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The Central Bank of Malta amends Directive No. 8

In response to the COVID-19 pandemic, on 7 April 2020, the Governing Council of the European Central Bank decided to temporarily allow an extension of the Additional Credit Claims frameworks (the 'ACC frameworks') with the possibility for national central banks to include loans backed by COVID-19-related public sector guarantees to corporates, SMEs, self-employed individuals, and households. The temporary extension of the ACC frameworks seeks to allow the further easing of certain requirements for the acceptance of such loans.

In view of this, the Central Bank of Malta established a new ACC framework for individual credit claims granted by credit institutions in Malta that are accredited by the Malta Development Bank under the COVID-19 Government Guarantee Scheme. To this effect, the Bank implemented the terms and conditions of the domestic ACC framework as approved by the Governing Council through amendments effected to its Directive No. 8 on monetary policy instruments and procedures.

The amendments to the Directive entail the following:

1. The Bank’s acceptance of ACCs as collateral for Eurosystem monetary policy operations; and

2. The introduction of a new Annex 15 to the Directive, laying down the terms and conditions of the domestic ACC framework.

The afore-mentioned amendments are applicable as from 1 January 2021.