Front Matter

Front Matter

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International Monetary Fund
Published Date:
August 2003
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    CENTRAL BANKING

    LEGISLATION Volume II: Europe

    This book is a sequel to Mr. Hans Aufricht’s earlier collection of Central Bank, Monetary and Banking Laws, which was published by the International Monetary Fund in 1961 under the title of Central Banking Legislation.

    The first volume, setting out the central banking, monetary and banking laws of the United Kingdom and a representative selection of twenty countries outside Europe, has established itself as a standard work of reference in its field. As such, it has proved valuable not only to the work of the Fund but also to scholars, bankers, technicians and legislators throughout the world.

    In this second volume, Mr. Aufricht presents similar material for seventeen countries in Europe, an area where many of the techniques that are now universally used in regulating or controlling the supply of money and credit were developed. Although the general features of the central banking regimes of the major European countries are well known, there has been a need for a work which provides, in English, a reliable and up-to-date inventory of the legal and institutional framework within which European central banks operate. The present volume has been designed to meet this need.

    From the Preface Pierre-Paul Schweitzer

    Erratum

    Central Banking Legislation

    Volume II: Europe

    Page 834, Art. 104: For Banks may grant read Banks may not grant

    CENTRAL BANKING LEGISLATION

    Volume II: Europe

    International Monetary Fund Monograph Series

    No. 1. Central Banking Legislation: A Collection of Central Bank, Monetary and Banking Laws, selected and annotated by Hans Aufricht (1961)

    No. 2. The Fund Agreement in the Courts, by Joseph Gold (1962)

    No. 3. International Monetary Problems, 1957–1963, by Per Jacobsson (1964)

    No. 4. Central Banking Legislation: A Collection of Central Bank, Monetary and Banking Laws; Volume II, Europe, selected and annotated by Hans Aufricht (1967)

    CENTRAL BANKING LEGISLATION

    A collection of Central Bank, Monetary and Banking Laws

    Volume II: Europe

    Statutes and related materials selected and annotated by

    HANS AUFRICHT

    With the assistance of

    Jane B. Evensen

    Preface by Pierre-Paul Schweitzer

    1967

    INTERNATIONAL MONETARY FUND

    washington, d.c.

    PREFACE

    This book is a sequel to Mr. Hans Aufricht’s earlier collection of Central Bank, Monetary and Banking Laws, which was published by the International Monetary Fund in 1961 under the title of Central Banking Legislation.

    The first volume, setting out the central banking, monetary and banking laws of the United Kingdom and a representative selection of twenty countries outside Europe, has established itself as a standard work of reference in its field. As such, it has proved valuable not only to the work of the Fund but also to scholars, bankers, technicians and legislators throughout the world.

    In this second volume, Mr. Aufricht presents similar material for seventeen countries in Europe, an area where many of the techniques that are now universally used in regulating or controlling the supply of money and credit were developed. Although the general features of the central banking regimes of the major European countries are well known, there has been a need for a work which provides, in English, a reliable and up-to-date inventory of the legal and institutional framework within which European central banks operate. The present volume has been designed to meet this need.

    Mr. Aufricht, who has been a member of the Legal Department of the Fund since 1947, is due to retire from the Fund staff this year. The present volume, into which he has put his long experience in international and comparative law and several years of diligent research, is an appropriate culmination to a long and devoted career in the public service.

    January 1967

    Pierre-Paul Schweitzer

    Managing Director

    International Monetary Fund

    Table of Contents

    INTRODUCTION

    I

    This volume contains the basic domestic laws that govern the central bank, banking, and monetary regimes of sixteen European members of the International Monetary Fund and Switzerland. Following the plan of the first volume (which was published by the Fund in 1961), the material for each country has been arranged in four main groups: central bank law, banking law, monetary law, and legislation pertaining to the Bretton Woods Agreements. In addition, a Bibliographical Note is supplied for each country.

    In this volume, all laws and related measures have been consolidated; and, unless otherwise expressly indicated, the version in force on July 31, 1966 is given. Moreover, an effort has been made to employ a uniform terminology and style in the translations, so as to facilitate comparative analyses.

    The cooperation and assistance given by officers of the central banks represented in this volume are most gratefully acknowledged. It should be added that, even where the consolidated text was available in Washington, or could be prepared on the basis of official sources, it was indeed reassuring to be able to dispel any doubts as to its accuracy or meaning and to receive prompt and informative replies to inquiries. Some officers, after having been advised of the project, were good enough to keep the Fund currently informed of changes that took place subsequent to the initial inquiry.

    II

    The complete text of the basic central bank law of each country is given, as well as the by-laws of the central bank where they supplement major provisions of the basic law, and subsidiary legislation where pertinent.

    General banking laws are in most instances presented in summary form, accompanied by the text of individual articles or sections that have an important bearing on the relationship between the central bank and other banks, or that contain provisions which one would ordinarily expect to find in the central bank law.

    For some countries the banking law is published in its entirety: for example, Greece, where the provisions in force are brief; France, where consolidated and up-to-date versions of the two laws are not readily available; and Spain and Yugoslavia, where the laws deal in some detail with recent banking reforms.

    Basic monetary laws are included for those countries where such laws provide for one or more of the following: (1) designation of the basic monetary unit of the country; (2) definition of the monetary unit in terms of gold and/or a previous monetary unit; (3) conferring of legal-tender status on specified means of payment and determination of the extent to which coins are acceptable for the settlement of public or private debts; (4) specification of the denominations, metallic content, design, and other characteristics of coins. For certain countries only subsidiary monetary laws are included—for example, those providing for the issue of fiduciary coins. Usually, provisions on the legal-tender status and other characteristics of bank notes are contained in the basic central bank law; this does not, however, preclude supplementary rules from being incorporated in the monetary law (for example, Belgium, Arts. 7-10 of the Organic Law of the National Bank, 1939, and Arts. 3-5 of the Monetary Law, 1957).

    Since December 27, 1945, when the Articles of Agreement of the International Monetary Fund (the Fund Agreement) entered into force, the legal definition of the monetary unit in terms of gold or foreign currency has been a matter of international concern. Each member of the Fund is expected, in agreement with the Fund, to define the par value of its currency in accordance with Article IV, Section 1 (a), of the Fund Agreement; that is, the member is to express the parity price of its monetary unit in terms of a specified quantity of gold or in terms of the U.S. dollar of the weight and fineness in effect on July 1, 1944. In addition to this rule of Article IV concerning the expression of par values, the Fund Agreement contains rules on the determination of initial par values (Article XX, Section 4 (a)-(g)) and on changes in par values (Article IV, Sections 5-7); corresponding provisions on par values are contained in the Membership Resolutions of the Board of Governors relating to the admission of other than original members.

    Information on the par values of the currencies of the Fund members covered in this volume will be found in the Notes on Monetary Units and occasionally in footnote annotations.

    It should be noted that there has developed by legislative usage a practice in some countries, notably in Europe, under which the basic legal provisions relating to central bank, banking, and monetary matters are incorporated in three separate sets of laws. The boundaries between these legislative areas are not always clearcut, and there are no generally binding rules to guide a legislator in this field. Nevertheless, when a country’s legal tradition dates back several decades—or even centuries—it is likely that the historical demarcations will be observed even for new legislation, because most of the new laws are, in effect, amendments to or replacements of earlier laws. Thus, where the right of note issue was originally conferred on a bank of issue by means of a special charter or law, the central bank law now takes the place of that special charter or law. Similarly, in many European countries the right to mint and issue coins has traditionally been a prerogative of the Crown, and the mint has been retained as a government agency separate and distinct from the central bank, so that special laws—sometimes called for by the Constitution—have had to be adopted to regulate the coinage. By contrast, in several countries outside Europe, especially where a new central bank regime has been established after 1945, the central bank law contains monetary law provisions (for example, the Philippines, Act No. 265 of 1948—see the first volume of Central Banking Legislation, pp. 531-570); in others, central bank and monetary as well as banking law provisions are combined in one law (for example, Burma, the Union Bank of Burma Act, 1952, and Ceylon, the Monetary Law Act, No. 58 of 1949—see pp. 261-283 and 287-327 of the first volume).

    The initial legislation pertaining to membership in the International Monetary Fund and the International Bank for Reconstruction and Development (the so-called Bretton Woods institutions) is given for countries where legislation was necessary for membership. For other countries, a note on the legal processes involved in joining the Fund has been supplied. Information on their quotas in the Fund is given for all Fund members.

    A Bibliographical Note at the end of each country section lists the publications of the central bank, monographs and articles on banking, central banking and currency, collections of laws, and citations of legislation supplementing or subsidiary to the basic laws in the volume.

    III

    This collection focuses on the basic domestic laws governing central banking, general banking, and money. A complete view of the law in these fields can be had, however, only by looking at the subsidiary domestic laws and related measures as well, including rules issued by the central bank under the authority of its organic law—such as its own by-laws and general rules on credit controls—and rules issued by the central bank under the authority of special laws giving it the power to act in a particular field—foreign exchange control, for example. In addition, there are laws with a more general application; these include the relevant provisions of constitutional law, administrative law, the civil code, company law, and negotiable instruments law. Although in principle such legislation is outside the scope of this volume, selected constitutional provisions and credit control measures have been included in some instances. Other subsidiary domestic measures are, where appropriate, referred to in the footnote annotations to individual laws or cited in the Bibliographical Notes.

    Of the seventeen countries whose central bank laws are assembled in this volume, only Austria, Denmark, the Netherlands, and Switzerland had adopted credit control measures in the form of so-called credit control agreements by July 1966. These agreements with the commercial banks, concluded by the central bank or by the Ministry of Finance in consultation with the central bank, are cited in the Bibliographical Notes.

    Since fourteen of the seventeen countries covered in this volume are parties to the Geneva Conventions providing a Uniform Law for Bills of Exchange and Promissory Notes (1930) and a Uniform Law for Checks (1931), information on the status of these Conventions as of December 31, 1965 has been supplied in Appendix V. In addition, the principal domestic laws in this field are cited in the Bibliographical Notes. The reader is referred to Schettler and Büeler, Das Wechsel- und Scheckrecht aller Länder (Cologne, 1957—, loose-leaf), which contains the negotiable instruments laws of these and other countries in the language of the country and in German.

    IV

    While the primary purpose of this book is to present legislation as currently in force, some historical data have also been supplied. In addition to the Notes that preface the texts of the central bank laws and the Notes on Monetary Units, historical material is given in the Bibliographical Notes. Also, Appendix IV on the League of Nations Collection of Monetary and Central Bank Laws (1932) has been included on the assumption that it will be of interest for the study of the legal and institutional history of European central bank, banking, and monetary regimes.

    V

    The first three of the eight Appendices to this volume, designed to facilitate comparison of the structures of European central banks, give information on the head office, branches and agencies, ownership, and principal organs. Appendix II also includes some historical information on the capital structure of the central banks and indicates the date on which the right of private persons to acquire or hold shares of the capital was limited or terminated.

    Appendices IV and V, on the League of Nations Collection and the Geneva Conventions, are described above.

    The documents constituting the International Monetary Fund’s General Arrangements to Borrow are reproduced in Appendix VI. Under the terms of these arrangements, which became effective for a four-year period on October 24, 1962, ten major industrial members of the Fund have undertaken to lend their currencies to the Fund, if this should be necessary to forestall or cope with an impairment of the international monetary system. These arrangements, which have been extended for another four years to October 1970, complement in several respects inter-central-banking cooperative arrangements that have done much in the past to strengthen the working of the international monetary system. Four of the participants are continental European members of the Fund (Belgium, France, Italy, and the Netherlands) and two are European central banks (the Deutsche Bundesbank and the Sveriges Riksbank); the other four participants are Canada, Japan, the United Kingdom, and the United States.

    Appendix VII describes briefly the special economic relationship between Luxembourg and Belgium and the principal legal arrangements on which this relationship is based.

    Appendix VIII deals with the principal legal links between Andorra, Liechtenstein, Monaco, San Marino, and Vatican City, and the neighboring countries whose currencies are legal-tender in the territories of these five political entities.

    * * * *

    It is hoped that the central bank, banking, and monetary laws consolidated in this volume and presented with a uniform terminology and style will not only facilitate studies and comparisons of these particular regimes, but will also help to promote a wider and more thorough understanding of central banking in general.

    January 1967

    H.A.

    CENTRAL BANKING LEGISLATION

    Volume II: Europe

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