Opinion of the European Central Bank of 27 June 2023 on the introduction of a banking oath and certain supervisory and resolution matters (CON/2023/17)
Date: 2023-06-27
Institutions: European Central Bank
Subjects: legal basis

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 27 June 2023 

on the introduction of a banking oath and certain supervisory and resolution matters 

(CON/2023/17) 

Introduction and legal basis 

On 12 May 2023 the European Central Bank (ECB) received a request from the Belgian Minister for Finance 

for  an  opinion  on  a  draft  law  containing  various  financial  law  provisions,  including,  inter  alia,  provisions 

concerning  a  banking  oath  and  a  disciplinary  regime  for  persons  working  for  credit  institutions,  and  the 

adaptation of Belgian law to EU regulations concerning the resolution of central counterparties and a pan-

European personal pension product (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  (TFEU)  and  the  third  indent  of  Article 2(1)  of  Council  Decision 

98/415/EC1, as the draft law relates to the Nationale Bank van België/Banque Nationale de Belgique (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.

Banking oath and disciplinary regime for persons working for credit institutions

1.1 

Purpose of the draft law’s provisions on the banking oath and disciplinary regime

1.1.1  The draft law amends a Belgian law of 20192 to establish a banking oath and a disciplinary regime

for persons who are working for credit institutions and intermediaries in banking and investment 

services,  and  who  have  a  function  linked  to  banking  services.  As  noted  in  the  explanatory 

memorandum accompanying the draft law3, the Law of 2019, which has not yet come into force, 

formed part of the Belgian legislative response to the financial crisis in light of the lessons learned, 

particularly in view of the impact of the crisis on public confidence in the banking sector. The draft 

law pursues the same objective but modifies some features of the original regime. 

1.1.2  The  disciplinary  regime  introduced  by  the  draft  law  applies  to,  among  others,  persons  already 

subject to a fit and proper assessment by the NBB or the ECB. Any concerned person must take 

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). 
The law of 22 April 2019 modifying the law of 25 April 2014 on the statute and control of credit institutions and trading 
companies in order to establish a banking oath and a disciplinary regime (Loi du 22 avril 2019 modifiant la loi du 25 
avril 2014 relative au statut et au contrôle des établissements de crédit et des sociétés de bourse en vue d'instaurer 
un serment bancaire et un régime disciplinaire / Wet van 22 april 2019 tot wijziging van de wet van 25 april 2014 op 
het  statuut  van  en  het  toezicht  op  kredietinstellingen,  betreffende  de  invoering  van  een  bankierseed  en  een 
tuchtrechtelijke regeling), Moniteur Belge/Belgisch Staatsblad, 2 May 2019, p. 42442. 
See general explanation section of Chapter 14 of the explanatory memorandum accompanying the draft law 

ECB-PUBLIC 

an individual  oath when they begin their function and follow  a code  of conduct  when  exercising 

their  function.  The  Financial  Services  and  Market  Authority  (FSMA)  would,  after  consulting  the 

NBB, adopt a regulation specifying the practical modalities of the individual declaration, and a Royal 

Decree would be adopted specifying the code of conduct that must be complied with. This code of 

conduct would impose general obligations and list prohibited behaviours. 

1.1.3  The FSMA is the main competent authority ensuring compliance with the code of conduct. Pursuant 

to the draft law the FSMA is given powers of inquiry into any claim it receives or any information it 

discovers when exercising its competences. Specifically, if the FSMA is made aware of a potential 

breach of the code of conduct, the FSMA auditor is to conduct an inquiry. If the inquiry concerns a 

person working in a credit institution who is subject to a fit and proper assessment by the NBB or 

the  ECB,  the  FSMA  is  to  inform  the  NBB  accordingly.  The  draft  law  specifies  that  the  auditor 

exercises its function while respecting all rights of defence.  

1.1.4  At the end of the inquiry, the auditor drafts a preliminary report and sends it to the person covered 

by the report, who is entitled to provide comments or to request additional instruction acts, both 

within a period of one month. If the auditor decides against proceeding with the requested additional 

instruction acts, this must be justified in the auditor’s final report.  

1.1.5  The disciplinary regime introduced  by the draft  law also applies to persons who are not already 

subject to a fit and proper assessment by the NBB or the ECB, and the draft law provides that the 

FSMA is the competent authority to impose sanctions on such persons. Whereas the FSMA is not 

competent to impose any sanction if a report of the FSMA auditor pursuant to the draft law concerns 

a person already subject to a fit and proper assessment by the NBB or the ECB. In such a case, 

the FSMA is to share the final report with the NBB. If the report concerns a person working in a 

significant institution that is subject to prudential supervision by the ECB within the framework of 

the  Single  Supervisory  Mechanism  (SSM),  the  NBB  is  to  forward  the  report  to  the  ECB.  When 

receiving the report, the NBB or the ECB, as the case may be, may at its sole discretion, decide to 

use it or not within the framework of the competences it already has, including the fit and proper 

assessment.  

1.1.6  As noted in the explanatory memorandum, disciplinary actions taken by the FSMA are to be without 

prejudice to the supervisory powers of the NBB and the ECB, in particular as regards the exclusive 

powers of the NBB and the ECB under Council Regulation No 1024/20134 (hereinafter the ‘SSM 

Regulation’) with respect to fit and proper requirements. 

1.2 

Observations on the draft law’s provisions on the banking oath and the disciplinary regime 

1.2.1  The  ECB  welcomes  the  measures  envisaged  by  the  draft  law  regarding  the  banking  oath  and 

disciplinary regime applicable to persons who work for credit institutions, and the fact that these 

measures are taken in the context of lessons learned from the financial crisis, in particular in view 

of its impact on public confidence in the financial sector, and more specifically in the banking sector.  

1.2.2  Within  the  SSM,  the  FSMA’s  reports  will  support  suitability  (re-)assessments  by  providing  an 

additional source of information which will be taken into account when the suitability of an individual 

4 

Council  Regulation  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). 

2 

 
ECB-PUBLIC 

is being (re-)assessed, in line with the ECB Guide to fit and proper assessments 5. The draft law’s 

measures will reinforce the governance framework of credit institutions. The behavioural patterns 

exhibited by persons having managerial functions linked to banking services, as well as the drivers 

that  underpin  that  behaviour,  are  elements  that  determine  how  robust  a  credit  institution’s 

governance  framework  is.  It  is  imperative  to  adequately  address  unwarranted  behaviour  by 

individuals  at  a  credit  institution  who  decide  to  adopt  a  behaviour  that  would  impact  their 

professional honesty and integrity. If such acts have no apparent consequence, that will be noticed 

by staff in the credit institution, leading to the development of a new group norm. The overriding 

behaviour and culture within a credit institution are thus the product of both individual behaviour 

and the underlying culture that acts as a breeding ground for that behaviour. It is important for a 

credit institution to identify and be aware of the structures, beliefs and group dynamics which echo 

throughout the entire institution, and which may pose a risk to its performance and stability. Credit 

institutions’ management bodies should be attentive to these intangible but real underlying drivers 

of behaviour and, if warranted, acknowledge the need to shift the paradigm before it is too late and 

negative practices become the norm6.       

1.2.3  The ECB welcomes the fact that the explanatory memorandum expressly specifies that disciplinary 

actions of the FSMA are to be without prejudice to the prudential supervisory powers of the ECB 

and the NBB, in particular concerning fit and proper requirements. In this respect it is noted that 

the  prudential  supervisory  powers  of  the  ECB  are  provided  for  in  the  SSM  Regulation,  which 

constitutes the legal basis for the supervisory actions the ECB may decide to undertake.  

2. 

Amendment of  Belgian law to implement Union legislation on  recovery  and resolution of 

central counterparties  

2.1 

Purpose  of  the  draft  law’s  provisions  amending  Belgian  law  to  implement  Union  legislation  on 

recovery and resolution of central counterparties 

2.1.1  The draft law modifies the Law of 22 February 1998 establishing the organic status of the National 

Bank of Belgium (hereinafter the ‘Organic Law of the NBB’) 7 in order to implement Regulation (EU) 

2021/23  of  the  European  Parliament  and  of  the  Council 8  (hereinafter  the  ‘CCP  Recovery  and 

Resolution  Regulation’).  In  particular,  the  draft  law  implements  the  requirement  under  the  CCP 

Recovery  and  Resolution  Regulation  that  each  Member  State  must  designate  one  or  more 

resolution authorities for central counterparties9, which are empowered to apply the resolution tools 

and exercise the resolution powers as set out in the CCP Recovery and Resolution Regulation. 

5  
6  
7    

8  

9  

Available on the ECB’s Banking supervision website at www.bankingsupervision.europa.eu. 
See paragraph 2.2 of Opinion CON/2022/32. All ECB Opinions are available on Eur-Lex. 

The Law of 22 February 1998 establishing the organic status of the National Bank of Belgium “Loi du 22 février 1998 
fixant  le statut organique  de  la Banque  Nationale de  Belgique /  Wet van  22  februari  1998  tot vatstelling  van  het 
organiek statuut van de Nationale Bank van België » as published in the annexes to the Belgian Official Gazette, 
(Moniteur Belge/Belgisch Staatsblad,) 28 March 1998, page 9377. 
Regulation  (EU)  2021/23  of  the  European  Parliament  and  of  the  Council  of  16  December  2020  and  amending 
Regulations (EU) No 1095/2010, (EU) No 648/2012, (EU) No 600/2014, (EU) No 806/2014 and (EU) No 2015/2365 
and Directives 2002/47/EC, 2004/25/EC, 2007/36/EC, 2014/59/EU and 2017/1132/EU (OJ L 22, 22.1.2021, p. 1). 

See Article 3 of Regulation (EU) 2021/23. 

3 

 
 
ECB-PUBLIC 

2.1.2  The draft law appoints the NBB as resolution authority for the purposes of the CCP Recovery and 

Resolution  Regulation.  The  NBB  is  to  exercise  these  functions  via  the  resolution  college.  This 

resolution  college  already  exists  and  exercises  resolution  powers  vis-à-vis  other  financial 

intermediaries, such as credit institutions and stockbroking firms. The explanatory memorandum of 

the draft law specifies that the resolution college is to act as a separate body from the other existing 

bodies of the NBB, in order to distinguish the NBB’s supervisory tasks from its resolution tasks and 

to avoid potential conflicts of interest10. 

2.1.3  The draft law specifies that the operating costs borne by the NBB as resolution authority will be 

covered by the central counterparties on the basis of modalities determined in a Royal Decree. 

2.2  

Observations on the designation of the NBB as resolution authority for central counterparties 

2.2.1 

In accordance with Article 14.4 of the Statute of the European System of Central Banks and of the 

European Central Bank, the national central banks (NCBs) may perform functions other than those 

specified in that Statute, unless the Governing Council finds that those functions interfere with the 

objectives and tasks of the European System of Central Banks (ESCB). Where a Member State 

assigns such a function to its NCB, that NCB is responsible and liable for the performance of that 

function. Nevertheless, when defining the responsibility and liability of an NCB in relation to that 

function, Member States are required to comply with their obligations deriving from Union law and, 

in particular, Article 123(1) and Article 130 of the TFEU11. 

2.2.2  Article 123(1) of the TFEU prohibits the NCBs from granting overdraft facilities or any other type of 

credit  facility  to  public  authorities  and  bodies  of  the  Member  States.  Article  1(1)(b)  of  Council 

Regulation No 3603/9312 defines the term ‘other type of credit facility’ for the purposes of Article 

123 of the TFEU as , amongst others, any financing of the public sector’s obligations vis-à-vis third 

parties. Accordingly, the NCB concerned must not assume obligations vis-a vis third parties that 

could potentially be incumbent on the public sector. Consequently, the NCB concerned must not 

finance pre-existing obligations vis-à-vis third parties that are incumbent on other public authorities 

or bodies and the effective financing of the obligations vis-à-vis third parties by the NCB concerned 

must not result directly from the measures adopted by, or from the policy choices made by, other 

public authorities or bodies 13. 

2.2.3  The ECB notes that while the draft law does not as such impose any financing obligations on the 

NBB, the designation of the NBB as resolution authority for central counterparties according to the 

CCP Recovery and Resolution Regulation requires that the conditions under which the NBB is to 

exercise this function are in line with the above limitations deriving from Article 123(1) of the TFEU. 

In particular, the liability of the NBB when exercising the function of resolution authority for central 

counterparties must be limited to infringements of a serious nature of the rules imposed on the NBB 

in that context14. The draft law does not provide for a specific liability regime. In this respect, the 

10  
11   
12   

13   
14  

See comments on articles 6 and 7 of the Explanatory Memorandum. 
See judgment of 13 September 2022, Banka Slovenije, C-45/21, EU:C:2022:670, paragraphs 53, 54, 57 and 97. 

Council  Regulation  (EC)  No  3603/93  of  13  December  1993  specifying  definitions  for  the  application  of  the 
prohibitions referred to in ex-Articles 104 and 104b(1)  (OJ L 332, 31.12.1993, p. 1). 
See judgment of 13 September 2022, Banka Slovenije, C-45/21, EU:C:2022:670, paragraphs 67 to 75 and 84. 

See judgment of 13 September 2022, Banka Slovenije, C-45/21, EU:C:2022:670, paragraph 75. 

4 

 
ECB-PUBLIC 

ECB understands that the applicable liability regime is the regime that already exists in relation to 

the resolution  and supervisory tasks of the NBB. That liability regime provides for liability of the 

NBB  only  in  the  cases  of  gross  negligence  or  fraud  and  specifies  that  the  existence  of  gross 

negligence must be assessed taking into account the specific circumstances of the case at hand, 

including the urgency faced by the NBB and staff, financial market practices, the complexity of the 

specific case, threats to savings protection, and the risk of harm to the national economy 15. These 

limitations  address  the  requirement  that  the  liability  of  the  NBB  when  exercising  the  function  of 

resolution authority for central counterparties be limited to infringements of a serious nature.  

2.2.4  Article 130 of the TFEU prohibits Member States from placing their NCBs in a situation which in 

any way undermines their ability to carry out independently a task falling within the scope of the 

ESCB16. This would be the case if, for example, an NCB were precluded from building up adequate 

financial resources in the form of reserves or buffers to offset losses, particularly those resulting 

from monetary policy operations, and the Member State concerned did not ensure in advance that 

the NCB had the necessary funds to bear the financial burden resulting from exercising a function 

outside the scope of the ESCB (such as the funds necessary to be able to pay the compensation 

resulting from the liability regime for that function), while retaining its ability to carry out its ESCB 

tasks effectively and independently 17. An NCB constrained in its ability to create and/or restore its 

reserves  or  buffers  may  need  to  seek  the  consent  of  political  authorities  to  obtain  funding  or 

recapitalisation. This places the NCB in a situation of dependence on those political authorities of 

the Member State18.The ECB considers that the NBB’s risk of exposure to liability in the context of 

the exercise of  its function as resolution authority for  central counterparties is  extremely remote 

due  to:  (a)  the  fact  that  no  central  counterparty  is  currently  established  in  Belgium;  (b)  the 

exceptional  nature  of  a  situation  leading  to  the  resolution  of  a  central  counterparty;  and  (c)  the 

limited liability of the NBB in such cases. However, the possibility cannot be entirely excluded that 

extreme and exceptional situations might arise at some point in the future and result in the exposure 

of the NBB to such liability. In this respect, a significant amount of the financial risk of the Union 

financial system is processed by and concentrated in central counterparties on behalf of clearing 

members and their clients 19.The possibility cannot be entirely excluded that the NBB’s exercise of 

its function as a resolution authority of central counterparties might lead to substantial losses and 

that the magnitude of such losses might constrain the NBB’s ability to build up adequate financial 

resources to carry out its ESCB tasks. To address such situations, if central counterparties would 

be established in Belgium, adequate mechanisms should be considered in advance of any future 

establishment of a central counterparty in Belgium in order to ensure that the NBB is not precluded 

from building up adequate financial resources in the form of reserves or buffers so as to be able to 

carry out its ESCB tasks effectively and independently. 

15  
16   
17  
18   
19    

See Articles 12bis and 12ter of the Organic Law of the NBB. 

See judgment of 13 September 2022, Banka Slovenije, C-45/21, EU:C:2022:670, paragraph 97. 
See judgment of 13 September 2022, Banka Slovenije, C-45/21, EU:C:2022:670, paragraph 105. 
See judgment of 13 September 2022, Banka Slovenije, C-45/21, EU:C:2022:670, paragraphs 100 to 102. 
See Recital 4 of the CCP Recovery and Resolution Regulation. 

5 

 
ECB-PUBLIC 

3. 

Amendment  of  Belgian  law  to  implement  Union  legislation  on  a  pan-European  pension 

product 

3.1  

Purpose of the draft law’s provisions amending Belgian law to implement Union legislation on a   

pan-European personal pension product 

3.1.1  The  draft  law  implements  specific  provisions  of  Regulation  (EU)  2019/38  of  the  European 

Parliament  and  of  the  Council 20  (hereinafter  the  ‘PEPP  Regulation’).  In  accordance  with  the 

provisions of the PEPP Regulation21, the draft law appoints the FSMA as the competent authority 

to monitor compliance with the PEPP Regulation in Belgium. The draft law specifies that the FSMA 

exercises its function with the assent of the NBB, and that this assent relates to compliance with 

the PEPP Regulation to the extent that it falls within the scope of the NBB’s or ECB's prudential 

supervisory  powers  pursuant  to  the  Organic  Law  of  the  NBB  and  the  framework  of  the  SSM 

Regulation,  respectively.  It  appears  from  the  explanatory  memorandum  that  such  assent  of  the 

NBB  is  required  in  two  situations.  First,  if  the  relevant  supplier  or  distributor  of  a  pan-European 

pension product (PEPP) is under the supervision of the ECB or the NBB, the FSMA acts only after 

receiving the assent of the NBB. Second, such prior assent of the NBB before the FSMA acts is 

also required if the relevant supplier or distributor of a PEPP is under the supervision of the FSMA, 

but certain conditions that apply are within the competence of the NBB or the ECB. This refers, for 

example,  to  the  situation  where  the  relevant  supplier  or  distributor  under  the  supervision  of  the 

FSMA requires a guarantee from a credit institution. The draft law also specifies that the FSMA 

must require the assent of the NBB before accepting a registration request from an entity under the 

supervision  of  the  NBB  or  the  ECB.  In  that  case,  the  assent  relates  to  the  conformity  of  the 

registration request with the PEPP Regulation to the extent that it falls within the scope of the NBB’s 

or  the  ECB's  prudential  supervisory  powers  pursuant  to  the  Organic  Law  of  the  NBB  and  the 

framework of the SSM Regulation, respectively. 

3.1.2  The NBB may also request the FSMA to prohibit an entity from commercialising a PEPP if certain 

conditions set out in the PEPP Regulation 22 are met (for example, if the distributor has made false 

declarations) or if there are reasonable grounds to determine that the PEPP presents a risk for the 

stability of all or part of the financial system. 

3.2 

Observations on the draft law’s provisions amending Belgian law to implement Union legislation on 

a pan-European pension product 

3.2.1  The  draft  law  should  clarify  the  reasons  for  the  provisions  that  the  FSMA’s  supervision  of 

compliance with the PEPP Regulation is exercised on the basis of assent by the NBB, in particular 

to the extent that such assent is intended to relate to aspects lying within the ECB’s competence 

as prudential supervisor. The link between supervising compliance with the PEPP Regulation and 

the  ECB’s  supervisory  competences  in  the  prudential  field  does  not  appear  evident  and  assent 

should only be required insofar as the prudential supervisor’s tasks are directly affected. 

20  

21  
22  

Regulation  (EU)  2019/38  of  the  European  Parliament  and  of  the  Council  of  20  June  2019  on  a  pan-European 
Personal Pension Product (OJ L 198, 25.7.2019, p. 1). 
See Article 2(18) of the PEPP Regulation. 

See Article 8 of the PEPP Regulation. 

6 

 
3.2.2  As  a  general  remark  in  this  respect,  the  ECB  notes  that  the  draft  law  contains  certain 

inconsistencies in that it refers in some places to both the ECB and the NBB, and in other places 

ECB-PUBLIC 

only to the NBB23. 

This opinion will be published on EUR-Lex.  

Done at Frankfurt am Main, 27 June 2023. 

[signed] 

The President of the ECB 

Christine LAGARDE 

23  

For example, new article 37 nonies, § 3 and 4 inserted by Article 22 of the draft law refer to the assent only to the 
NBB. This is also the case in § 5 of this new article 37 nonies. 

7