IMF published several technical notes under the Financial Sector Assessment Program (FSAP) on Malta. The technical notes cover various topics in the banking and insurance sectors such as banking, insurance, and securities sector supervision; macro-prudential policy framework and tools; risk analysis; and bank resolution and crisis management. The notes also cover analysis of the anti-money laundering and combating the financing of terrorism (AML/CFT) regime in Malta.
The following are the key highlights of the various technical notes:
- Technical Note on Banking Supervision. This note presents assessment of the FSAP mission of banking supervision based on discussions that took place during the 2018 FSAP mission in Malta. The analysis took into consideration the legal and regulatory framework in place, the supervisory practices employed, and other conditions as they existed in September 2018. The mission focused on selected topics in relation to the supervision of less significant institutions, which are not directly supervised by ECB, and on non-EU branches.
- Technical Note on Insurance and Securities Sector Supervision. This note reviews the institutional arrangements and effectiveness of supervisory practices for the insurance and securities sectors in Malta. The review covers the governance, powers, operational independence, and supervisory resources of MFSA. The evaluation is benchmarked against the relevant Insurance Core Principles established by IAIS and the Objectives and Principles of Securities Regulation promulgated by IOSCO. The scope of review for the securities sector is limited to investment funds and securities firms.
- Technical Note on Macro-Prudential Policy Framework and Tools. This technical note evaluates the domestic macro-prudential policy framework in Malta and provides recommendations to strengthen the framework. It assesses the domestic institutional arrangements, systemic risk monitoring framework;, and macro-prudential policy toolkit. It also assesses the current financial vulnerabilities in Malta, with the aim to develop specific policy recommendations.
- Technical Note on Risk Analysis. The note presents results of the solvency stress test, including sensitivity analysis, discusses liquidity stress test using three complementary approaches, and analyzes the contagion risks from both cross-sectoral and cross-border perspectives. This note also discusses the household stress tests. To address vulnerabilities in the banking system, this technical note provides policy recommendations that are based on findings in the stress tests and risk analysis and are aimed to strengthen resilience of the banking system in Malta.
- Technical Note on Bank Resolution and Crisis Management. This note analyzes the bank failure mitigation and resolution regime in Malta as well as arrangements for preparing for and managing a financial crisis. It assesses the supervision of bank recovery plans, early intervention when problems are identified, resolution planning, resolution funding, and deposit insurance. It summarizes the findings of FSAP mission undertaken during September 10 to 26, 2018. It also considers recovery and resolution planning for significant insurers with links to banks. The assessment presented in this note is based on an analysis of the legal framework and documentation related to policies and procedures and on discussions with, and representations made by, the authorities and the private sector.
- Technical Note on AML/CFT. This note sets out the findings and recommendations of FSAP for the Republic of Malta in the areas of AML/CFT. It summarizes the findings of a targeted review of several aspects of the progress of Malta in addressing AML/CFT vulnerabilities in the financial sector, specifically the banking sector.
- Banking Supervision
- Insurance and Securities Sector Supervision
- Macro-Prudential Policy Framework
- Risk Analysis
- Bank Resolution and Crisis Management
- AML/CFT Regime
Keywords: Europe, EU, Malta, Banking, Insurance, Securities, Stress Testing, Macro-Prudential Policy, Less Significant Institutions, AML/CFT, FSAP, Resolution Planning, Crisis Management, MFSA, IMF
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