In order to facilitate the efficient monitoring of credit institutions and credit risk, the Central Bank of Malta (Amendments) Act, 2015 has introduced the concept of a central credit register into Maltese law. The Act provides the Central Bank of Malta (“CBM”) with the power to establish a central credit register consisting of granular information on actual and contingent exposures arising from credit and other facilities. The Register shall be used for the centralisation of information on credit exposures, for the analysis of the stability of the financial system, to aid the implementation of monetary policy, for the compilation of statistics and to facilitate the assessment of credit risk.
On the 15th February 2016 the CBM issued Directive No. 14 which set out the requirements which credit institutions must comply with in relation to providing information to the Register and the conditions for granting access to the information held on the Register. Under the Directive, credit institutions are required to report any exposure which, considered individually, exceeds €5000, to the Register. Credit institutions may access information held on the Register in relation to physical or legal persons who have made an application for the granting of credit or any other service leading to an exposure of the credit institution to such person, as well as on affiliates operating within the same group and on any exposures of persons who are proposed to act as guarantors. Data protection and client confidentiality considerations are clearly of particular relevance in this context.
Such legislation acts a precursor to the proposed ECB regulation on the collection of granular credit and credit risk data, which is currently in draft form. Such a regulation will provide for the creation of a European Central Credit Register, with data being provided by National Central Banks and with all information being shared with other participating National Central Banks. Such a register is crucial for the creation of a harmonised database which will support the ECB in several central banking functions, including macroprudential supervision, risk management and the development of monetary policy.