Draft Heads of
Central Bank (No2) Bi 6997
Chanter I - Introdudou Provisions
Short Title
Construction
3.
Commencement
4.
Interpretation
5.
Laying of Orders
Cha~terD - Eurooean
Svstem of Central Banks\Euromn Central Bank
General powers of the Bank
General Function and Duty of the Bank
Certain Particular Powers of the Bank
Removal of the Governor
Voting Righrs of Service Directors
Furnishing of information to the Bank
Minimum Reserves
Disclosure of information to the European Central Bank
Auditing of the Accounts of the Bank by the European Central Bank
General Fund
Monetary Unit of the State
Currency in.Which Contracts. etc. are Made
Provision of Legal Tender Notes
Functions and Duties of the Governor
Amendment of section 26 of the Act of 1997
Acts
Referred To
Central Bank Acts, 1942 to 1997
Investment Intermediaries Act, 1995
1995, No. 11
~ & kExchange Act, L995
1995,
No. 9
4
Central Bank (No 2) Act, 1997
Chapter I
Introductory Provisions
This Act may b e cited as the Central Bank (No 2) Act, 19%
.'
This Act and the Central Bank Acts 1942 to 1997 shall be wnsuued together as
one Act.
The provisions of this Act shall come into operatiqn on such day or days as may
be f i e d therefor by order or orders of the Minister, either generally or with
reference ul any particular purpose o r provision, and different days may be so
fixed for different purposes and different provisions of this Act.
(1)
In this Act -
"the Act of 1942" means the Central Bank Act, 1942;
"the Acr of 1971 " means rhc Central Bank Act, 1971:
"the Act of 1989' means the Central Bank Act, 1989;
"the Act of 1997" means the Central Bank Act. 1997
"the Bank" means the Central Bank of Ireland;
"the Minister" means the Minister for Finance.
In this Act, a reference to a Part or Chapter, section or Schedule is to a Part or
Chapter or section of or Schedule to this Act. unless it is indicated that a reference
to some other enactment is intended.
(3)
In this Act, a reference to a subsection or paragraph is to the subsection or
paragraph of the provision in which the reference occurs, unless it is indicated
chat a reference CO some other provision is intended.
In this Act, a reference to "the Treaty" means the Treaty on European
Union.
(5)
In [his Act, a reference to ''the Sratutz" means the Statute on the European S y s ~ ~ n
of Central Banks and of the European Central Bank as set out in Protocol (NO 3)
to S!RTreaty on European CJnion.
Every regulation and order made under this Act shall be laid before each House of
the Oireachtas as s&n as may be after it,is made and, if a resolution annulling the
regulation or order is passed by either such House within the next 21 days on
which that House has sat after the regulation or order is laid before it, the
regulation or order shall be annulled accordingly, but without prejudice to the
validity of anything previously done thereunder.
Chapter D[
European System of Cexttral Banks\European Central Bank
I ~ e r new
t
Section SA in Central Bank Act, 1942.
"(SA) (1) It shall .be lawful for the Bank to perform any function or duty or
exercise any power required by or under the provisions of the Treaty on
European Union and the Statute of the European System of Central Banks
and of the European Central Bank as set out in Protocol (No3) to that
Treaty.
(2) The Bank shall have regard to the provisions of the Treaty and the
S m t e when exercising any power or performing any function or duty
referred to in this section. " .
7.
Section 6 of the Act of 1942 is hereby replaced by the following new section:
"6 - (1) The primary objective of the Bank shall be to maintain price stability in
the interests of the welfare of the people as a whole.
(2) The Bank's other objectives shall be CO contribute to the stability of rhe
financial system, to promote [he smooth operation of payment and settlement
systems and to discharge such other functions. powers and duties as are entrusted
to it by law.
(3) In addition to and without prejudice to the functions, powers. and duries vesred
by law in the Commission immediately before rhe appointed day, the Bank shall
have the general function and duty of taking (within the limit of the powers for the
time being vested in it by law and, where appropriate, having regard to the
provisions of the Treaty on European Union and the Statute of the European
System of Central Banks and of [he European Central Bank as set our in Protocol
(No3) to that Treaty) such steps as the Board may from time to rime deem
appropriate and advisable rowards the discharge of such functions, powers and
dudes as are entrusted to it by law.
(4) The Minister may, on such occasions as he shall think proper. requesr the
Governor on behalf of the Board or the Board to consult with him in regard to the
execution and performance by the Bank of the general function and duty imposed
on the Bank by the foregoing subsection of this section and the Board shall comply
with every such request.
(5) Notwithstanding the provisions of subsection (4) of this section and subject to
the requirements of the Treaty, the Statute, the Cenual Bank Acts 1942-1997. t h ~ s
Act md any orher enactment the Minister may, on such occasions as he shall think
proper, request the Governor on behalf of the Board or the Board to inform him in
regard CO che pursuit of the primary objective imposed on the Bank by subsection
( 1 ) of this section and the Board shall comply with every such request.".
8
Section 7 of the Act of 1942 (as amended by Section 21 of the Act of 1997) is
hereby amended by the insertion after paragraph (n) of the following two new
paragraphs:
transfer assets, income or liabilities to the European Central Bank where
required to under the Statute.
"(0)
(p) exercise any power or perform any task or duty conferred on it by or under the
Treaty or the Statute. " .
9-
Section 21(2) of the Act of 1942 is hereby amended:
(1) in line 2 by the substitution of the words "on stated grounds of serious
misconduct" for the words "for cause srated" ,
(2) in line 4 by the insertion after the word "office"of the following:
"for such stated grounds. Such removal shall take immediate effect from
the date of publication of the decision or of its notification to the
Governor", and
(3) by rhe insertion of the following new subsection after subsection (2):
"(3) Any decision, taken in accordance with subsection (2) of this section,
to remove a Governor may be subject to referral to the Court of Justice in
such a manner and for such reasons as are consistent with Article 14.2 of
the Statute."
10.
Section 32 of the Act of 1942 is hereby amended by the insertion, after subsection
(4). of the following new subsection;
" ( 5 ) No service Director shall vote on a resolution relating to the
performance by the Bank of any function or duty or the exercise of any
power required by or under the provisions of the Treaty or the Statute. ".
Section 18 of the Act of 1971 (inserted by section 37 of the Act of 1989) is hereby
amended:
(1) in line 1 by the insertion after the words "holder of a licence" of the words
any reporting agent designated by the European Central Bank".
",
(2) by the insertion of the words "(or in the case of a reporring agent as aforesaid,
the Bank or the European Central Bank)" after the word 'Bank' in the following:
line 1 of subsection (l)(i),
line 5 of subsection (l)(i),
Line 1 of subsection (l)(ii), and
line6ofsubsection(l)(ii).
(a)
(b)
(c)
(d)
(3) by the insertion of the words "or the activities of such reporring agent as
aforesaid" after the word 'relates' in the following:
line 3 of subsection (l)(i), and
line 4 of subsection (l)(ii).
(4) by rhe insertion in each or' subsections (l)(;) and (l)(ii). after [he words
'statutory functions' of the following:
"(or, in the case of a reporting agent as aforesaid, which the European
Central Bank considers it necessary to have for the due performance of its
powers. tasks and duries by or under the Treaty and by or under the Statute
or which rhe Bank considers ic necessary to have for the due performance
of its smtutory functions)." .
Section 23 of the Act of 1971 (as amended and inserted respectively by sections 40
and 41 of the Act of 1989) may be applied by the Bank m institutions in the State
specified under Article 19.1 of the Statute in pursuance of a requirement or
direction by the European Centrat Bank.
'
Section 16 (as amended by section 50 of the Stock Exchange ACL, 1995, by section
49 of the lnvescmenr Intermediaries Act, 1995 and by secrion 52 of the Act of
1997) of the Act of 1989 is hereby amended by:
(1) the substitution of subsection (l)(b) with the following subsection:
.
"
"(b) che Bank's activities in respect of the pursuit of its objecrives as sec
out in section 6 of the Central Bank Act. 1942 (as amended by section 7 of
this ~ c t. ).
"
(2) the insertion in subsection (2)(t), after the words 'European Monetary
Institute'. of the following:
9
or to the European Central Bank",
(3) the insertion in subsection (2)(ii)(II), after the word 'Bank', of the following:
"or the European Central Bank", and
(4) the substitution of subsection 2(ii)(11t) with the following subsection:
"(M)the Bank's pursuit of its objectives as set out in Section 6 of the
Central Bank Act, 1942 (as amended by section 7 of this Act). ".
14.
Notwithstanding section 19 of the Act of 1989, the accouncs of the Bank may be
audited in accordance with Article 27 of the Statute and the Bank shall provide
any auditors appointed in accordance with that Article, with full information,
books and records.
15.
Section 23 of [he Act of 1989, is hereby amended by the insertion, after subsection
(4) of the following new subsections:
"(5)
Any claims on or liabilities to the European Central Bank shall be treated
as assets or liabilities of the general fund or such other fund as may be
established by order of the Minister for that purpose.
Regulacioils under subsection (2) may provide for any matcer arising from
the implementation of Chapters VI. V111 and 1X of the Statuce.
In exercising the powers conferred on him by subsections (2) and (4). the
Minister shall pay due regard to the powers. tasks and duties conferred on
the Bank by or under the Treaty and the Statute.".
The following section is hereby substitured for Section 24 of the Central Bank Act,
1989:
"24(1) The currency of che State shall be the euro. The currency unir shall be
one euro. One euro shall be divided into one hundred cent.
(2) The Irish pound shall be a national currency unit subdivision of the euro
according to the conversion race, subject to the provisions of the Council
Regulation on the incroductlon of thi euro which will be adopted under Arricle
lO9l(4), third sentence. of the Treaty on European Union.
0
"7*
(3) Notes and coins denominated in euro shall be legal tender in the State in
accordance with the Council Regulation on the introduction of the euro which will
be adopted under Arricle 1091(4), third sentence, of the Treaty on Europeali
Union.
(4) Notes and coins denominated in the Irish pound (or multiples or subdivisions
thereof) which were legal tender on the day before 1 January 1999 shall continue
to be legal tender in the State in the same manner as before until a date to be
l
".
specified by ~ i n i s k r i a order.
Section 25 of the Central Bank Act, 1989 is hereby amended by inserting a new
sub-section (2) as ~follows:
Prior to the putting into circulation of notes and coins denominated in euro
in accordance with the Council Regulation on the introduction of the euro
which will be adopted under Article l O91(4), third sentence, of the Treaty
on European Union, sub-section (1) will apply where payment in legal
render is required. " .
"(2)
Section 118 of the Central Bank Act, 1989 is amended by
(i) the insertion of the words "Subject to the provisions of Section 24(4) of the
Central Bank Act, 1989, (as inserced by Head 16)" in the following:
(a) before the word "it" at the beginning of sub-section (1)
(b) after [he word "amount" at the end of sub-section (3)
(ii) the substitution of the words "Minister lia made an order under subsection
(4)" by the words "European Cenrral Bank has authorised the issue in accordance
with Article 105a of the Treaty o n European Union" in sub-section (1).
(iii) the deletion of the word "monelary" in line 4 of subsection (1).
(iv) the deletion of the words "in respect" in lines 4 and 5 of subsection (1).
the insertion of the words "and notes issued by the European Central Bank in
accordance with Article 105a of the Treaty on European Union" after the word
"notes" in line 6 of sub-section (1).
(V)
(vi) the deletion of subsection (4).
(vii) the substitution of the phrase ""prescribed" means prescribed by the Bank
with the sanction of the Minister" by the following:
e
"prescribed" means in the case of notes prescribed before the
commencement of this section prescribed by the Bank with the sanction of
the Minister and in all other cases prescribed by the Bank with the sanction
of the European Central Bank"
11
19.
Section 24 of the Act of 1997' is hereby amended:
(1) in line 27 by the insertion after the words "24.
- " of the following:
" Subject m the requirements of the Treaty and of the Statute,'. and
(2) in line 32 by the substitution of the words
1997, this Act and any other enactmenc. " .
"
to 1989, and this Act. " with " to
Section 26 of the Act of 1997 is hereby replaced by the following new section:
"26.- Section 19 of the Act of 1942 is hereby a.~-~~nded:
(a) by fhe substitution of the following paragraph for paragraph (b) of
subsection (4):
'(b) he shall, during his term of office, be ineligible for election as
a director of any credic institution, financial institution, or insurance
undertaking: " :
(b) by the substitution of the following subsection for subsecrion (5):
"(5) I n this section and in section 20:
'credit institution' means an undertaking whose business it is to
receive deposits or other repayable funds from the public and to
grant credic on its own account but does not include the European
Monetary Institute or the European Central Bank.;
'financial institution' means an undertaking other than a credit
institution providing any one or more of the financial services set
out in the Schedule to the European Communities (Licensing and
Supervision of Credit Insritutions) Regulations, 1992 (S. I. No. 395
of 1992);
'insurance undertaking' has the meaning assigned to it by the
Insurance Act, 1989." .".