Malta: Financial System Stability Assessment

February 27, 2019

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Malta: Financial System Stability Assessment, (USA: International Monetary Fund, 2019) accessed December 22, 2024

Summary

This Financial System Stability Assessment of Malta shows that while Malta has benefited from considerable financial inflows, the associated risks, especially related to money laundering and terrorism financing, need to be closely monitored and addressed. Key metrics suggest that the banking system is in good health, but challenges exist. The banking system remains resilient under a severe scenario, with weaknesses limited to a few small banks. The system is sufficiently capitalized to absorb losses in the event of a severe macroeconomic shock, but risky exposures would lead to potential losses at a few small banks. The analysis suggests that ensuring adequate resources is critical to preserve the effectiveness and operational independence of the Malta Financial Services Authority (MFSA). In order to strengthen bank supervision, the MFSA should take timelier supervisory actions, increase the frequency of onsite inspections, make more use of monetary fines as part of the sanctioning regime, and ensure supervisory action is not delayed through judicial appeal.

Subject: Anti-money laundering and combating the financing of terrorism (AML/CFT), Banking, Capital adequacy requirements, Commercial banks, Crime, Economic sectors, Financial institutions, Financial sector, Insurance companies, Loans

Keywords: Anti-money laundering and combating the financing of terrorism (AML/CFT), Bank, Bank insolvency framework, Bank owner, Banking sector, Banking system, Commercial banks, CR, Financial sector, Global, IMF staff calculation, Insolvency framework, Insurance companies, ISCR, Loans, NPL ratio, Potential GDP, Regime, Sample bank, Weakness stem

Publication Details

Pages:

62
Volume:

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DOI:

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Issue:

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Series:

Country Report No. 2019/070
Stock No:

1MLTEA2019003
ISBN:

9781498300636
ISSN:

1934-7685

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