Ensuring financial stability
Safeguarding financial stability is a core function of central banks. A sound and stable financial system is conducive to the efficient conduct of monetary policy. In terms of Article 5 of the Central Bank of Malta Act, the Central Bank of Malta is responsible to ensure the stability of the financial system. In fulfilling this statutory obligation, the Bank plays a key role in maintaining the stability of the domestic financial system, whilst contributing to that of the euro area.
In view of its function of lender of last resort, Article 17(1)(g) of the Central Bank of Malta Act empowers the Bank when it deems necessary, to grant loans or advances, in exceptional cases, to any credit institution incorporated in Malta against such forms of security as the Board of the Bank may consider appropriate.