EN  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 30 May 2005 
at the request of the Central Bank of Cyprus 
on a draft directive on the reporting by mo netary financial institutions of their  
monthly balance sheets 
(CON/2005/13) 
 1. On 26 April 2005, the European Central Bank (ECB) received a request from the Central Bank of 
Cyprus (CBC) for an opinion on a draft directive on the reporting by monetary financial institutions 
of their monthly balance sheets (hereinafter the ‘draft directive’). 
2. The ECB’s competence to deliver an opinion is based on the fourth indent of Article 2(1) of 
Council Decision 98/415/EC of 29 June 1998 on the c onsultation of the European Central Bank by 
national authorities regarding draft legislative provisions
1, as the draft directive relates to the 
collection by the CBC of financial information s ubmitted by reporting agents. 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. 
3. The draft directive reflects the provisions of Regulation ECB/2001/13  of 22 November 2001 
concerning the consolidated balance sheet of  the monetary financial institutions sector2, and 
incorporates the balance sheet requirements of Regulation ECB/2001/18  of 20 December 2001 
concerning statistics on interest rates applied by monetary financial institutions to deposits and 
loans vis-à-vis households and non-financial corporations3, Guideline ECB/2003/2 of 6 February 
2003 concerning certain statistical reporting require ments of the European Central Bank and the 
procedures for reporting by the national central banks  of statistical information in the field of 
money and banking statistics4, and Guideline ECB/2002/7 of 21 November 2002 on the statistical 
reporting requirements of the European Central Bank in the field of quarterly financial accounts5 as 
well as other information required by the CBC for its  own supervisory purpo ses. The draft directive 
prescribes the requirements for the statistical return s and the contents of the monthly balance sheets 
which monetary financial institutions (MFIs) are required to submit to the CBC and it is intended 
                                                      
1  OJ L 189, 3.7.1998, p. 42. 
2  OJ L 333, 17.12.2001, p. 1. Regula tion as last amended by Regulation E CB/2004/21 (OJ L 371, 18.12.2004, p. 42).  
3  OJ L 10, 12.1.2002, p. 24. Regulatio n as amended by Regulation ECB/2004/21. 
4  OJ L 241, 26.9.2003 p. 1. Guid eline as amended by Guideline ECB/2004/1 (OJ L 83, 20.3.2004, p. 29). 
5  OJ L 334, 11.12.2002, p. 24. 
2 that it shall apply to all MFIs licensed to operate  in Cyprus. It also includes a breakdown of loans 
by economic activity, in accordance with the NA CE Revision 1.1 classification established by 
Council Regulation (EEC) No 3037/90 of 9 Octobe r 1990 on the statistical classification of 
economic activities in the European Community6, as required for financial stability purposes. The 
legal basis for the adoption of the draft directive is Section 63 of the Central Bank of Cyprus Laws 
of 2002 and 2003, and Sections 25 and 26 of the Banking Laws of 1997 to 2004 which, inter alia , 
empower the CBC, as the competent national authorit y for banking supervisio n in the Republic of 
Cyprus, to define certain repor ting requirements necessary for the fulfilment of its objectives and 
for the exercise of its powers, and to impose these on MFIs in Cyprus.  
4. The draft directive is intended to run in parallel with the CBC Balance Sheet Directive currently in 
force, until such time as the CBC has verified th e correct implementation of the new reporting 
requirements imposed under the draft directive. 
5. Article 5.2 of the Statute of the European System  of Central Banks and of the European Central 
Bank provides that the national central banks (NCBs ) shall carry out, to the extent possible, the 
tasks described in Article 5.1 of the Statute, i. e. the European System of Central Banks (ESCB) 
tasks prescribed in the Treaty establishing the Europ ean Community and in the Statute. Article 43.1 
of the Statute implies that legal instruments adopted  by the ECB for the fulfilment of its statistical 
reporting requirements do not confer any rights or  impose any obligations on the non-participating 
Member States. 
6. Article 10 of the Treaty requires that ‘Member St ates shall take all appropriate measures ... to 
ensure fulfilment of the obligations arising out of this Treaty’. More specifically, Article 4 of 
Council Regulation (EC) No 2533/98 of 23 November  1998 concerning the collection of statistical 
information by the European Central Bank7 requires that ‘Member States shall organise themselves 
in the field of statistics and sha ll fully cooperate with the ESCB in order to ensure the fulfilment of 
the obligations arising out of Article 5 of the Statute’. 
7. Recital 17 of Regulation (EC) No 2533/98 states that , ‘while it is recognised that the statistical 
information needed to fulfil the ECB’s statisti cal reporting requirements is not the same for the 
participating8 as for the non-participating Member States,  Article 5 of the Statute applies to both 
participating and non-participating Member States’; this fact, together with Article 10 of the 
Treaty, implies an obligation to design and implem ent at the national level all the measures that 
Member States consider appropriate in order to carry  out the collection of the statistical information 
needed to fulfil the ECB’s statis tical reporting requirements and the timely preparations in the field 
of statistics in order for them to become participating Member States 
                                                      
6  OJ L 293, 24.10.1990, p. 1. Regulation as amended by Commission Regulation (EC) No  29/2002 (OJ L 6, 10.1.2002, 
p. 3). 
7  OJ L 318, 27.11.1998, p. 8. 
8  A ‘participating Member State’ is a Member State which has adopted the euro.  
3 8. On the basis of the above, the ECB welcomes th e CBC’s initiative to adopt a directive on the 
requirements for the statistical returns and the cont ents of the monthly balance sheets of MFIs, and 
notes that the reporting requirements of NCBs are an indispensable component of the national statistical collection systems. The ECB does not comment in detail on national reporting provisions, as these may differ considerably between Member States, depending on various national and external factors. The ECB’s comments are therefore of a general nature only, and are 
meant to serve as a guide, enabling the CBC to shap e its balance sheet reporting requirements so as 
to bring them into line with those of the Eurosyst em, in preparation for the adoption of the euro by 
the Republic of Cyprus. 
9. The ECB welcomes the core objective of the draft di rective, which is to bring the balance sheet 
reporting requirements of the CBC into line with those prescribed under the relevant legal acts and 
instruments of the ECB.  This revision of the reporting obligations of MFIs towards the CBC is 
welcome, since accurate and timely balance sheet statistical information is necessary for the CBC’s 
fulfilment of its tasks, also vis-à-vis the ESCB. 
10. The ECB observes that, in certain  respects, the draft directive goes beyond what is strictly 
necessary for the fulfilment of the MFI balance sheet reporting requirements of the ECB. It is 
nevertheless noted that it is the task primarily  of NCBs to assess whether any proposed detailed 
reporting instructions and collection methods at natio nal level are the most efficient, effective and 
the least burdensome for the reporting agents concerned.  
11. The ECB notes that, although no money market funds (MMFs) have so far been identified among 
MFIs in Cyprus, the draft directive contains a de finition of such entities and includes them within 
its scope. The inclusion of the additional ite m ‘Money market fund shares/units issued’ under 
‘Liability categories’ in Section I.6 would be tter accommodate the possibility that licences to 
operate as an MMF may be granted to resident entities in the future.  
12. The ECB notes that, in Schedule No 13 of Secti on I.6, under the heading ‘Remaining liabilities’, 
the sub-item ‘Debts evidenced by certificates’ consists of financial instruments which would be classified either as ‘Deposits’ or ‘Debt secu rities issued’ under Regulation ECB/2001/13, 
depending on whether or not they are negotiable
9. Accordingly, a reclassification of the instruments 
referred to in the sub-item ‘Debts evidenced by  certificates’ from the category of ‘Remaining 
liabilities’ to the categories ‘Deposits’ and/or ‘D ebt securities issued’, as appropriate, would bring 
the reporting requirements in the draft directive mo re closely into line with those of Regulation 
ECB/2001/13. 
 
                                                      
9  See Part 3 of Annex I to Regulation E CB/2001/13, table entitled ‘Detailed descript ion of instrument categories of the 
monthly aggregated balance sheet of the MFI sect or’, in particular categories 9, 11 and 13.  
 
4 13. This opinion does not prejudice any later assessment  by the ECB of the balance sheet reporting 
scheme applicable in the Republic of Cyprus or of the balance sheet information reported to the 
CBC against the balance sheet reporting requirements of the ECB. 
14. This opinion will be published on the ECB’s website. 
  Done at Frankfurt am Main, 30 May 2005. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET