MFSA welcomes conclusions of IMF's Article IV mission consultation with Malta

The Malta Financial Services Authority has welcomed the conclusions of the International Monetary Fund consultations with Malta and said it is fully aligned with the recommendations for improvement articulated in the Article IV Mission Report.

In its conclusion, the IMF called on Malta to improve its anti-money laundering rules in the wake of the COVID-19 pandemic’s adverse social and economic effects. It praised Malta’s overperforming economy, particularly its prudent fiscal policy and timely structural reforms that have boosted jobs and promoted social inclusion.

The IMF also called for stronger supervision inside the Malta Financial Services Authority. “Despite commendable progress, the MFSA remains under strain due to the large number of financial institutions under supervision, the evolving regulatory environment, and challenges associated with new and complex products. The legal framework for bank insolvency should also be updated and streamlined. An administrative regime for the orderly closure and liquidation of a failing bank should be introduced to avoid that supervisory actions are unduly delayed through judicial appeal.”

COVID-19 has created unprecedented challenges for the financial services sector in Malta. While the MFSA remains focused on its long-term priorities, immediate attention has been directed towards protecting the most vulnerable from the repercussions of the pandemic, ensuring the fair treatment of consumers and small firms and keeping capital markets working normally while mitigating the impact of any potential disruptions in financial stability.

In a statement, the MFSA said that, notwithstanding COVID-19, it remains on track in addressing the strategic recommendations of the IMF and other international institutions, which include the strengthening of supervisory effectiveness and AML/CFT oversight, capacity building, technology development and data management.