Opinion of the European Central Bank of 2 September 2025 on the independence of the members of the Governing Council of Българска народна банка (Bulgarian National Bank) (CON/2025/27)

EN ,

OPINION OF THE EUROPEAN CENTRAL BANK of 2 September 2025 on the independence of the members of the Governing Council of Българска народна банка (Bulgarian National Bank) (CON/2025/27) Introduction and legal basis

On 4 August 2025 the European Central Bank (ECB) received a request from Българска народна банка (Bulgarian National Bank (BNB)), acting on behalf of the Bulgarian Ministry for Finance, for an opinion on a draft law amending the Law on credit institutions and other laws (hereinafter the ‘draft law’). The ECB’s competence to deliver an opinion is based on Articles 127(4) and 282(5) of the Treaty on the Functioning of the European Union and Article 2(1), third indent, of Council Decision 98/415/EC , as the draft laws relate to BNB and the specific tasks conferred upon the ECB concerning the prudential supervision of credit institutions pursuant to Article 127(6) of the Treaty. In accordance with Article 17.5, first sentence, of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this opinion.

1. Purpose of the draft law

1.1 The main purpose of the draft law is to transpose into Bulgarian law the amendments to Directive 2013/36/EU of the European Parliament and of the Council introduced by Directive (EU) 2024/1619 of the European Parliament and of the Council (hereinafter the ‘CRD6’). In particular, several provisions of the draft law seek to transpose Article 4a of Directive 2013/36/EU, which relates to the supervisory independence of competent authorities and the prevention of conflicts of interest in relation to the officials and employees of such authorities. 1.2 The draft law provides that in exercising the supervisory powers of BNB, the members of the Governing Council of BNB, other than the Governor, and BNB employees act independently and objectively and are not allowed to request or accept instructions from any banks or from any Union

authorities, the Council of Ministers, governments of other Member States, or from other authorities and institutions . 1.3 The draft law provides that the Deputy Governor or any other member of the Governing Council of BNB cannot be elected or appointed, as the case may be, as a member of the Governing Council if, during the term of office for which they would have been elected or appointed, the performance of their duties as a member of the Governing Council would exceed 14 years, taking into account all previous terms of office . This rule applies to members of the Governing Council, with the exception of the Governor, elected or appointed after 11 January 2026, and, when calculating the term, terms of offices prior to 11 January 2026 are not counted . 1.4 The draft law provides that in the event of early discharge of a member of the Governing Council of BNB , the decision of the Governing Council is published on BNB’s website, unless a written objection to such publication is submitted by the member of the Governing Council concerned . 1.5 The draft law provides that members of the Governing Council of BNB and BNB employees are not allowed to trade in financial instruments issued by or referred to banks licensed in the territory of the Republic of Bulgaria and the direct or indirect parent companies, subsidiaries, or affiliates of such banks, subject to several exceptions . 1.6 The draft law provides that members of the Governing Council of BNB and BNB employees whose functions are directly related to the purposes of supervision or decision-making are subject to coolingoff periods – referred to in the draft law as ‘suspension periods’ – upon the termination of their employment with BNB . In particular, they must not enter into employment contracts, consultancy contracts, or management or control contracts, or accept any type of contractual arrangement for the provision of professional services for a specified period of time with: (1) banks with which the employees or the members of the Governing Council have been directly involved for supervisory or decision-making purposes, including in the direct or indirect parent companies, subsidiaries, or affiliates of those banks, with subjects that provide services to such banks, unless the employees or members of the Governing Council are not allowed to participate in the provision of those services during the suspension period; and (2) subjects carrying out lobbying and advocacy activities directed at BNB on issues for which the employees or members of the Governing Council were responsible during their employment or term of office. The relevant BNB employees are determined by decision of the Governing Council of BNB. The duration of the suspension period with respect to entities under (1) is 12 months for members of the Governing Council and at least three months for BNB employees directly involved in the supervision of banks, with the specific suspension periods to be determined by the Governing Council of BNB. The duration of the suspension period with respect to entities under

(2) is three months. During the suspension period, the persons subject to the suspension do not have access to information considered official, banking, professional, commercial, or other legally protected secrets or information relating to the relevant entities. The persons subject to the suspension are entitled to compensation under the terms, in the manner, and in the amount determined by the Governing Council of BNB. 1.7 The draft law provides that members of the Governing Council of BNB and the relevant BNB employees must file a declaration of interests in which they declare information on their holdings of property, equity instruments, bonds, mutual funds, investment funds, mixed funds, hedge funds, and exchange-traded funds that may give rise to suspicions of a conflict of interest .

2. General observations

2.1 Article 130 of the Treaty and Article 7 of the Statute of the European System of Central Banks and of the European Central Bank (hereinafter the ‘Statute of the ESCB’) address the independence of central banks in the European System of Central Banks (ESCB) , stipulating that when exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB, neither the ECB, nor a national central bank (NCB), nor any member of their decisionmaking bodies, are to seek or take instructions from Union institutions, bodies, offices or agencies, from any government of a Member State or from any other body. This independence was thus entrusted to the ECB and BNB, as an NCB, by primary law . 2.2 Based on considerations of central bank independence, and in order to ensure the independence of NCBs such as BNB when exercising the powers and carrying out the tasks and duties conferred upon them by the Treaties and the Statute of the ESCB, the ECB has established an ethics framework. This includes the ECB’s Code of Conduct for high-level ECB officials (hereinafter the ‘Single Code’), which applies, among others, to the members of the Governing Council of the ECB when exercising their functions as members of a high-level ECB body, and Guideline (EU) [2021/2253] of the European Central Bank (ECB/2021/49) , which is addressed to the NCBs of the Eurosystem and establishes ethics requirements applicable to the members of the decision-making bodies and staff of the NCBs . The NCBs, as an integral part of the ESCB, must act in accordance with the guidelines of the ECB . 2.3 Hence, national legislation transposing the CRD6 into Bulgarian law is without prejudice to the ethics framework which the ECB has established in order to ensure the independence of the ECB and the NCBs when exercising the powers and carrying out the tasks and duties conferred upon them by the

Treaties and the Statute of the ESCB, as both frameworks have their own scope and legal basis . For the avoidance of doubt, the national legislator may wish to clarify this within the text of the draft law. 2.4 Furthermore, the draft law is intended to apply as of 2026, following Bulgaria’s adoption of the euro on 1 January 2026. Therefore, it should be mentioned that Article 19 of Council Regulation (EU) No 1024/2013 (hereinafter the ‘SSM Regulation’) stipulates that when carrying out the tasks conferred on it by the SSM Regulation, the ECB and the national competent authorities acting within the SSM must act independently. Article 31(3) of the SSM Regulation furthermore requires the ECB, in cooperation with the national competent authorities, to: (a) establish and maintain comprehensive and formal procedures including ethics procedures and proportionate periods to assess in advance and prevent possible conflicts of interest resulting from subsequent employment within two years of members of the Supervisory Board; and (b) provide for appropriate disclosures. Those procedures are without prejudice to the application of stricter national rules . The legal basis for these provisions of the SSM Regulation is Article 127(6) of the Treaty. 2.5 In view of this independence and these requirements of the SSM Regulation, the ECB has established an ethics framework to ensure the independence of national competent authorities, such as BNB, when assisting the ECB in carrying out the tasks conferred on it by the SSM Regulation. This ethics framework includes the Single Code, which applies, among others, to the members of the Supervisory Board of the ECB when exercising their functions as members of a high-level ECB body, and Guideline (EU) 2021/2256 of the European Central Bank (ECB/2021/50) , which is addressed to the national competent authorities of the SSM and establishes ethics requirements applicable to the members of their bodies and the members of staff of the national competent authorities. In view of the responsibility of the ECB for the effective and consistent functioning of the SSM , the national competent authorities must comply with Guideline (EU) 2021/2256 (ECB/2021/50) . 2.6 In contrast to the ethics framework, which is ultimately based on Article 127(6) of the Treaty, the CRD6, including its provision on the supervisory independence of competent authorities , is based on Article 53(1) of the Treaty. A legal act based on this provision cannot alter the rights and obligations of the ECB and the national competent authorities when carrying out the tasks conferred on them by the SSM Regulation based on Article 127(6) of the Treaty. It follows from settled case-law of the Court of Justice of the European Union that the different legal bases, namely Article 53(1) and Article 127(6) of the Treaty, cannot be combined as the legal basis for a legal act, in view of the different

procedures involved. In particular, the measures adopted under Article 53(1) of the Treaty are adopted by the European Parliament and the Council, acting in accordance with the ordinary legislative procedure, and after consulting the Economic and Social Committee (and, if relevant, the ECB in accordance with Articles 127(4) and 282(5) of the Treaty). By contrast, the regulations adopted under Article 127(6) of the Treaty are adopted by the Council alone, in a special legislative procedure in which the Council acts unanimously, after consulting the European Parliament and the ECB . 2.7 Hence, the amendments made by the CRD6 are without prejudice to the ethics framework which the ECB has established to ensure the independence of the national competent authorities in the context of the SSM, as both frameworks have their own scope and legal basis. The Union legislator acknowledged this through the CRD6’s amendments to Directive 2013/36/EU, which provide that Article 4a(2) of Directive 2013/36/EU is without prejudice to the rights and obligations of the national competent authorities pursuant to the SSM established by the SSM Regulation . For the avoidance of doubt, the national legislator may wish to clarify this within the text of the draft law. From an ECB perspective, the provisions from the CRD6 may nevertheless serve as guidance for establishing safeguards for the independence of the ECB and the national competent authorities when carrying out the tasks conferred on them by the SSM Regulation .

3. Specific observations

3.1 The draft law proposes to limit the maximum term of office of members of the Governing Council of BNB, other than the Governor, to 14 years, whereas currently they may be appointed to unlimited consecutive six-year terms . In this context, the ECB highlights that in accordance with Article 14.2 of the Statute of the ESCB, statutes of NCBs must provide for a minimum term of office of five years for a Governor. This does not preclude longer terms of office. Applying the rules regarding the term of office of Governors to other members of the decision-making bodies of NCBs involved in the performance of ESCB-related tasks also safeguards the personal independence of those persons . The application of the same rules regarding the term of office to both Governors and members of decision-making bodies is particularly pertinent where a Governor is ‘first among equals’ alongside other members who have equivalent voting rights, or where other members are involved in the performance of ESCB-related tasks , as is the case in BNB. 3.2 As noted in paragraph 1.3, according to the draft law, the Deputy Governor or any other member of the Governing Council of BNB, other than the Governor, cannot be elected or appointed, as the case may be, as a member of the Governing Council if, during the term of office for which they would have been elected or appointed, the performance of their duties as a member of the Governing Council

would exceed 14 years, taking into account all previous terms of office. Since this provision is about the election and appointment process, it does not interfere with the security of tenure of an elected and appointed candidate. Against this background, the ECB considers that the relevant provisions of the Law on BNB are consistent with the requirements of Article 14.2 of the Statute of the ESCB. 3.3 The CRD6 provides that Member States must ensure that members of a competent authority’s governance body can be dismissed if they no longer meet the criteria of appointment or have been convicted of a serious criminal offence . Under the Law on BNB, the Governor, the Deputy Governors and the other members of the Governing Council can only be dismissed prior to the expiration of their term of office if they no longer fulfil the conditions required for the performance of their duties or if they have been found guilty of serious misconduct within the meaning of Article 14.2, of the Statute of the ESCB . Against this background, the ECB understands that the current provisions of the Law on BNB regulating the appointment and dismissal of members of the Governing Council of BNB are consistent with the principles of the CRD6 and that, therefore, it is not necessary for the draft law to include any provisions in this respect. Furthermore, the ECB understands that the draft law only supplements the Law on BNB by adding new provisions concerning the public disclosure of grounds for dismissal that transpose the amendments to that effect made by the CRD6 to Directive 2013/36/EU . 3.4 In this context, the ECB highlights that, pursuant to Article 14.2, second paragraph, first sentence, of the Statute of the ESCB, ‘a Governor may be relieved from office only if he no longer fulfils the conditions required for the performance of his duties or if he has been guilty of serious misconduct’. Applying the same rules regarding the grounds for relieving Governors from office to other members of the decision-making bodies of NCBs involved in the performance of ESCB-related tasks also safeguards the personal independence of those persons . The application of the same rules regarding dismissal to both Governors and members of decision-making bodies is particularly pertinent where a Governor is ‘first among equals’ with other members who have equivalent voting rights, or where other members are involved in the performance of ESCB-related tasks , as is the case in BNB. The ECB considers that the relevant provisions of the Law on BNB are consistent with the requirements of Article 14.2 of the Statute of the ESCB. 3.5 The maximum 12-month suspension period applicable to the members of the Governing Council of BNB under the draft law is less restrictive than the requirements of the Single Code. The ECB highlights that the draft law should be without prejudice to the Single Code, as it may be amended

from time to time, and must not prevent the possibility of imposing and extending a cooling-off period of a maximum of two years when such an extended period is applied based on the Single Code . 3.6 In addition, the Single Code sets limits on the establishment of post-employment relationships, not only directly with significant or less significant credit institutions, but also with ‘other financial institutions’ or ‘any entity engaged in lobbying in relation to the ECB, or consultancy and/or advocacy for the ECB or for any [supervised] institution’ . In this regard, the draft law covers these three categories . In any event, the ECB notes further that the draft law must be interpreted without prejudice to the Single Code, as it may be amended from time to time . 3.7 The prohibition on the trading by members of the Governing Council of BNB and BNB employees of 45 46 certain financial instruments is less restrictive than the requirements of the Eurosystem and SSM Ethics Frameworks which the ECB has established and the requirements of the Single Code insofar as it limits the prohibition to financial instruments issued by, or referring to, banks licensed exclusively in the territory of the Republic of Bulgaria and the direct or indirect parent companies, subsidiaries, or 48 49 affiliates of such banks , and does not extend to other regulated entities . The ECB highlights that the draft law should be without prejudice to the Eurosystem and SSM Ethics Frameworks which the ECB has established and to the Single Code, as it may be amended from time to time, and must not prevent the possibility of extending such prohibition to financial instruments issued by regulated entities to members of the Governing Council of BNB and BNB employees.

This opinion will be published on EUR-Lex.

Done at Frankfurt am Main, 2 September 2025.

[signed]

The President of the ECB

Christine LAGARDE