Opinion of the European Central Bank of 19 June 2015 on a central credit register (CON/2015/20)
Date: 2015-06-19
Institutions: European Central Bank
Subjects: Malta, credit, credit institution, data collection, national law, statistics

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 19 June 2015 

on a central credit register 

(CON/2015/20) 

Introduction and legal basis 

On  8  April  2015,  the  European  Central  Bank  (ECB)  received  a  request  from  the  Central  Bank  of  Malta 

(CBM)  for  an  opinion  on  a  draft  bill  amending  the  Central  Bank  of  Malta  Act  (Cap.  204  of  the  Laws  of 

Malta) and a draft Central Bank of Malta Directive No 14 on a central credit register (hereinafter the ‘draft 

bill’ and the ‘draft directive’, respectively and together referred to as the ‘draft laws’). 

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,  fourth  and  sixth  indents  of  Article 2(1)  of  Council 
Decision 98/415/EC1, as the draft laws relate to the CBM, the collection, compilation and distribution of 

financial and banking statistics, and the rules applicable 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 laws  

1.1  The draft bill 

1.1.1  The  draft  bill  provides  for  the  establishment  and  operation  of  a  central  credit  register  (hereinafter 

the ‘Register’) at the CBM. The Register will contain non-anonymised, granular information on the 

actual  and  contingent  exposures  of  natural  or  legal  persons,  whether  resident  in  Malta  or  not, 

arising  from  credit  and  other  facilities  granted  to  them  by  credit  institutions.  The  Register  will  be 

used  to  support  (a)  the  centralisation  of  information  on  credit  exposures,  (b)  the  analysis  of  the 

stability  of  the  financial  system,  (c)  the  implementation  of  monetary  policy,  (d)  the  compilation  of 

statistics and (e) the assessment of credit risk. 

1.1.2  The  draft  bill  authorises  the  CBM  to  provide  access  to  the  information  held  in  the  Register  to 

national  central  banks  and  other  institutions  of  Member  States  having  comparable  databases,  on 

the basis of reciprocity. It also empowers the CBM to collect information from the National Statistics 

Office, when necessary for the discharge of the CBM’s duties in relation to the Register. The draft 

bill  ensures  that  borrowers  have  the  right  to  obtain  the  information  detailing  their  own  exposures 

which is stored in the Register. 

1  

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 

1.1.3  The draft bill authorises the CBM to issue directives that impose requirements on credit and other 

institutions to provide information to the Register and set out the conditions for granting access to 

the data held in the Register, including the imposition of fees.  

1.2  The draft directive 

1.2.1  The draft directive requires credit institutions to report to the CBM, on a monthly basis, the end of 

month balances of exposures related to granting credit facilities. It also sets out rules regulating the 

right of access of credit institutions to the data held in the Register. These rules clarify that (a) the 
data to be accessed will not include a reference to the credit institution granting the credit facility2, 

(b) the information accessed by credit institutions may not be transmitted to third parties and must 
only be used for the purpose of assessing credit risk 3, (c) retention periods will be established4 and 
(d)  the  written  consent  of  the  borrower  is  required5  before  a  credit  institution  may  access  data 

relating  to  his  credit  exposures.  The  draft  laws  are  also  without  prejudice  to  laws  on  data 
protection6  and  each  credit  institution  must  designate  a  maximum  of  three  employees  as 
authorised representatives for the purpose of accessing the Register 7. 

1.2.2  The  CBM  will  charge  fees  to  credit  institutions  for  accessing  the  Register  based  on  annual  fees 

calculated on the basis of the cost incurred by the CBM in hosting the Register, alongside the credit 

institution’s share in credit exposure over the previous calendar year, and access fees in respect of 

specific requests. The precise amount of fees has not yet been established. 

2. 

General observations 

2.1  The ECB welcomes the draft laws. The Register will enable the CBM to create a national granular 
credit database of the type referred to in Decision ECB/2014/68, in respect of which the CBM has a 

derogation  until  30  June  2016  under  Article  3(3).  By  virtue  of  Decision  ECB/2014/6  addressed  to 

Eurosystem central banks, preparatory measures are required to be taken by these central banks 

so that, within the given timeframe, the following is achieved: (a) national granular credit databases 

operated  by  all  of  them,  and  (b)  a  common  granular  credit  database  shared  between  all  of  them 

and comprising granular credit data for all Member States whose currency is the euro. In addition, 
in  the  Maltese  context9,  the  Register  would  also  contribute  to  the  CBM’s  function  to  ensure  the 
stability of the Maltese financial system 10.  

2.2  From the perspective of credit institutions, the Register will enable more informed assessments of 

credit  risk,  both  in  terms  of  the  initial  decision  to  grant  a  credit  facility  and  in  terms  of  ongoing 

2  
3  
4  
5  
6  
7  
8   

9  
10  

Article 8 of the draft directive. 

Article 8 of the draft directive. 
Article 7 of the draft directive. 

Article 9 of the draft directive and Annex II thereof. 
Article 3 of the draft directive.   

Article 10 of the draft directive. 
Decision  of  the  European  Central  Bank  ECB/2014/6  of  24  February  2014  on  the  organisation  of  preparatory 
measures for the collection of granular credit data by the European System of Central Banks (OJ L 104, 8.4.2014, 
p. 72). 
Depending on the circumstances, this may also be the case for other euro area Member States and central banks. 
Article 5(1)(c) of the Central Bank of Malta Act (Cap. 204 of the Laws of Malta). 

2 

 
                                                 
ECB-PUBLIC 

assessments  of  existing  exposures.  The  Register  therefore  enhances  credit  institutions’  risk 

management capabilities. 

2.3  The  ECB  is  currently  developing  a  long-term  legal  framework  for  the  collection  of  granular  credit 

and risk data by the ECB and the European System of Central Banks. This framework will define 

harmonised reporting requirements for credit data in  all reporting Member States. The finalisation 

of  this  long-term  legal  framework  may  impact  the  draft  laws,  for  example  by  requiring  additional 

data attributes to be collected and/or a different feedback loop to reporting agents. This means that 

the draft laws may need to be amended in the near future. 

3. 

Exchange of information  

3.1  The draft bill provides that the CBM may provide information held in the Register to national central 

banks  and  other  institutions  of  Member  States  that  have  comparable  databases,  on  the  basis  of 

reciprocal  arrangements.  In  this  respect,  the  ECB  notes  that  the  scope  of  the  data  collected  by 

different  credit  registers  will  continue  to  vary  across  Member  States  until  further  harmonisation  is 

achieved, with the result that the exchange of information under this provision may not be possible 

in certain cases. Moreover, as the ECB does not currently have a comparable register, it cannot be 

provided with information in the Register on the basis of this particular provision. 

3.2  The ECB notes that the information in the Register constitutes a useful tool for the micro-prudential 

supervision  of  credit  institutions.  From  a  financial  stability  and  macro-prudential  perspective,  the 

information in the Register would allow the monitoring and assessment of the build-up and appetite 

for  credit  risk  in  the  banking  system  generally,  thereby  helping  to  calibrate  the  use  of  macro-

prudential instruments. The draft law does not contain an explicit provision allowing the information 

on the Register to be accessed by the ECB or by the Malta Financial Services Authority (MFSA), 

the  national  supervisor  of  credit  institutions.  However,  under  Article  37(1)  of  the  Central  Bank  of 

Malta  Act,  the  CBM  is  required  to  pass  on  to  the  MFSA  any  information  in  its  possession  or  to 
which it has access when so requested by the MFSA in the exercise of its duties under law 11. The 

ECB also understands that, subject to data protection requirements, the ECB may, in the exercise 

of  its  supervisory  duties  relative  to  credit  institutions,  require  the  MFSA  to  request  and  pass  on 
information  contained  in  the  Register 12.  This  point  is  also  relevant  in  the  context  of  the  macro-
prudential tasks conferred on the ECB in Council Regulation (EU) No 1024/2013 13, which requires 

the ECB to take into account the specific situation of the financial system, economic situation and 

the economic cycle in the individual Member States or parts thereof. 

11  

12 

13  

A similar provision is also found in Article 18(1) of the Malta Financial Services Authority Act (Cap. 330 of the Laws 
of Malta). 
This understanding is based on Article 6(2) of Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring 
specific  tasks  on  the  European  Central  Bank  concerning  policies  relating  to  the  prudential  supervision  of  credit 
institutions  (OJ  L  287,  29.10.2013,  p.  63)  and  Article  21  of  Regulation  (EU)  No  468/2014  of  16  April  2014  of  the 
European  Central  Bank  establishing  the  framework  for  cooperation  within  the  Single  Supervisory  Mechanism 
between  the  European  Central  Bank  and  national  competent  authorities  and  with  national  designated  authorities 
(SSM Framework Regulation) (ECB/2014/17) (OJ L 141, 14.05.2014, p. 1). 
Article  5  of  Council  Regulation  (EU)  No  1024/2013  of  15  October  2013  conferring  specific  tasks  on  the  European 
Central Bank concerning policies relating to the  prudential supervision of credit institutions (OJ L 287,  29.10.2013, 
p. 63). 

3 

 
                                                 
ECB-PUBLIC 

3.3  Regarding  the  access  of  the  ECB  to  the  information  contained  in  the  Register  for  statistical  and 

monetary  policy  (as  distinct  from supervisory)  purposes,  the  ECB  notes  that  it  may  be  entitled  to 

access certain information contained in the Register under Article 41 of the Central Bank of Malta 

Act, which provides that the CBM may disclose information to ‘international or other bodies’ when 

this is required pursuant to international obligations. Subject to data protection considerations, the 

ECB  understands  that  this  provision  would  limit  the  ECB’s  access  to  the  Register  to  where  the 

CBM  is  required  to  disclose  information  to  the  ECB.  Consideration  should  therefore  be  given  to 

amending  the  draft  laws  or  the  Central  Bank  of  Malta  Act  to  ensure  a  clearer  legal  basis  for  the 

ECB’s  access  rights  to  the  information  contained  in  the  Register,  as  has  been  done  in  other 
Member States 14.  

4. 

Specific additional observations 

4.1  The scope of the draft directive  is restricted to credit institutions, whereas the draft bill  allows the 

CBM  to  impose  reporting  requirements  on  ‘credit  and  other  institutions’.  The  CBM  may  wish  to 

consider extending reporting obligations to financial institutions that are not credit institutions.  

4.2  The ECB notes that some definitions of the data attributes to be reported under the draft directive, 
particularly  credit  data  variables  and  credit  data  measures15,  could  be  defined  in  a  more  specific 

manner  in  order  to  ensure  more  consistent  reporting  by  credit  institutions.  In  particular,  the  data 

attribute ‘specific credit risk adjustment’ is defined very widely.  

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 19 June 2015. 

[signed] 

The President of the ECB 

Mario DRAGHI 

14  
15  

See, e.g., Opinion CON/2013/93, paragraph 2.1 and Opinion CON/2014/57, paragraph 2.2. 

Annex 1 of the draft directive. 

4