EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 13 September 2013 
on amendments to the Central Bank of Malta Act 
(CON/2013/69) 
 
Introduction and legal basis On 14 August 2013, the European Central Bank (ECB)  received a request from the Central Bank of Malta 
(hereinafter ‘CBM’) for an opinion on draft amendments to the Central Bank of Malta Act
1 (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 the third and sixth indent of Article 2(1) of Council Decision 
98/415/EC of 29 June 1998 on the consultation of  the European Central Bank by national authorities 
regarding draft legislative provisions2, as the draft law concerns the CBM. In accordance with the first 
sentence of Article 17.5 of the Rules of Procedure of the European Central Bank, the Governing Council 
has adopted this opinion. 
 1.  Purpose of the draft law  
The draft law introduces additional am endments to the Central Bank of Malta Act in order to cater for 
further legal developments with regard to the previous  version of the draft legislation, on which the ECB 
commented in Opinion CON/2011/43
3. The draft law proposes adding a ne w paragraph (d) in Article 5(1) 
in order to clarify that the CBM has been given the macro-prudential policy mandate, as well as a new 
Article 17B to establish a Joint Financial Stability Bo ard (JFSB) to ensure effective cooperation between 
the CBM and the Malta Financial Services Authority  (MFSA), which is the competent authority as 
regards banking supervision. A new Article 8(3) also  provides for the appointment of a second Deputy 
Governor. 
 2. Clarification of the macro-prudential policy mandate 2.1 Article 5(1)(d) of the draft law provides the CBM , as the sole macro-prudential authority, with the 
macro-prudential policy powers set out in the new Article 17A of the draft law, notwithstanding the 
fact that this task is currently assumed under Ar ticle 5(1)(c) of the Central Bank of Malta Act, 
                                                 
1  Cap 204 of the Laws of Malta. 
2  OJ L 189, 3.7.1998, p. 42. 
3  All ECB opinions are published on th e ECB’s website at www.ecb.europa.eu. 
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2 which provides that the Bank is entrusted with the function of ensuring the stability of the financial 
system. 
2.2 The ECB supports the design of effective m acro-prudential policy frameworks within Member 
States, in line with the guiding principles set out in Recommendation ESRB/2011/3 of the European Systemic Risk Board of 22 December  2011 on the macro-prudential mandate of national 
authorities
4. Moreover, the ECB considers that the ECB and national central banks (NCBs) should 
play a leading role in macro-prudential oversight , given their expertise and existing responsibilities 
in the area of financial stability5.  
2.3 At the same time, while the CBM’s performance of macro-prudential tasks should be operational 
and financially independent6, it should not affect: (a) the CBM’s functional and financial 
independence; or (b) the European System of Central Banks’ performance of its tasks under the 
Treaty and the Statute of the European System of Central Banks and of the European Central Bank 
(hereinafter the ‘Statute of the ESCB’)7. The ECB also understands that current provisions of the 
Central Bank of Malta Act, which ensure the CBM’s independence in implementing its objectives 
and performing all its tasks and activities, will al so cover the formulation and implementation of 
macro-prudential policy. 
2.4 For the benefit of its macro-prudential oversight  tasks, the CBM should be authorised to require 
and obtain in a timely fashion all data and information collected from reporting entities, such as all financial corporations and other entities which ha ve the information at their disposal, including 
information other than that currently collected  for other purposes, such as statistical purposes
8. In 
this regard, the ECB welcomes the amendment to Article 23 of the Central Bank of Malta Act, 
which gives the CBM the general power to collect in formation related to statistics in respect of the 
CBM’s macro-prudential mandate. The new Article 17A(2) provides the CBM, in its capacity as 
the single macro-prudential authority, with a mandate to cooperate with the ESRB and, where necessary, with other Member States’ macro-prudentia l authorities, in particular with regard to the 
exchange of information required to ensu re effective macro-prudential oversight. 
2.5 This opinion does not prejudice the conclusi ons of the ESRB’s follow-up assessment of the 
abovementioned recommendations, which will be issu ed pursuant to Article 17 of Regulation (EU) 
No 1092/2010 of the European Parliament and of  the Council of 24 November 2010 on European 
Union macro-prudential oversight of the financia l system and establishing a European Systemic 
Risk Board
9. 
                                                 
4  OJ C 41, 14.2.2012, p. 1. 
5  See, for example, paragraph 5.1 of  Opinion CON/2012/44, paragraph 3.1 of Opinion CON/2012/55 and paragraph 2.1 of 
Opinion CON/2013/30. 
6  See recommendation E of Recommendation ESRB 2011/3. 
7  See paragraph 4 of Opinion CON/2009/ 88, paragraph 3.2 of Opinion CON/ 2012/55 and paragraph 2.3 of Opinion 
CON/2013/30. 
8  See recommendation C of ESRB Recommendation 2011/3. 
9  Regulation (EU) No 1092/2010; OJ L 331, 15.12.2010, p. 1. 
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3  
3.  Joint Financial Stability Board 3.1 The ECB welcomes the CBM’s decision to establish the JFSB in the Central Bank of Malta Act by 
virtue of Article 17B of the draft law and cons iders that this will enhance the CBM’s role as a 
national macro-prudential authority. The ECB unders tands that the JFSB mainly serves as a forum 
for cooperation between the CBM and the MFSA  on issues which, though falling within the 
separate competences of the CBM and MFSA, may u ltimately affect financial stability generally. 
The ECB also understands that the new Article 17B  will not shift any executive powers relating to 
macro-prudential policy to the JFSB, and that the in sertion of Article 17B(1) will further clarify the 
JFSB’s status as a body intended to assist the two institutions in the performance of their regulatory 
tasks by facilitating cooperation between them. 
3.2 On a related note, the amendments provide for two types of macro-prudential instrument. The new 
Article 17A covers the first type addressing macr o-prudential issues, referring to directives issued 
by the CBM and addressed to commercial banks, in  order to implement macro-prudential policy 
and instruments. The second refers to instrume nts addressing financial stability matters generally 
and macro-prudential issues specifically, and comprises the JFSB’s recommendations, advice or assessments addressed to public authorities or publ ic institutions. The ECB understands that the 
CBM is the sole competent authority to issue m acro-prudential instruments, primarily concerning 
the banking sector
10, while the JFSB, as a forum for cooperation, may make recommendations to 
the CBM Governor on macro-prudential instru ments and may further advise other public 
authorities or institutions on financial stability issues. 
3.3 The ECB also welcomes Article 17B(4), which provides that the JFSB’s functions should be 
performed without prejudice to the Treaty and th e Statute of the ESCB and any legal acts issued 
thereunder, ensuring that the JFSB’s activities must also take account of the ECB’s macro-prudential supervisory powers in the cont ext of the single supervisory mechanism. 
 4. Appointment of a second Deputy Governor 4.1 The ECB welcomes Article 8(3), which provides for the appointment of a second Deputy 
Governor, who will be responsible  for the financial stability mandate. A number of NCBs already 
employ this arrangement, based on an allocation of  tasks. The ECB agrees that having two Deputy 
Governors, one responsible for the monetary polic y mandate and the other for the financial stability 
mandate, will improve the streamlining and e ffective division of responsibilities at senior 
management level within the CBM. 
4.2  A Member State’s relevant authorities have the duty to take necessary measures to ensure the 
timely appointment of a successor if a member’s position on one of its NCB’s decision-making bodies becomes vacant. In this regard, the ECB welc omes the amendment to Article 8(3)(b), which 
                                                 
10  See Article 17A of the draft law. 
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4 reflects the need for the smooth and continuous functioning of the CBM’s decision-making bodies. 
By virtue of this provision, a De puty Governor may be temporarily appointed by the Board to carry 
out the duties of a Governor in case of a vacancy. However, the appointment of a new Governor under the provisions of Article 8 should take place as soon as possible. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 13 September 2013. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI