REPUBLIC OF LITHUANIA LAW
AMENDING ARTICLE 8, 11, 27, 51, 55 AND ANNEX 2 OF THE LAW ON THE BANK OF LITHUANIA I-678 AND SUPPLEMENTING THE
LAW WITH CHAPTER SEVEN2 AND ARTICLE 521
18 September 2014 No XII-1097 Vilnius
Article 1. Amendment of Article 8
1. Article 8(1) shall be supplemented with point 10 as follows:
"10) conduct the policy that aims to contribute to the stability of the entire financial system protection, including strengthening the resilience of the financial system and the reduction of systemic risks in order to ensure sustainable financial sector's contribution to economic growth (hereinafter - macro-prudential policy)."
2. Article 8 shall be supplemented with paragraph 3 as follows:
"3. In carrying out its functions and pursuing its activities, the Bank of Lithuania shall participate in maintaining stability and soundness of the entire financial system and, within its remit, shall take all the necessary measures."
Article 2. Amendment of Article 11
1. Article 11(1) shall be supplemented with point 20 as follows:
"20) establish measures of macro-prudential policy;".
2. Article 11(1)(20) shall be renumbered as Article 11(1)(21) .
Article 3. Amendment of Article 27
Article 27(3) shall be amended and set forth to read as follows:
"3. Loans may also be secured by a state guarantee, or a surety or guarantee of a credit institution, also by concluding an agreement with a credit institution regarding financial collateral when transferring the right of ownership to the collateral."
Article 4. Supplementation of the Law with Chapter Seven2
The Law shall be supplemented with Chapter Seven2 as follows:
Article 471. Functions and rights of the Bank of Lithuania when conducting macro-prudential policy
1. The Bank of Lithuania shall conduct macro-prudential policy on its own initiative or with regard to the recommendations or warnings regarding systemic risk of the European Systemic Risk Board. In case the Bank of Lithuania does not take the recommendations of the European Systemic Risk Board into account, it must submit the reasons for that to the European Systemic Risk Board.
2. Measures of macro-prudential policy and their application procedure shall be established by the legislation of the Bank of Lithuania.
3. In conducting macro-prudential policy, the Bank of Lithuania shall:
1) identify, monitor and evaluate threat arising to the stability of the financial system of the country;
2) determine and announce strategy of the macro-prudential policy;
3) apply necessary macro-prudential policy measures established in the legislation;
4) establish selection methods of systemically important financial institutions on the state level;
5) without delay and to the extent necessary in order to ensure financial stability, announce about the adopted decisions, including the reasons thereof, unless it poses a threat to the financial stability and/or is related to confidential information.
4. In conducting macro-prudential policy, the Bank of Lithuania shall have the right to:
1) issue legal acts and recommendations for financial market participants;
2) upon request, receive information and data required for conducting macro-prudential policy from state institutions, financial market participants and other enterprises, institutions, organizations, including data on specific institutions, financial market participants and other enterprises, institutions, organizations and information indirectly related to the macro-prudential policy conducted by the Bank of Lithuania (information about the real estate market and other factors influencing activities of financial institutions);
3) apply macro-prudential policy measures for financial market participants in the cases and according to the procedure set forth in the legal acts of the Bank of Lithuania;
4) make public and non-public communications intended for specific persons on systemic risk.
Article 472. Protection of information received when carrying out macro-prudential policy
Information received by the Bank of Lithuania in conducting macroprudential policy shall be considered confidential, except for information which has already been publicly announced or made accessible or on the basis whereof data on specific persons cannot be directly or indirectly established. The confidential information obtained may be used solely for the performance of the functions specified by this Law and related to conducting macro-prudential policy and supervising financial market participants and may not be publicly announced, divulged or made otherwise accessible, except in the cases specified by laws.
Article 473. Payment of damages resulting from illegal activities of the Bank of Lithuania and staff of the Bank of Lithuania and compensation of expenses for the staff of the Bank of Lithuania related to the actions brought against them or claims lodged
Provisions of Article 45 of this Law shall apply mutatis mutandis to the payment of damage resulting from the illegal activities of the Bank of Lithuania or the staff of the Bank of Lithuania related to conducting macro-prudential policy and compensation of expenses related to the actions brought against the staff of the Bank of Lithuania or claims lodged related to conducting macro-prudential policy.
Article 474. Cooperation with other institutions in the area of macro-prudential policy
1. In conducting macro-prudential policy and before adopting a decision regarding application of measures of macro-prudential policy, the Bank of Lithuania shall have a right to consult with the Ministry of Finance of the Republic of Lithuania without prejudice to the respective powers of the Ministry of Finance and its own independence.
2. The Bank of Lithuania shall cooperate, exchange information and have the right to enter into agreements with the European Central Bank, the European Systemic Risk Board, institutions conducting macro-prudential policy in other states, and the financial market supervisory institutions, other institutions of the Republic of Lithuania, foreign states, the European Union and/or international institutions. The Bank of Lithuania shall inform the European Systemic Risk Board about the actions taken to address the issues of systemic risk at a national level. "
Article 5. Amendment of Article 51
Article 51 shall be amended and set forth to read as follows:
“Article 51. Annual report of the Bank of Lithuania
The Bank of Lithuania shall announce its annual report and issue it as a separate publication.The annual report shall provide information on basic tasks regarding monetary policy and their implementation, monetary policy operations, activities while supervising financial market, conducting macro-prudential policy and discharging other functions established by laws, as well as information on the national macroeconomic situation, such as analysis of the developments in the national economy and financial markets, and on the financial position of the Bank and the results of its activities.
Article 6. Supplementation of the Law with Article 521
The Law shall be supplemented with Article 521 as follows:
Article 521. Information provided by the Bank of Lithuania to the Seimas of the Republic of Lithuania on the issues of macro-prudential policy
1. Upon a reasoned request of the Seimas Committee on Budget and Finance, the Bank of Lithuania shall submit confidential information about warnings and/or recommendations issued when conducting macro-prudential policy. This information shall be submitted to the extent and in the way which would ensure the protection of confidential information.
2. The Chairperson of the Board of the Bank of Lithuania shall, once a year, and in case of a financial crisis on a more frequent basis, be invited to the hearings of the Seimas Committee on Budget and Finance regarding the macro-prudential policy conducted by the Bank of Lithuania.
3. Where appropriate, the Bank of Lithuania shall submit to the chair of the Seimas Committee on Budget and Finance proposals regarding improvement of laws and other legal acts regulating macro-prudential policy and comments and suggestions on preventive measures in order to reduce the risk of financial system on a macro level."
Article 7. Amendment of Article 55
Article 55 shall be amended and set forth to read as follows:
"Article 55. Announcement of information
The Bank of Lithuania shall at least once a month announce statistical and other information."
Article 8. Amendment of Annex 2 to the Law
Annex 2 shall be supplemented with paragraph 7 as follows:
"7. Recommendation of the European Systemic Risk Board of 22 December 2011 on the macro-prudential mandate of national authorities (OJ 2012 C 41, p. 1)."
I promulgate this Law passed by the Seimas of the Republic of Lithuania.
PRESIDENT OF THE REPUBLIC DALIA GRYBAUSKAITĖ