Press Release: Free movement of capital: Commission refers Austria to Court for investment restrictions on certain types of banks

The European Commission decided on 19 October 2004 to refer Austria to the European Court of Justice because of restrictions on investment of banks' liquidity reserves in the savings and co-operative bank sector. The Commission considered that a provision of the Austrian Banking Law - stipulating that local banks ('Primärbanken') in that sector, which are affiliated to a common central institution ('Zentralinstitut') must hold a part of their liquidity reserve with the latter - constituted a disproportionate and unjustified restriction on the free movement of capital.