ECB wants clear rules on operation of HFSF

The European Central Bank wants a clearer definition of decision-making responsibilities at Greece’s bank rescue fund, it said on Tuesday in reference to legislation Athens adopted last month to strengthen the agency’s governance.

Greece’s international creditors – which include the ECB alongside the European Commission and the International Monetary Fund – want to ensure the Hellenic Financial Stability Fund (HFSF) is well-run and independent given the 50 billion euros of financing it is handling to restore the banking system’s solvency.

In an opinion on the law, the ECB welcomed the addition of two independent members to the HFSF’s five-member board and amendments ensuring it is governed by private law but said the roles of its two governing bodies should be made clearer.

“The ECB considers that although the provisions improve to some extent the HFSF’s operation, they do not contribute substantially to enhancing the independent and effective fulfillment of the HFSF’s mandate,” it said.

Specifically, the ECB took issue with the rescue fund’s seven-member supervisory body having “significant decision-making” powers on proposals from the fund’s three-member executive board.