EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 7 December 2012  
on certain conditions on granting loans 
(CON/2012/102) 
 
Introduction and legal basis 
On 9 October 2012, the European Central Ba nk (ECB) received a request from Banca Na ţională a 
României (BNR) for an opinion on a draft regulation on certain conditions on granting loans (hereinafter the ‘draft regulation’). 
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 sixth indent  of Article 2(1) of Council Decision 98/415/EC of 
29 June 1998 on the consultation of the European Ce ntral Bank by national authorities regarding draft 
legislative provisions
1, as the draft regulation relates to rules app licable to financial institutions insofar as 
they materially influence the stability of financial institutions and markets. 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 regulation 
1.1 The main purpose of the draft regulation is  to ensure the implementation of some sections
2 of 
Recommendation ESRB/2011/1 of the European Systemic Risk Board of 21 September 2011 on lending in foreign currencies
3. To this end, it amends a nd supplements BNR Regulation 
No 24/2011 on granting loans to individuals4, which provides requirements in relation to lending to 
individuals in a foreign currency, and the cred itworthiness of a borrower and its capacity to 
withstand adverse shocks due to  exchange and interest rate movements. In respect of BNR 
Regulation No 24/2011, the ECB has previously issued Opinion CON/2011/74 on lending to natural persons
5. The draft regulation also clarifies some of the existing provisions. The draft 
regulation is scheduled to enter into force on 1 January 2013, when BNR Regulation No 24/2011 will be repealed. 
                                                 
1  OJ L 189, 3.7.1998, p. 42. 
2  Sections A.1, B.2, B.3 and G. 
3  OJ C 342, 22.11.2011, p. 1. 
4  Monitorul Oficial al României , Part One, No 767, 31.10.2011. 
5  All ECB opinions are published on the ECB’s website at www.ecb.europa.eu. 
ECB-PUBLIC  
2 1.2 The main amendments in the draft regulation ai m to: (a) improve the current foreign currency risk 
awareness mechanisms so that they are aligned with Recommendation ESRB/2011/1, and (b) add 
requirements in relation to lending to non-financial entities in a foreign currency: 
(a)  creditors offering foreign currency loans mu st inform unhedged clients, both individuals and 
non-financial entities, applying for such loans about the negative effect on repayments of a 
severe depreciation of the national currency and, fo r loans with variable interest rates, about 
the negative effect of a severe depreciation of the national currency associated with an increase in interest rates; 
(b)  creditors must establish internal eligibility cr iteria for the granting of foreign currency loans. 
Such criteria must ensure that unhedged non-fina ncial entities would be eligible for foreign 
currency loans only if they demonstrate their re payment ability even in the event of a severe 
currency depreciation associated with  an increase in interest rates; 
(c)  creditors must ensure that conditions for the granting and guaranteeing of foreign currency 
loans to unhedged non-financial entities are stricter  than those applicable to the granting of 
similar products in the national currency; 
(d)  creditors that are Romanian legal persons  and conduct lending activities in another Member 
State, either through a branch or by the provision of services, must comply with the requirements for foreign currency lending to unhe dged clients in force in the Member State 
in which the branch is situated, or in which the services are provided. 
 2. General observations  2.1 The ECB welcomes the draft regulation, which is  aimed at promoting responsible lending by credit 
institutions, including in the area of forei gn currency lending, as well as enhancing market 
discipline. The ECB has assessed the draft regula tion also taking into account the documentation 
for the consultation procedure which resulted in Opinion CON/2011/74. The ECB reiterates the 
observations made in that opinion. 
2.2 The draft regulation only implements some  sections of Recommendation ESRB/2011/1. The ECB 
is of the view that implementation of all elements of Recommendation ESRB/2011/1 should be 
considered. 
2.3 The ECB notes in this regard that the assessmen t of the compliance of the draft regulation with 
Recommendation ESRB/2011/1 will be undertaken by  the European Systemic Risk Board.  
 
ECB-PUBLIC  
3 This opinion will be published on the ECB’s website.  
  Done at Frankfurt am Main, 7 December 2012. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI