ECB Opines on Abolition of Special Levy on Certain Banks in Slovakia
ECB published an opinion (CON/2020/28) in response to 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. 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. In its opinion, ECB welcomed 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.
The draft law stipulates that 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. The explanatory memorandum to the draft law states that the intention is to use these assets to fund the activities of the Slovak Development Fund, which will focus on supporting and financing development programs of the Slovak Government. A smaller part of the funds 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.
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 the 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. Law No 384/2011 imposes an obligation on banks and branches of foreign banks operating in Slovakia 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 January 01, 2021 and repeals Law No 384/2011.
Related Link: Opinion (PDF)
Keywords: Europe, Slovakia, Banking, Resolution Framework, Special Levy, Opinion, Resolution Fund, Deposit Protection, ECB
Previous Article
EBA Publishes Opinion on Consideration of ML/TF Risks in SREPRelated Articles
EBA Publishes Final Regulatory Standards on STS Securitizations
The European Banking Authority (EBA) published the final draft regulatory technical standards specifying and, where relevant, calibrating the minimum performance-related triggers for simple.
ECB Further Reviews Costs and Benefits Associated with IReF
The European Central Bank (ECB) is undertaking the integrated reporting framework (IReF) project to integrate statistical requirements for banks into a standardized reporting framework that would be applicable across the euro area and adopted by authorities in other EU member states.
EBA Publishes Funding Plans Report, Receives EMAS Certification
The European Banking Authority (EBA) has been awarded the top European Standard for its environmental performance under the European Eco-Management and Audit Scheme (EMAS).
MAS Launches SaaS Solution to Simplify Listed Entity ESG Disclosures
The Monetary Authority of Singapore (MAS) set out the Financial Services Industry Transformation Map 2025 and, in collaboration with the SGX Group, launched ESGenome.
BCBS to Finalize Crypto Rules by End-2022; US to Propose Basel 3 Rules
The Basel Committee on Banking Supervision met, shortly after a gathering of the Group of Central Bank Governors and Heads of Supervision (GHOS), the oversight body of BCBS.
IOSCO Welcomes Work on Sustainability-Related Corporate Reporting
The International Organization of Securities Commissions (IOSCO) welcomed the work of the international audit and assurance standard setters—the International Auditing and Assurance Standards Board (IAASB)
BoE Allows One-Day Delay in Statistical Data Submissions by Banks
The Bank of England (BoE) published a Statistical Notice (2022/18), which informs that due to the Bank Holiday granted for Her Majesty Queen Elizabeth II’s State Funeral on Monday September 19, 2022.
ACPR Amends Reporting Module Timelines Under EBA Framework 3.2
The French Prudential Control and Resolution Authority (ACPR) announced that the European Banking Authority (EBA) has updated its filing rules and the implementation dates for certain modules of the EBA reporting framework 3.2.
ECB Paper Discusses Disclosure of Climate Risks by Credit Agencies
The European Central Bank (ECB) published a paper that examines how credit rating agencies accepted by the Eurosystem, as part of the Eurosystem Credit Assessment Framework (ECAF)
APRA to Modernize Prudential Architecture, Reduces Liquidity Facility
The Australian Prudential Regulation Authority (APRA) announced reduction in the aggregate Committed Liquidity Facility (CLF) for authorized deposit-taking entities to ~USD 33 billion on September 01, 2022.
