The Central Bank and the Malta Financial Services Authority (MFSA) decided to establish a joint financial stability board to strengthen the resilience of the financial system and to mitigate the build-up of systemic risk.
The objective of the board is to strengthen the resilience of the financial system and mitigate the build-up of systemic risk. It will be made up of senior personnel from the MFSA and the CBM, and will mirror the model adopted by the European Systemic Risk Board (ESRB), Central Bank Governor Josef Bonnici told the Institute of Directors Conference where he made the announcement.
The ESRB is an independent body of the European Union and is part of the European System of Financial Supervision (ESFS), the purpose of which is to ensure the supervision of the Union’s financial system. The ESRB is hosted and supported by the European Central Bank.
Prof. Bonnici said that strengthening the governance and oversight of the financial system is imperative to ensure stability and deliver confidence to the marketplace.
Institute of Directors chairman James Satariano said the timing of Prof. Bonnici’s announcement at the IOD’s first conference of the year, demonstrates that corporate governance is not standing still locally and is fully in step with developments across Europe.
The JFSB will be responsible for supervision of stability within the financial system at the macro level, as well as oversight. The purpose of the oversight is to prevent emergence of systemic risks to Malta’s financial stability and mitigate their impact as well as support financial sector consideration of macro-economic developments.