Central Bank of Malta holds its annual Forum for Financial Stability
The Central Bank of Malta held its annual Forum for Financial Stability on 6 December at Binja Laparelli. The aim of the forum is to bring together key stakeholders within the banking and financial sector at large, to discuss the latest challenges and developments impacting financial stability. This year’s forum was chaired by Alan Cassar, chief officer Financial Stability and Statistics.
In his opening remarks, the Central Bank of Malta Governor, Professor Scicluna stated that “while authorities can implement stronger regulatory reforms and frameworks, the success of these policies rely heavily on the behaviour of market participants”.
Dr William Gatt Fenech, manager of the Financial Stability Research Office, followed with a presentation on the construction of a semistructural credit gap for Malta based on the multivariate filter, which is an additional tool in the bank’s arsenal to assess cyclical risk. The audience was then addressed by Deputy Governor Alexander Demarco who provided a status update on the Digital Euro project. He explained that following the conclusion of a two-year investigation phase on the design of the digital euro, the preparation phase will make way for the decision to issue the euro in a digital form, which could be used for all digital payments throughout the euro area. This discussion also touched upon the financial stability considerations of such a digital euro where David Stephen Law also presented an impact assessment.
In this year’s forum, the Malta Bankers’ Association (MBA) was invited to discuss the banks’ journey towards ESG compliance. Karol Gabarretta, MBA secretary general, together with Glenn Bugeja, vice president of the MBA’s Standing Committee on ESG,
Sustainability and Economic Growth highlighted key issues that the banking community is facing. Catherine Galea, the MFSA’s head of Banking Supervision, gave a brief introduction on the current requirements imposed on banks and proposed avenues to tackling challenges in this area.
In his closing remarks, Deputy Governor Oliver Bonello referred to the complementary role of the digital euro to the Eurosystem’s retail payments strategy and on the importance of ESG since it is becoming an increasingly key aspect of doing business.