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European Central Bank Provides Guidance on Slovak Draft Law

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The European Central Bank (ECB) has provided an opinion on a draft law submitted to the Slovak government. The ECB’s guidance aims to address potential implications of the draft law on the National Bank of Slovakia’s (NBS) financial situation and its compliance with monetary financing rules.

Financial Risks

The ECB has identified several key points regarding the potential financial risks associated with the draft law:

  • Liability for NBS: The ECB suggests that NBS may face additional financial risks in case of legal action related to its powers under the draft law. However, these risks are considered not substantial.
  • Financing Framework: The ECB believes that the current financing framework for NBS should be sufficient to cover the costs associated with the new task.

Monetary Financing Considerations

The ECB emphasizes the importance of ensuring compliance with the monetary financing prohibition:

  • Remuneration for NBS: To achieve this, NBS needs to be fully and adequately remunerated when carrying out its task in relation to the register under the draft law.
  • Compliance with Monetary Financing Rules: The ECB highlights the need to ensure that NBS complies with monetary financing rules.

Reporting Obligations

The ECB welcomes the exclusion of certain accounts from the scope of reporting to the register:

  • Exclusion of Accounts: They suggest including examples mentioned in the explanatory memorandum to enhance clarity.
  • Secure Transmission and Storage of Data: NBS is required to take adequate security measures to ensure the secure transmission and storage of data transmitted to the register.

The ECB’s opinion provides guidance on the potential implications of the draft law on NBS’s financial situation and its compliance with monetary financing rules.