Stability in a changing financial landscape – seminar on the Financial Stability Report 2022

The Central Bank of Malta held its annual seminar on the Financial Stability Report (FSR) entitled Stability in a changing fi

This seminar focused on the bank’s 15th edition of the FSR, which assessed the financial stability developments that took place in 2022.

In his welcome address the Central

Bank of Malta Governor, Professor Scicluna stated that “a stable and resilient financial system is an essential prerequisite for price stability and in times of stress, central banks must act swiftly to restore orderly market conditions and ensure financial stability”. He also said that as the Macroprudential Authority, the bank is committed to continue working with industry stakeholders and other authorities to keep delivering on its financial stability mandate and provide risk-based, evidence-led policy solutions.

The audience was then addressed by the Minister for Finance and Employment, Clyde Caruana.

After the minister’s address, Mr Cassar, chief officer Financial Stability and

Statistics Division presented a SWOT analysis of the Maltese financial services sector, underlining the key highlights of the report. Dr Gatt Fenech, manager at the Financial Stability Research Office, followed with a presentation entitled Constructing a cyclical systemic risk indicator for Malta.

This year’s seminar also featured a panel discussion composed of high-level experts, including Dr Detken, head of the ECB’s Macroprudential Policy Division; Mr Cassar, chairperson of the Malta Bankers Association as well as Ms Balzan and Ms Schembri, senior officials from the bank. Moderated by Dr Suban, head of Department and senior lecturer at the University of Malta, the panel discussed the role of macroprudential policy in the context of a tighter monetary policy.

In his closing remarks, Deputy Governor Bonello noted that the sector remained resilient despite a confluence of risks. Banks’ liquidity increased further owing to the continued inflows of deposits, profits continued to recover, while capital levels remained healthy. Highlighting some key recommendations from the FSR in the report, he focused on the need for banks to continue adopting prudent capital planning, so that they would be better placed to absorb economic and financial shocks, as well as meeting their future regulatory requirements.