EN ECB -PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 28 June  2016  
on credit agreements for consumers relating to residential immovable property  
(CON/2016/ 34) 
 
Introduction and legal basis  
On 31 May 2016 the European Central Bank (ECB) received a request from  the Greek  Ministry of 
Finance for an opinion on a draft law on the implementation of Directive 2014/17/EU of the European 
Parliament and of the Council1 (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 indent of Article  2(1) of Council Decision 98/415/EC2, as 
the draft law relates to the Bank of Greece. 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  
1.1. The purpose of the draft law is to implement Directive 2014/17/EU into Greek law, with a view to 
address ing problems uncovered by the financial cr isis in the area of credit agreements  for 
consumers relating to residential immovable property . The draft law aims at developing a more 
transparent  and efficient  market in this  area which contributes to financial stability and provides a 
higher level of co nsumer protection, taking into account that much of the debt held by consumers 
within the Union is concentrated in credits related to residential immovable property . 
1.2. The draft law designates the Bank of Greece as the competent authority responsible for ensuring  
the application and enforcement of certain requirements applicable to creditors and credit 
intermediaries  when providing credit to consumers , and for the adoption of secondary legislation 
further specifying these requirements . The requirements t o be monitored by the Bank of Greece 
include  the following:  (a) business conduct obligations ; (b) knowledge and competence 
requirements ; (c) minimum standards for the provision of advisor y services to consumers ; (d) 
requirements concerning the use of tying and bundling practices ; (e) requirements on the  provision 
of general information and adequate explanations  to consumers on credit agreements ; (f) the 
calculation of the annual percentage rate of charge (APRC) ; and (g) the assessment of consumers’  
creditworthiness . The draft law also imposes obligations on creditors in relation to payment default 
                                                 
1  Directiv e 2014/17/EU of the European Parliament and the Council of 4 February 2014 on credit agreements for 
consumers relating to residential immovable property and amending Directives 2008/48/EC and 2013/36/EU and 
Regulation (EU) No 1093/2010 (OJ L 60, 28.2.2014,  p. 34).  
2  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions ( OJ L 189, 3.7.1998, p. 42) . 
ECB -PUBLIC  
2 by consumer s, such as exercising reasonable forbearance and making reasonable attempts to 
resolve the situation through alternative means before foreclosure procee dings are init iated .  
1.3 Furthermore, t he draft law designates the B ank of Greece as the competent authority for the 
licensing and supervision of credit intermediaries.  In particular , the B ank of Greece will be  
responsible for : (a) licensing credit interm ediaries ; (b)  ensuring that all licensed credit 
intermediaries comply with the professional requirements set out in the draft law ; (c) withdrawing 
the license of credit intermediaries ; (d) imposing sanctions in case of infringements ; and (e) 
carrying out notification procedures  which  allow licensed credit intermediaries to operate 
throughout the Union.  Finally , the draft law  stipulates  that the Ministry of Economy and 
Development  should cooperate with the  Bank of Greece and other relevant Greek authorities  with a 
view to educati ng consumers on responsible borrowing and debt management and provid ing clear 
information on the debt-granting process especially in respect of  consumers taking out mort gage 
credit for the first time.  
 
2. General observations  
2.1 This opinion does not address whether the draft law effectively implem ents Directive 2014/17/EU 
into Greek  law. The ECB will only assess those provisions of the draft law that may impact on the 
role and tasks of the Bank of Greece as a central bank, national  supervisory authority and member 
of the Eurosystem and the European System of Central Banks (ESCB).  
2.2 The draft law broadens the Bank of Greece’s  current supervisory functions by assigning to it 
responsibility for the supervision and regulation of the market for credit agreements relating to 
residential immovable property . To this end, t he draft law expands the categories of entities over 
which the B ank of Greece exercises prudential supervision to include credit intermediaries , which  
arrange credit by pr esent ing credit agreements to consumers or conclud ing such agreements on 
behalf of creditors. Furthermore, the draft law expands the supervisory functions of the B ank of 
Greece in order to ensure  proper  market conduct of  any natural or legal person grant ing credit 
relating to residential immovable property in the course of his trade,  business or profession.  
2.3 The ECB underlines that, in the context of a proposed conferral of new tasks on an ESCB member, 
it is necessary to assess whether such new tasks ar e in line with  the prohibition of monetary 
financing under  Article 123 of the Treaty. The ECB has developed the guidance set out in 
paragraphs  3.1 to 3.3 on the basis of which it may decide whether a new task conferred on a 
national central bank (NCB)  is to be considered a central banking task or a government task for the 
purposes of assessing such conferral of tasks against the prohibiti on of monetary financing3. 
 
3. Conferral of new tasks on national central banks  
3.1 General considerations  
                                                 
3  See, for example, paragraph 3.1 of Opinion CON/2015/21 paragraphs 2.2.1 to 2.2.3 of Opinion CON/2015/54 and 
paragraphs 2.2.1 to 2.2.3 of Opinion CON/2016/ 31. All ECB opinions are published on the ECB’s website at 
www.ecb.europa.eu.  
ECB -PUBLIC  
3 First, the sys tematic categorisation of tasks assigned to NCBs as central banking or government 
tasks applies to genuinely new tasks that did not exist in the past or did not form an integral part of 
the central banking tasks already assigned to the NCB in the past. In recognition of the different 
Member States’ legal frameworks, central banking traditions and national set -ups, the tasks 
currently discharged by an NCB as central banking tasks are not reviewed and re- categorised, but 
may be reassessed if their substance i s amended.  
Second, it needs to be emphasised that when Member States decide to confer new tasks on their 
NCBs, due regard must be given to the role of the NCB as part of the ESCB or Eurosystem, as 
applicable, and to the requirement of central bank independence. The principle of financial 
independence, which is a key aspect of the principle of central bank independence as laid down in 
Article 130 of the Treaty, requires that the Member States may not put their NCBs in a position 
where they have insufficient financial resources to carry out their ESCB - or Eurosystem -related 
tasks, as applicable. Accordingly, an NCB must have sufficient financial means not only to perform 
its ESCB - or Eurosystem -related tasks but also its national tasks (e.g. financing its admi nistration 
and own operations)4. Where an NCB considers that the allocation of a new task would impinge on 
its financial independence, because it would not have sufficient means to focus primarily on its ESCB-  or Eurosystem -related tasks, or that the discharge of the new task would impose a 
disproportionate burden on it, the NCB should be able to object to the new task being allocated to 
it.  
Third, central banking tasks comprise in particular those tasks that are related to the tasks listed in Article 127( 2), (5) and (6) of the Treaty.  
Fourth, new tasks conferred on an NCB which are atypical of NCBs’ tasks, or which are clearly 
discharged on behalf of and in the exclusive interest of the government or of other public entities, 
should be considered as government tasks.  
3.2 Specific considerations  
Consumer protection tasks related to financial services are central bank  tasks to the extent that 
these complement existing supervisory powers of a central bank and thus contribute to the 
soundness of the financial m arkets and the preservation of confidence in the marketplace.  
An important criterion for qualifying a new task as a government task is its impact on the 
institutional, financial and personal independence of the NCB. In particular, the following should be taken into account.  
First, it should be assessed whether the performance of the new task creates ( inadequately 
addressed)  conflicts of interest with existing central banking tasks, without necessarily 
complementing the NCB’s existing central banking tasks.  If a conflict of interest arises between 
existing and new tasks, there should be sufficient mitigation measures in place to adequately 
address that conflict. Complementarity between the new task and existing central banking tasks 
should not, however, be i nterpreted broadly, as this could lead to the creation of an indefinite chain 
of ancillary tasks. The assessment of the complementarity of the new task should also take into 
                                                 
4  See paragraph 2.2.3 of the ECB’s 2014 Convergence Report . 
ECB -PUBLIC  
4 account the financing of that task. In the event of a conflict of interest between  supervision and 
consumer protection, supervisory considerations must prevail5. 
Second,  it should be assessed whether without new financial resources the performance of the 
new task places a disproportionate burden on the financial or organisational capaci ty of the NCB 
and may negatively impact on its capacity to properly perform its existing central banking tasks.  
Third,  it should be assessed whether the performance of the new task is aligned with the 
institutional set -up of the NCB, in particular as regar ds central bank independence and 
accountability considerations.  
Fourth,  it should be assessed whether the performance of the new task entails substantial financial 
risks.  
Fifth, it should be assessed whether the performance of the new task exposes the members of the 
NCB’s decision -making bodies to political risks that are disproportionate and could also impact on 
their personal independence and, in particular, the guarantee of the Governor’s term of office under 
Article  14.2 of the Statute of the European S ystem of Central Banks and of the European Central 
Bank.  
3.3 The final assessment of the qualification of a task given to an NCB as either falling within the scope of a central banking task or a government task will be guided by the objective of ensuring t he 
consistent application of the prohibition of monetary financing within the Eurosystem and the 
ESCB.  
 
4. Specific observations  
4.1 Conferral  of new tasks  on the Bank of Greece  
In the light of the  guidance set out in paragraphs 3.1 to 3.3, it is further  asses sed whether the new 
tasks  that the draft law confers on the Bank of Greece could constitute a breach of the monetary 
financing prohibition.  
4.2 Principle of financial independence   
 The principle of financial independence requires NCBs to have sufficient m eans to carry out not 
only their ESCB -related tasks but also their national tasks, both from an operational and financial 
perspective
6. In this regard the ECB notes that  the draft law does not specify how the costs related 
to the supervision of credit intermediaries  by the Bank of Greece are to be financed. T he ECB 
therefore invites the consulting authority to consider establishing a cost recovery regime , which  
would requir e credit intermediaries  to pay to the Bank of Greece an authorisation  fee or an annua l 
fee to cover the actual costs incurred by the Bank of Greece in the performance of its supervisory 
tasks . 
4.3 Links to tasks listed in Article 127(5) of the Treaty  
The authorisation and supervision of credit intermediaries, as well as the oversight  and regulation 
of the market for credit agreements relating to residential immovable property , can be considered 
                                                 
5  See paragraph 3.1 of Opinion CON/2015/21.  
6  See paragraph 2.2.3 of ECB’s 2014 Convergence Report.  
ECB -PUBLIC  
5 as tasks related to those referred to in Article 127(5) of the Treaty, based on the understanding that 
they are complementary to the supervisory tasks exercised by an  NCB , particularly where, as in 
this case, the Bank of Greece already exercises tasks of a similar nature7. More specifically,  the 
ECB notes that t he Bank of Greece already supervises credit institutions  and other financing 
institutions,  such as  credit companies  grant ing consumer credit to natural  persons8, with a view to 
enhancing the stability and effectiveness of the credi t system and of the financial sector in 
general9. As part of this function, the Bank of Greece establishes and moni tors the application of 
requirements aimed at ensuring a proper  interaction between market participants and consumers 
with respect to the provision of credit , at the pre- contractual stage as well as  during the contractual 
relationshi p, including, for example, minimum disclosure requirements, and requirements  relating to 
complaints, property valuation and creditworthiness assessment s. Moreover, t he Bank of Greece is 
also entrusted with the adoption  and application of a code of conduct  for the handling of arr ears10. 
Finally, in its capacity as the national supervisory authority, the Bank of Greece acts under the 
auspices of the European Banking Authority  (EBA) . Directive 2014/17/EU favours the designation 
of authorities acting under the auspices of the EBA as the competent authorities responsible for the 
admission of credit intermediaries11. 
4.4 Atypical tasks 
A number of Member States have conferred on their NCBs supervisory tasks related to the 
provision of consumer credit12. The ECB has generally accepted the allocation of such tasks to 
NCBs provided they do not interfere with the performance of the NCB’s ESCB -related tasks13. The 
tasks of an NCB with regard to the supervision of credit intermediaries can therefore, if this condition is met, be regarded as tasks not atypical of a central bank, particularly if, as in the case of 
the Bank of  Greece,  it has a statutory responsibility for banking supervision
14.  
4.5  Discharge of tasks on behalf of and in the exclusive interest of the Government or of other public entities 
The draft law designates the Bank  of Greece as the sole  authority responsible for supervising credit 
intermediaries , in its own name and not on behalf of any other authority . Under the draft law the 
Bank of Greece is also the sole authority responsibl e for enforcement of the requirements 
applicable to creditors and credit intermediaries . The ECB notes that the draft law designates the 
Ministry of Economy as the authority responsible for the application of certain  provisions  of the draft 
                                                 
7  See, for example,  paragraph 3.3 of Opinion CON/2015/54,  paragraph 3.1.2 of Opinion  CON/2015/37,  paragraph 
3.1.2 of Opinion CON/2015/45 and paragraphs 3.2 and 3.3 of Opinion CON/2015/21.  
8  See Article 153 of Law 4261/2014 ‘Access to the activity of credit institutions and prudential supervision of credit 
institutions and investment firms (transposition of Directive 2013/36/EU), repeal of Law 3601/2007, and other 
provisions ’, FEK A 107/ 5.5.2014.  
9  See Article 55A of the Statute of the Bank of Greece.  
10   See Article 1(2)  of Law 4224/2013 ‘Government Council for Private Debt  Management, Institution for Growth in 
Greece, provisions on the Hellenic  Republic Asset Development Fund, and other urgent  provisions ’, FEK A 
228/31.12.2013.  
11  See recital 79 of Directive EU/2014/17.  
12  See paragraph 3.4 of Opinion CON/2015/54.  
13  See, for example, paragraphs 2.1 to 2.3 of Opinion CON/2006/38, paragraphs 2.1 and 2.2 of Opinion CON/2006/ 47, 
paragraphs 2.1 to 2.5 of Opinion CON/2007/29, and paragraph 2 of Opinion CON/2009/71.  
14  See Article 4 of Law 4261/2014.  
ECB -PUBLIC  
6 law, notably those relating to the advertis ement  and marketing of  credit agreements  and the 
provision of advisory services  by consumer associations . Responsibility for the financial education 
of consumers lies with the Ministry of Economy  and Development , which may cooperate with the 
Bank of Greece and other relevant authorities on related matters . In view of the above, it appears 
that the allocation of the responsibilities under the draft law is clear and t here is no indication that in 
carrying out its new tasks the Bank  of Greece would act exclusively in the interest of another public 
entity.   
4.6 Extent to which the performance of tasks is aligned with the Bank of  Greece ’s institutional set -up, in 
particular as regards accountability considerations  
Given the complementarity of the new tasks with the Bank of Greece’s  existing supervisory powers , 
in particular in the field of supervision of credit institutions  and other financi al institutions and 
oversight of the ir market conduct , the new tasks appear  to broadly fit into t he Bank of  Greece’ s 
institutional set -up.  
4.7 Extent to which the performance of tasks is proportionate to the Bank of Greece ’s financial and 
operational capacity and its ability to perform its ESCB -related tasks  
 As noted above, the draft law does not pr ovide for a regime for the recovery of costs related to the 
supervision of credit intermediaries. Directive  2014/17/EU  requires Member States to ensure that 
competent authorities  have  adequate resources for the efficient and effective performance of their 
duties15.However,  the draft law does not specify  the resources to be deployed by the Bank of 
Greece for the discharge of its new tasks , nor does it provide an estimate of the direct costs that 
the Bank of Greece is likely to incur in the  perform ance of  these tasks . The ECB notes that i t is 
important that appropriate resources are available to the Bank of Greece in order to ensure that it 
can properly perform its new  tasks , while maintaining, at all times, sufficient financial means to 
carry out its  ESCB-  or Eurosystem -related tasks  and other national tasks, meet its international 
obligations and properly cover its administrative and operational expenses . 
4.8 Extent to which the performance of tasks entails substantial financial risks and conflicts of interests 
with existing tasks  of the Bank of Greece  are addressed  
The draft law does not contain any specific provisions on liability for the performance of supervisory 
tasks. The Bank of  Greece ’s potential liability for the performance of its new tasks under the draf t 
law will be thus subject to the general  rules on the liability of the Bank of Greece. These general 
rules  provide that the governor, the deputy governors, all members of collective bodies and staff 
members of the Bank of Greece shall not be subject to  civil liability towards third parties for actions 
or omissions in the performance of their duties related to any competence exercised by the Bank of 
Greece in its capacity as a public authority other than for wilful misconduct16. As regards potential 
conflict s of interest between existing and new tasks of the Bank of Greece, the ECB notes that 
under the draft law  the Bank of Greece will be responsible for supervising conduct of creditors and 
credit intermediaries towards consumer s, including their policies in respect of  arrears and 
foreclosure. While these tasks seem to be broadly of the same nature as the supervisory tasks 
                                                 
15  See Article 5(1) of Directive EU/2014/17.  
16  See Ar ticle 62(4) of Law 4261/2014.  
ECB -PUBLIC  
7 already performed by the Bank of Greece, the ECB notes that conflict s of interest may arise. As the 
authority  responsible for supervising t he financial markets, the Bank of Greece will be required to 
mitigate any potential  conflict of interest between its new consumer protection tasks and its 
supervision and financial  stability mandates . The ECB recommends that sufficient mitigation 
measures are put in place.   
4.9 Conclusion  
The ECB considers that there are grounds for regarding the Bank of  Greece’ s new tasks of 
supervis ing and regulati ng the market for consumer credit agreements  as well as authorising and 
supervising credit intermediaries  as central bank tasks, in the sense that they can be regarded as 
complementing the Bank of  Greece’ s existing supervisory functions . However, i t is essential  that 
the new role assigned to the Bank of Greece by the draft law does not adversely affect its capacity 
to carry out its ESCB - or Eurosystem -related tasks and to perform its other functions . To this end, it 
must be  ensured that the supervisory costs incurred by the Bank of  Greece in relation to its new 
tasks  are adequately covered.  Furthermore, it is important to ensure that sufficient mitigation 
measures are in place to adequately address any potential conflict of interests  between the Bank of 
Greece’s new consumer protection tasks  and its existing supervision and financial stability 
mandate.  The ECB invites  the Greek authorities to consider in more depth the abovementioned 
aspects before the draft law is adopted.  
 
This opinion will be published on the ECB’s website.  
 
Done at Frankfurt am Main, 28 June 2016.  
 
[signed]  
 
The President of the ECB  
Mario DRAGHI