Opinion of the European Central Bank of 26 November 2024 on the establishment of the remuneration of the Governor and Deputy Governor of the Central Bank of Malta (CON/2024/38)
Date: 2024-11-26
Institutions: European Central Bank
Subjects: legal basis

ECB-PUBLIC 

EN 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 26 November 2024 

on the establishment of the remuneration of the Governor and Deputy Governor of the Central 

Bank of Malta 

(CON/2024/38) 

Introduction and legal basis 

On 2 April 2024 the Parliament of Malta adopted an amendment to Article 8(1) of the Central Bank of Malta 

Act1  (hereinafter  the  ‘amendment  to  the  CBM  Act’)  concerning  the  remuneration  of  the  Governor  and 

Deputy Governors of the Central Bank of Malta (CBM). 

On 19 July 2024 the European Central Bank (ECB) received a request from the CBM for an opinion on 

draft  amendments  to  the  Central  Bank  of  Malta  Bye-Laws,  19682  (hereinafter  the  ‘draft  bye-laws’) 

concerning the remuneration of the Governor and Deputy Governors of the CBM. 

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 Article 2(1), third indent, of Council Decision 98/415/EC3, as the 

amendment to the CBM Act and the draft bye-laws relate to the CBM. In accordance with Article 17.5, first 

sentence, of the Rules of Procedure of the European Central Bank, the Governing Council has adopted 

this opinion. 

1. 

Purpose of the amendment to the CBM Act 

1.1  The amendment to the CBM Act relates to the establishment of the remuneration of the Governor 

and Deputy Governors of the CBM. Prior to the amendment to the CBM Act, Article 8(1) of the CBM 

Act  provided  that  the  remuneration  of  the  Governor  and  Deputy  Governors  was  set  out  in  their 

respective  letters  of  appointment.  In  practice,  this  meant  that  it  was  previously  the  Government’s 

responsibility to set the remuneration of the Governor and Deputy Governors.  

1.2   Following the adoption of the amendment to the CBM Act, this responsibility has been transferred to 

the Board of Directors of the CBM (hereinafter the ‘Board’). Article 8(1) of the CBM Act now provides 

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See Part IV (‘Amendments to the Central Bank of Malta Act’) of Act XIII of 2024, entitled ‘an Act to implement Budget 
Measures for the Financial Year 2024 and other administrative measures’. 

The draft bye-laws are being proposed for adoption by the Board of Directors of the CBM under Article 58 of the CBM 
Act,  which  provides  that  ‘The  Board  may  make  bye-laws  not  inconsistent  with  this  Act,  for  the  good  order  and 
management of the Bank’. 

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). 

 
 
 
 
 
 
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that  the  Governor  and  Deputy  Governors  are  to  receive  such  remuneration  as  approved  by  the 

Board 4. 

2. 

Purpose of the draft bye-laws 

2.1  The draft bye-laws provide for the setting-up of a Remuneration Committee entrusted with advising 

the  Board  on  its  new  responsibility  of  establishing  the  remuneration  of  the  Governor  and  Deputy 

Governors under Article 8(1) of the CBM Act.  

2.2  The draft bye-laws provide for the Remuneration Committee to be composed of three members: (1) 

a retired judge or an advocate, preferably with experience in commercial matters; (2) a professional 

with extensive experience in human resources matters; and (3) a retired central banker preferably 

from a Eurosystem Member State. The members of the Remuneration Committee are to receive the 

remuneration  determined  by  the  Board  and  hold  office  for  a  period  of  3  years,  with  eligibility  for 

reappointment. They are to be independent from the CBM and cannot be removed during their term 

of office except on grounds of proven inability to perform the functions of their office or any other 

cause, or proven misbehaviour. The Remuneration Committee is to meet when necessary, however 

not less than once per year. The presence of all the members of the Remuneration Committee will 

be necessary for a quorum. 

2.3  The draft bye-Laws provide that when the Board makes a decision related to the recommendations 

of  the  Remuneration  Committee,  any  Governor  or  Deputy  Governor  whose  remuneration  is  the 

subject  of  the  decision  will  be  excused  from  the  Board  meeting  and  will  not  participate  in  any 

discussions or vote.  

3. 

Observations 

3.1  As the amendment to the CBM Act and the draft bye-laws affect the remuneration of the Governor 

and  Deputy  Governors  of  the  CBM,  they  should  be  examined  from  the  perspective  of  the 

requirements of central bank independence. 

3.2  Financial independence  

3.2.1  Member  States  may  not  put  their  national  central  banks  (NCBs)  in  a  position  where  they  have 

insufficient  financial  resources  and  inadequate  net  equity  to  carry  out  their  European  System  of 

Central Banks or Eurosystem-related tasks, as applicable 5. This financial independence also entails 

that  any  amendment  to  the  legislative  provisions  on  the  remuneration  for  members  of  an  NCB’s 

decision-making bodies should be decided in close and effective cooperation with the NCB, taking 

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The Board of Directors of the CBM is composed of the Governor, the two Deputy Governors and the four directors of 
the CBM appointed under Article 9 of the CBM Act. 

See  ECB  Convergence  Report,  June  2024,  pp.  27-28  (Chapter  2.2,  Section  entitled  ‘Financial  Independence’), 
available on the ECB’s website at www.ecb.europa.eu.  

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due  account  of  its  views,  to  ensure  the  ongoing  ability  of  the  NCB  to  independently  carry  out  its 

tasks6. 

3.2.2  Against this background, the ECB welcomes the transfer of responsibility for setting the remuneration 

of  the  CBM  Governor  and  Deputy  Governors  from  the  Government  to  the  Board  pursuant  to  the 

amendment to the CBM Act and the draft bye-laws as this will strengthen the CBM’s autonomy with 

regard to the setting of the remuneration of the Governor and Deputy Governors. 

3.3  Personal independence 

3.3.1  Article 130 of the Treaty prohibits national governments and any other bodies from influencing the 

members  of  NCBs’  decision-making  bodies  in  the  performance  of  the  tasks  and  duties  conferred 

upon  them  by  the  Treaties  and  the  Statute  of  the  European  System  of  Central  Banks  and  of  the 

European Central Bank (hereinafter the ‘Statute of the ESCB’). In this context, the protection of the 

remuneration of the members of the decision-making bodies of NCBs is necessary to safeguard their 

personal independence. In particular, Member States may not seek to influence the members of a 

NCB’s decision-making bodies by amending national legislation affecting their remuneration, which, 

as a matter of principle, should apply only for future appointments 7.  

3.3.2  The ECB understands that the Governor of the CBM has the sole responsibility for the performance 

of the functions imposed, and the exercise of powers conferred, on the CBM by or under the Treaties 

and  the  Statute  of  the  ESCB 8.  However,  the  two  Deputy  Governors  of  the  CBM  can  also  be 

considered to be members of the decision-making bodies of the CBM, in so far as they could perform 

the duties of the Governor in certain cases 9.  

3.3.3  As the amendment to the CBM Act has transferred the responsibility of approving the remuneration 

of the CBM Governor and Deputy Governors from the Government to the Board (see paragraphs 1.1 

and 1.2), the Government would not be able to change the remuneration of the CBM Governor and 

Deputy Governors during their term of office. Accordingly, the independence requirements laid down 

in Article 130 of the Treaty would not be breached by such changes in the remuneration of the CBM 

Governor and Deputy Governors, particularly if they are based on objective criteria, for example, by  

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See ECB Convergence Report 2024, pp. 30-31 (Chapter 2.2, sub-section entitled ‘Autonomy in staff matters’). This 
sub-section also deals with the remuneration of staff and requires that Member States may not impair an NCB’s ability 
to employ and retain the qualified staff necessary for the NCB to perform independently the tasks conferred on it by 
the Treaty and the Statute of the ESCB. In addition, an NCB may not be put into a position where it has limited or no 
control over its staff, or where the government of a Member State is in a position to influence the NCB’s policy on staff 
matters. See also, paragraph 3.1.1 of Opinion CON/2010/51, paragraph 3.2 of Opinion CON/2010/56, paragraph 3.1 
of  Opinion  CON/2010/69,  paragraph  3.2.1  of  Opinion  CON/2010/80,  paragraph  8  of  Opinion  CON/2011/104, 
paragraph  4.3  of  Opinion  CON/2011/106,  paragraph  2  of  Opinion  CON/2012/6,  paragraph  3.2  of  Opinion 
CON/2012/86, paragraph 2.9 of Opinion CON/2019/19. 

See ECB Convergence Report, June 2024, p. 25 (Chapter 2.2, sub-section entitled ‘Personal independence’). See 
also  paragraph  3.5  of  Opinion  CON/2010/56,  paragraph  3.2.9  of  Opinion  CON/2010/80,  paragraph  8  of  Opinion 
CON/2011/104, paragraph 4.3 of Opinion CON/2011/106 and paragraph 3.5.2 of Opinion CON/2021/9. 

See Article 8(2), point (a), of the CBM Act. 

Article  8(3),  points  (a)  and  (b),  of  the  CBM  Act  provide  that  in  the  event  of  (a)  the  absence  of  the  Governor,  the  
Governor shall designate a Deputy Governor to perform the duties of the Governor; (b) a  vacancy  in  the  office  of  
the  Governor,  the  Board shall  designate  a  Deputy  Governor  to  perform the duties  of  the Governor, until a new 
Governor is appointed as soon as possible; and the Deputy Governor so designated shall have and may exercise the 
powers and perform the functions of the Governor. 

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benchmarking  their  salaries  with  designated  positions  within  the  CBM,  with  the  aim  of  ensuring 

proportionality between the different hierarchical positions at the CBM. 

ECB-PUBLIC 

This opinion will be published on EUR-Lex. 

Done at Frankfurt am Main, 26 November 2024. 

[signed] 

The President of the ECB 

Christine LAGARDE 

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