CBM Maintains CCyB at 0%; MFSA Publishes Study on Fintech Adoption
The Central Bank of Malta (CBM) decided to maintain the countercyclical capital buffer (CCyB) rate for banks at 0%, for the second quarter of 2023. The Malta Financial Services Authority (MFSA) issued a circular on the transposition of the Covered Bonds Directive, published a study on the state of digital transformation and fintech adoption within the Maltese financial services sector; it also announced the integration of financial institutions’ authorization and supervision teams, which were within the remit of the Banking Supervision function until end of February 2023, into Fintech Supervision, with effect from March 01, 2023.
The Covered Bonds Directive sets out principles for a pan-European framework for covered bonds and aims to harmonize the supervision and treatment of these instruments across European Union Member States. The purpose of the Directive is to regulate the conditions under which credit institutions can issue covered bonds as a financing tool, by laying down requirements for issuing covered bonds, the structural features of covered bonds, covered bond public supervision and publication requirements in relation to covered bonds. The circular highlights that the Covered Bonds Directive has been transposed by virtue of Financial Markets Act (covered bonds) regulations, amendments to the recovery and resolution regulations, as well as amendments to the investment services rules. Going forward, MFSA will be supplementing the transposition with further details in relation to the implementation of the said Directive.
The Fintech Adoption Study provides an in-depth understanding and analysis on the adoption of fintech, its market conditions, and their consequent externalities. The findings show that more than 50% of financial services entities surveyed by MFSA in July 2022 have taken actions towards digitization, digitalization, or the implementation of enabling technologies and innovations. Respondents have cited efficiency, enhanced customer experience and engagement, as well as a reduction of operational risks as the main objectives behind their adoption of digital transformation strategies. The study reveals that the main enabling and innovative technologies adopted were cloud computing, application programming interfaces (APIs), and web and mobile applications. The cloud computing was found to be mostly prevalent across insurance intermediaries, APIs across financial institutions, and web and mobile applications across investment funds. A significant number of respondents have also confirmed that they make use of regulatory technology solutions, mostly for anti-money laundering and counter terrorism financing (AML/CFT) purposes. While cyber risk was perceived as the highest level of risk mostly prevalent across cloud computing, web and mobile applications and APIs according to respondents, they believed that the increase in such risk was low, indicating no immediate threats to financial stability.
Related Links
Keywords: Europe, Malta, Banking, Basel, Regulatory Capital, CCyB, Covered Bond Directive, Regtech, Fintech, Digital Transformation, Operational Risk, API, AML CFT, Cyber Risk, Cloud Computing, CBM, MFSA
Featured Experts
María Cañamero
Skilled market researcher; growth strategist; successful go-to-market campaign developer
Nicolas Degruson
Works with financial institutions, regulatory experts, business analysts, product managers, and software engineers to drive regulatory solutions across the globe.
Patrycja Oleksza
Applies proficiency and knowledge to regulatory capital and reporting analysis and coordinates business and product strategies in the banking technology area
Previous Article
SBV Announces Regulatory Updates for BanksRelated Articles
EBA Finalizes Templates for One-Off Climate Risk Scenario Analysis
The European Banking Authority (EBA) has published the final templates, and the associated guidance, for collecting climate-related data for the one-off Fit-for-55 climate risk scenario analysis.
EBA Mulls Inclusion of Environmental & Social Risks to Pillar 1 Rules
The European Banking Authority (EBA) recently published a report that recommends enhancements to the Pillar 1 framework, under the prudential rules, to capture environmental and social risks.
BCBS Consults on Disclosure of Crypto-Asset Exposures of Banks
As a follow on from its prudential standard on the treatment of crypto-asset exposures, the Basel Committee on Banking Supervision (BCBS) proposed disclosure requirements for crypto-asset exposures of banks.
BCBS and EBA Publish Results of Basel III Monitoring Exercise
The Basel Committee on Banking Supervision (BCBS) and the European Banking Authority (EBA) have published results of the Basel III monitoring exercise.
PRA Updates Timeline for Final Basel III Rules, Issues Other Updates
The Prudential Regulation Authority (PRA) recently issued a few regulatory updates for banks, with the updated Basel implementation timelines being the key among them.
US Treasury Sets Out Principles for Net-Zero Financing
The U.S. Department of the Treasury has recently set out the principles for net-zero financing and investment.
EC Launches Survey on G7 Principles on Generative AI
The European Commission (EC) launched a stakeholder survey on the draft International Guiding Principles for organizations developing advanced artificial intelligence (AI) systems.
ISSB Sustainability Standards Expected to Become Global Baseline
The finalization of the two sustainability disclosure standards—IFRS S1 and IFRS S2—is expected to be a significant step forward in the harmonization of sustainability disclosures worldwide.
IOSCO, BIS, and FSB to Intensify Focus on Decentralized Finance
Decentralized finance (DeFi) is expected to increase in prominence, finding traction in use cases such as lending, trading, and investing, without the intermediation of traditional financial institutions.
BCBS Assesses NSFR and Large Exposures Rules in US
The Basel Committee on Banking Supervision (BCBS) published reports that assessed the overall implementation of the net stable funding ratio (NSFR) and the large exposures rules in the U.S.
