ANNUAL REPORT 2008 - Polymer Bank Notes of the World

Cypriot Law imposes restrictions with respectto certain economic activities and benefits,non-compliance with which provides a groundfor dismissal of the Governor of the CentralBank of Cyprus. Had the ECB been consulted, itwould have made significant critical commentsas to the compliance of these provisions withArticle 14.2 of the Statute of the ESCB.The ECB was not consulted by the Frenchauthorities on two amendments to the draftlaw on the modernisation of the economywhich further simplified the statute of theBanque de France by, inter alia, abolishing themonetary committee of its General Council andtransferring to the Governor responsibility fortransposing ECB guidelines. Although the ECBwould not have objected to these institutionalchanges, it should have been consulted since theprovisions relate to the Banque de France.The Dutch authorities failed to consult theECB on the Law amending the law on financialsupervision. The Law states that in exceptionalcircumstances, De Nederlandsche Bankand the Autoriteit Financiële Markten mayadopt temporary rules to foster the stabilityof the financial sector. In a letter to the DutchMinister of Finance, the ECB noted that thedraft legislation related to an NCB and rulesapplicable to financial institutions that materiallyinfluence the stability of financial institutionsand markets, and that the ECB should thereforehave been consulted.The ECB was not consulted by the Portugueseauthorities on three legal acts adopted in thecontext of the financial turmoil. One assigned tothe Banco de Portugal tasks such as assessingcredit institutions’ requests for an increase ofown funds and overseeing compliance withrecapitalisation plans. The other two legal actsprovided for the Portuguese state to stand asguarantor to the financing of credit institutionsregistered in Portugal, with the Banco dePortugal being one of the authorities responsiblefor reviewing financing requests and monitoringthe enforcement of such state guarantees.Since the adopted legislation relates to an NCBand lays down rules applicable to financialinstitutions that materially influence the stabilityof financial institutions and markets, the ECBshould have been consulted.The ECB was not consulted by the Romanianauthorities on draft legislative provisionstransposing Directive 2006/43/EC on statutoryaudits of annual accounts and consolidatedaccounts into Romanian law. Although thisconcerned the transposition of an EC Directive,the ECB should have been consulted sincethe provisions concerned Banca Naţională aRomâniei.6.3 ADMINISTRATION OF THE BORROWING ANDLENDING OPERATIONS OF THE EUROPEANCOMMUNITYIn accordance with Article 123(2) of the Treatyand Article 9 of Council Regulation (EC) No332/2002 of 18 February 2002, the ECB continuesto have responsibility for the administration ofthe borrowing and lending operations of theEuropean Community under the medium-termfinancial assistance mechanism. In 2008 theECB received a principal sum from creditorsvis-à-vis the Community and paid the loanamount to the borrower country (Hungary). Thetotal amount of outstanding Community lendingoperations with Hungary as at 31 December2008 was €2 billion (by comparison, there wereno outstanding balances at the end of 2007).6.4 EUROSYSTEM RESERVE MANAGEMENTSERVICESIn 2008 a comprehensive set of servicescontinued to be offered under the frameworkestablished in 2005 for the management ofEurosystem customers’ euro-denominatedreserve assets. The complete set of services –which is available to central banks, monetaryauthorities and government agencies locatedoutside the euro area, as well as to internationalorganisations – is offered under harmonisedterms and conditions in line with general market134 ECBAnnual Report2008