27/02/2025 14:26:00

Central Bank of Malta holds its annual Forum for Financial Stability

The Central Bank of Malta held its Forum for Financial Stability on 27 February 2025 at Binja Laparelli. The Forum, which is an annual event, unites key stakeholders from the financial services sector to discuss emerging challenges and developments shaping domestic financial stability. The Forum is chaired by Mr Alan Cassar, Chief Officer Financial Stability and Statistics.

In his opening remarks, Mr Oliver Bonello, Deputy Governor for Financial Stability of the Central Bank of Malta, stated that "macroprudential policy plays a crucial role in ensuring adequate resilience of the financial system. This is particularly so in the case of Malta, where the low pass-through of monetary policy had limited impact on moderating the credit cycle particularly in respect of the mortgage market where credit continues to expand at a rapid pace, supporting high inflation in this market."

Dr William Gatt Fenech, Manager of Financial Stability Research Office, followed with a presentation related to the complexities of setting risk thresholds to identify periods of high cyclical risk, in the absence of crisis periods in the sample.

Ms Wendy Zammit, Head of the Financial Stability Surveillance and Research Department, gave a presentation on the key financial stability risks and vulnerabilities. She distinguished between risks arising from the external environment and those inherent to the system, while Ms Christine Balzan, Manager of Policy, Crisis Management, and Stress Testing Department discussed the implications for macroprudential policy.

From left: Dr William Gatt Fenech, Ms Wendy Zammit, Mr Alan Cassar, Deputy Governor Mr Oliver Bonello,
Mr Stephen Attard, Ms Christine Balzan, Mr Andrew Spiteri

The audience was then addressed by Mr Andrew Spiteri, Manager of Financial Stability Surveillance Office, where he summarised the results of a Central Bank of Malta's survey to assess the level of 'greenness' in banks' securities and loan portfolios.

In his closing remarks, Deputy Governor Mr Bonello remarked on the importance of keeping policy measures updated to safeguard the stability of financial system and referred to the pivotal role that financial institutions play in advancing the sustainability agenda and how climate risk considerations are increasingly being integrated into business models.

Photos: Melvin Bugeja/Central Bank of Malta

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