Prudential Supervision and the European Central Bank Credit Data Registry (AnaCredit): Legal Basis and Democratic Accountability

Abstract

This paper discusses the centralisation of credit-risk data in the hands of the European Central Bank (‘ECB’) within the set of new competences assigned to it under the Banking Union (‘BU’). The ECB is creating the largest central registry or database of this kind, containing granular deposit and loan-by-loan data of borrowers from Euro-area banks (under the name of Analytical Credit and Credit Risk Dataset, or the acronym of ‘AnaCredit’). It is meant to become a tool to perform the ECB new function as the new macro-prudential supervisor of the Eurozone. To establish this new reporting system, the ECB has issued a draft regulation which sets the details and the rules of its operation. The goal of this paper is to discuss the AnaCredit project and the ECB draft regulation in the context of the role and function of credit data sharing among lenders and the organisations currently operating in the Member States that collect a variety of financial data about transactions between borrowers and lenders. The complexity to discuss this topic arises from the fact that credit reporting activities and functions in the economy differ significantly within the EU, depending largely on national cultures and traditions, institutional arrangements and the economic and regulatory environment. Macro-prudential supervision is only one of the possible functions of credit data limited to some Member States, which have to be proportionate to achieve the objectives that they aim to reach. Therefore, the ultimate question is to what extent the ECB is legitimately using the regulatory powers conferred to it by the Treaties to perform its designated tasks. The answer to this question may have far reaching consequences in terms of the democratic accountability of the EU as redesigned by the BU.