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 monetary financial institutions of their monthly balance sheets (CON/2005/13)
Date: 2005-05-30
Institutions: European Central Bank
Subjects: Cyprus, balance sheet, disclosure of information, financial institution, national law, statistics

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 monetary 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 consultation of the European Central Bank by 
national  authorities  regarding  draft  legislative  provisions1,  as  the  draft  directive  relates  to  the 

collection by the CBC of financial information submitted 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  requirements  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 purposes. The draft directive 

prescribes the requirements for the statistical returns 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  
2  
3  
4  
5  

OJ L 189, 3.7.1998, p. 42. 
OJ L 333, 17.12.2001, p. 1. Regulation as last amended by Regulation ECB/2004/21 (OJ L 371, 18.12.2004, p. 42).  
OJ L 10, 12.1.2002, p. 24. Regulation as amended by Regulation ECB/2004/21. 
OJ L 241, 26.9.2003 p. 1. Guideline as amended by Guideline ECB/2004/1 (OJ L 83, 20.3.2004, p. 29). 
OJ L 334, 11.12.2002, p. 24. 

 
 
 
 
                                                      
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  NACE  Revision  1.1  classification  established  by 

Council  Regulation  (EEC)  No 3037/90  of  9  October 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 authority for banking supervision in the Republic of 

Cyprus, to define certain reporting 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  the  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 European 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  States  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 shall 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  statistical  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  implement  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 statistical reporting requirements and the timely preparations in the field 

of statistics in order for them to become participating Member States 

6  

7  
8  

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). 
OJ L 318, 27.11.1998, p. 8. 
A ‘participating Member State’ is a Member State which has adopted the euro.  

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8. 

On  the  basis  of  the  above,  the  ECB  welcomes  the  CBC’s  initiative  to  adopt  a  directive  on  the 

requirements for the statistical returns and the contents 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 shape its balance sheet reporting requirements so as 

to bring them into line with those of the Eurosystem, in preparation for the adoption of the euro by 

the Republic of Cyprus. 

9. 

The  ECB  welcomes  the  core  objective  of  the  draft  directive,  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 national 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 definition of such entities and includes them within 

its  scope.  The  inclusion  of  the  additional  item  ‘Money  market  fund  shares/units  issued’  under 

‘Liability  categories’  in  Section  I.6  would  better  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 Section 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  securities  issued’  under  Regulation  ECB/2001/13, 
depending on whether or not they are negotiable9. 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 ‘Debt securities issued’, as appropriate, would bring 

the  reporting  requirements  in  the  draft  directive  more  closely  into  line  with  those  of  Regulation 

ECB/2001/13. 

9  

See Part 3 of Annex I to Regulation ECB/2001/13, table entitled ‘Detailed description of instrument categories of the 
monthly aggregated balance sheet of the MFI sector’, in particular categories 9, 11 and 13.  

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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 

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