  of  the  Fund  amending  (a)  agreements  related  to 

granting  the  State  Treasury  guarantee  for  the  repayment  of  an  NBP  refinancing  loan  and  (b) 

agreements concluded with NBP, the central banks of other Member States or the ECB. 

1.3 

Under the current provisions of Polish law, the general rules applicable to the transfer of mortgage 

receivables or receivables secured with registered pledges require in any case that a relevant entry 

1  

2  

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). 
Ustawa z dnia 10 czerwca 2016 r. o Bankowym Funduszu Gwarancyjnym, systemie gwarantowania depozytów oraz 
przymusowej restrukturyzacji (Dziennik Ustaw z 2016, poz. 996). 

 
 
 
 
 
 
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in the Land and Mortgage Register is made by the registry court for such a transfer to be effective3. 

The draft amendments introduce an exception to this general rule in the case of (a) refinancing 

loans  granted  by  NBP  to  banks  in  Polish  zloty  in  order  to  replenish  their  money  holdings  or 

implement their recovery plans,(b) short-term loans granted by NBP, at its discretion, to the Fund 

for financing the Fund’s deposit guarantee function, if a threat to financial stability arises and in 

view of the Fund’s urgent needs and (c) short-term loans granted by NBP, at its discretion, to the 

National  Association  of  Cooperative  Savings  and  Credit  Unions  in  the  event  of  a  threat  to  the 

liquidity  of credit  unions.  In  particular,  the  draft  amendments  clarify  that  in  the  case  of  securing 

these loans by the transfer of mortgage receivables or receivables secured with registered pledges, 

the  mortgages  or  registered  pledges  shall  devolve  to  NBP  from  the  date  of  the  granting  of  a 

refinancing loan or a short-term loan. A similar solution is introduced in respect of the collateral 

securing guarantees provided by the State Treasury in respect of NBP’s refinancing loans. As noted 

in  the  consultation  request,  without  these  amendments  the  collateral  may  not  be  effectively 

established  before  the  expiry  of  the  term  for  which  a  loan  is  granted,  which  may  hinder  NBP’s 

performance of its statutory tasks, including the capacity of banks to obtain a refinancing loan in a 

situation posing a threat to the stability of the financial system.  

1.4 

The draft amendments amend the banking secrecy and public procurement regimes in order to 

enable NBP to outsource to Bank Gospodarstwa Krajowego (BGK), a Polish State development 

bank4,  some  of  the  tasks  related  to  granting  refinancing  loans  or  short-term  loans,  including 

securing and servicing of such loans. As noted in the consultation request, there are organisational 

reasons for entrusting BGK with these tasks, in particular when it is necessary to process a large 

number of receivables. Undertaking these additional activities  could require NBP to increase its 

resources  on  an  ad  hoc  basis  which,  due  to  the  limited  time  when  such  activities  would  be 

performed, could prove inefficient for NBP. By contrast, BGK is operationally prepared for these 

kinds of activities. 

1.5 

Finally, the draft amendments introduce the possibility for the NBP Management Board to exempt 

an entity under resolution or a bridge institution from the obligation to maintain minimum reserve 

requirements during the period of resolution. 

2. 

Provision of loans by NBP  

2.1 

The  ECB  welcomes  that  the  draft  amendments  explicitly  exclude  the  possibility  for  the  Fund  to 

amend agreements related to the granting of the State Treasury guarantee for the repayment of a 

refinancing loan and agreements concluded with NBP, the central banks of other Member States 

or the ECB. The exercise of such resolution powers in respect of central bank liquidity operations 

would be inappropriate. 

3  

4  

See Article 79(1) of the Law of 6 July 1982 on the Land and Mortgage Registers and on Mortgage (Ustawa z dnia 6 
lipca 1982 r. o księgach wieczystych i hipotece (Dziennik Ustaw z 1982 r., nr 19, poz. 147)). (and Article 17(1) of the 
Law of 6 December 1996 on the Registered Pledge and the Pledge Registry (.Ustawa z dnia 6 grudnia 1996 r. o 
zastawie rejestrowym i rejestrze zastawów (Dziennik Ustaw z 1996 r., nr 149, poz. 703)). 
For the description of the BKG status and tasks see Opinion CON/2010/70. All ECB opinions are published on EUR-
Lex. 

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2.2 

The ECB welcomes that the draft amendments seek to facilitate the provision of adequate collateral 

for  NBP’s  refinancing  loans.  In  this  respect,  the  existing  administrative  and  procedural  issues 

related to land registry court proceedings can hinder the process of NBP mobilising collateral in the 

form of mortgage receivables or receivables secured by registered pledges. The draft amendments 

will enhance the capacity of credit institutions to obtain liquidity support when needed, including in 

a situation posing a threat to the stability of the financial system. 

2.3 

Regarding NBP’s proposed outsourcing of tasks related to the granting, servicing and securing of 

refinancing loans or short-term loans to the BGK, the ECB understands that these tasks will be 

limited to issues of an administrative and technical nature, such as the processing of a large number 

of mortgage loans in case of a foreclosure of collateral security provided to NBP.  

3. 

NBP minimum reserve requirements  

3.1 

The ECB has noted in earlier opinions5 that Member States whose currency is not the euro retain 

their powers in the field of monetary policy according to national law6. As and when the euro is 

introduced, Poland’s monetary policy will need to be consistent with the Eurosystem’s operational 

framework and credit institutions should therefore be familiar with the requirements that would apply 

to them once the single monetary policy is implemented in Poland. 

3.2 

Regarding  the  envisaged  discretionary  exemption  from  minimum  reserves  requirements  for  an 

entity under resolution or a bridge institution during the resolution period, the ECB legal framework7 

provides that the ECB may grant exemptions from minimum reserve requirements upon request by 

the relevant NCB, where an institution is subject to a reorganisation measure pursuant to Directive 

2001/24/EC  of  the  European  Parliament  and  of  the  Council8.  The  definition  of  a  reorganisation 

measure provided for in Article 2 of Directive 2001/24/EC clarifies that reorganisation measures 

include,  inter  alia,  the  application  of  the  resolution  tools  and  the  exercise  of  resolution  powers 

provided for in Directive 2014/59/EU of the European Parliament and of the Council9.  

3.3 

In  view  of  the  above,  the  ECB  notes  that  the  provisions  of  the  draft  law  allowing  NBP,  at  its 

discretion,  to  exempt  entities  under  resolution  and  bridge  institutions  from  minimum  reserve 

requirements  are,  as  such,  in  line  with  the  Eurosystem  framework  for  minimum  reserve 

requirements. The relevant national provisions will be superseded by the Eurosystem’s framework 

governing  minimum  reserves  upon  Poland’s  accession  to  the  euro  area.  Currently,  the 

consequence  of  exempting  an  entity  (that  is  a  Eurosystem  monetary  policy  counterparty  at  the 

5  

6  

7  

8  

9  

See paragraph 2.2 of Opinion CON/2018/48 and paragraph 2 of Opinion CON/2016/40. 

Article  282(4)  of  the  Treaty  and  Article  42.2  of  the  Statute  of  the  European System  of  Central  Banks  and  of  the 
European Central Bank. 
See Article 4(2)(a) of Regulation (EU) 2021/378 of the European Central Bank of 22 January 2021 on the application 
of minimum reserve requirements (ECB/2021/1), which will apply from 26 June 2021 (OJ L 73, 3.3.2021, p. 1). 
See Directive 2001/24/EC of the European Parliament and of the Council of 4 April 2001 on the reorganisation and 
winding up of credit institutions (OJ L 125, 5.5.2001, p. 15).  

See 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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same  time)  from  minimum  reserve  requirements  is  that  it  loses  access  to  the  Eurosystem’s 

monetary policy operations10. 

4. 

Prohibition of monetary financing 

4.1 

Refinancing loans granted by NBP to credit institutions 

In line with the ECB’s Convergence Report 2020, the ECB reiterates the recommendation for the 

introduction in the Law on NBP11 of explicit safeguards with a view to ensuring compatibility with 

the monetary financing prohibition under Article 123(1) of the Treaty12. This refers, in particular, to 

Article 42(3) of the Law on NBP, which allows NBP to grant refinancing loans for the purpose of 

implementing a bank rehabilitation plan, which is initiated in the event of a bank infringing, or being 

likely to infringe, certain requirements relating to, among other things, own funds, and the liquidity 

ratio. Currently, safeguards aimed at ensuring timely repayment of such loans do not fully exclude 

an  interpretation  that  would  allow  an  extension  of  refinancing  credit  to  a  bank  undergoing 

rehabilitation proceedings that then becomes insolvent. 

4.2 

Short-term loans granted by NBP to the Fund 

As a preliminary point, the ECB notes that an appraisal based on the guiding criteria contained in 

the ECB’s Convergence Report regarding national legislation which provides for the financing by 

a national central bank (NCB) of a deposit guarantee scheme13, while necessary, is not sufficient 

for a comprehensive analysis of compatibility with the monetary financing prohibition. The reason 

is  that  those  criteria  are  predicated  on  the  implicit  assumption  of  the  possibility  of  short-term 

financial support to entities outside the public sector. The assumption ensures a coherent reading 

of the criteria against the wording of Article 123(1) of the Treaty which explicitly prohibits NCBs 

from  granting  overdraft  facilities  or  any other  type  of  credit  facility  to  the  public  authorities  and 

bodies of Member States. Consequently, this opinion analyses the provisions laid down in the Law 

on NBP and the Law on the Fund regarding short-term loans granted by NBP to the Fund from 

the perspective of the status of the Fund14. In particular, it considers whether the Fund is a ‘body 

governed by public law’ within the meaning of Article 123(1) of the Treaty15.  

10  

11  
12  
13  

14  

15  

implementation  of 

the  Eurosystem  monetary  policy 

See for example Article 55(a) of Guideline (EU) 2015/510 of the European Central Bank of 19 December 2014 on 
framework  (General  Documentation  Guideline) 
the 
(ECB/2014/60) (OJ L 91, 2.4.2015, p. 3). 
Ustawa z dnia 29 sierpnia 1997 r. o Narodowym Banku Polskim (Dziennik Ustaw z 2017 r., poz. 1373). 
See the ECB’s Convergence Report 2020, pp. 199-200. 
See  the  ECB’s  Convergence  Report  2020,  p.  35.  According  to  these  guiding  criteria,  national  legislation  which 
provides  for  the  financing  by  an  NCB  of  a  deposit  guarantee  scheme  would  be  compatible  with  the  monetary 
financing prohibition laid down in Article 123(1) of the Treaty only if it were short term, addressed urgent situations, 
systemic stability aspects were at stake, and decisions were at the NCB’s discretion. 

Previous recommendations made by the ECB in its opinions regarding the Fund addressed only issues raised by 
the consistency with the guiding criteria contained in the ECB’s Convergence Report – see, for example, paragraph 
3.3 of ECB Opinion CON/2012/58. 
On the need to assess the status of the deposit guarantee fund, see paragraph 2.2 of Opinion CON/2020/24. For an 
earlier example, see paragraph 11 of Opinion CON/2005/50. 

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4.3 

The ECB recalls that, notwithstanding the absence of a specific definition of the concept of ‘body 

governed by public law’ in Council Regulation (EC) No 3603/9316, other areas of Union law and the 

related  case-law  of  the  Court  of  Justice  of  the  European  Union  provide  guidance  on  its 

interpretation  for  the  purposes  of  the  monetary  financing  prohibition17.  Accordingly,  a  body  is 

‘governed by public law’ within the meaning of Article 123(1) of the Treaty if it has all of the following 

characteristics: (a) it is established for the specific purpose of meeting needs in the general interest, 

not having an industrial or commercial character; (b) it has legal personality; and (c) it is closely 

dependent  on  the  public  sector  entities  referred  to  in  Article  123(1)  of  the  Treaty.  A  close 

dependence on those public sector entities is presumed when a body is financed, for the most part, 

by them; or is subject to management supervision by them; or has an administrative, managerial 

or supervisory board, more than half of whose members are appointed by them. 

4.4 

The ECB notes that currently the Fund has the following main characteristics. It is a legal person 

and  performs  the  function  of  the  national  resolution  authority  and  administrator  of  the  deposit 

guarantee scheme. The purpose of the Fund’s activities is to take measures aimed at stabilising 

the domestic financial system, in particular by ensuring the functioning of the compulsory deposit 

guarantee scheme and conducting compulsory restructuring proceedings18. The governing bodies 

of the Fund are the Fund Council and the Fund Management Board19. The Fund Council consists 

of  six  members,  comprising  three  representatives  of  the  Minister  competent  for  financial 

institutions,  including  the  Chairman  of  the  Fund  Council,  two  representatives  of  NBP  and  one 

representative  of  the  Polish  Financial  Supervision  Authority20.  The  Fund  Management  Board  is 

composed  of  three  to  five  members,  including  the  President  and  the  Vice-President,  and  is 

appointed by the Fund Council21. The main sources of the Fund’s financing include mandatory ex-

ante annual contributions, extraordinary ex-post contributions, income from financial assets of the 

Fund, funds from short-term loans granted by NBP, funds from loans granted from the State budget, 

and funds received as a result of borrowing and issuing bonds22. 

4.5 

It follows that the conditions mentioned above are all met since (a) the Fund has been established 

for  the  purpose  of  meeting  needs  in  the  general  interest  –  especially  tasks  related  to  financial 

stability,  administering  the  deposit  guarantee  scheme  and  resolution;  (b)  the  Fund  has  legal 

personality; and (c) the majority of the members of the Fund Council are appointed by the Minister 

competent for financial institutions and the Financial Supervisory Authority.  

4.6 

In light of the foregoing, the ECB is of the view that the Fund qualifies as a ‘body governed by public 

law’ within the meaning of Article 123(1) of the Treaty. Consequently, given the current features of 

the  Fund,  the  provisions  laid  down  in  the  Law  on  NBP  and  the  Law  on  the  Fund  regarding  the 

16  

17  
18  

19  
20  
21  

22  

Council  Regulation  (EC)  No  3603/93  of  13  December  1993  specifying  definitions  for  the  application  of  the 
prohibitions referred to in Articles 104 and 104b (1) of the Treaty (OJ L 332, 31.12.1993, p. 1). 
See paragraph 2.3 of Opinion CON/2020/24 and the references made therein. 

See Article 4 of the Law on the Fund. 
See Article 6(1) of the Law on the Fund. 
See Article 7(4) of the Law on the Fund. 
See Article 10 of the Law on the Fund. 

See Article 270 of the Law on the Fund. 

5 

 
possibility  of  NBP  granting  loans  to  the  Fund  are  not  compatible  with  the  monetary  financing 

prohibition and should be amended accordingly. 

ECB-PUBLIC 

This opinion will be published on EUR-Lex. 

Done at Frankfurt am Main, 7 May 2021. 

[signed] 

The President of the ECB 

Christine LAGARDE 

6