Malta: Financial Sector Assessment Program-Technical Note—Risk Analysis
IMF Staff Country Reports, November 21, 2019
Source details
- Canonical URL
- Malta: Financial Sector Assessment Program-Technical Note—Risk Analysis
Other formats
Bibliographic details
- Published: November 21, 2019
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781513520971.002
Overview
- Presents Malta’s risk-analysis–related aspects of the financial system, complementing the euro area Financial Sector Assessment Program.
- A comprehensive set of stress tests and interconnectedness analyses were conducted to assess resilience and identify potential vulnerabilities.
Key findings
- Banking sector health:
- Banks are well-capitalized.
- Liquidity is ample.
- Profitability has been healthy.
- Solvency stress tests:
- Indicate that the banking sector remains resilient.
- Vulnerabilities are limited to a few small banks.
- Liquidity stress tests:
- The banking sector appears resilient to liquidity pressures.
- Some small banks are vulnerable to more severe events.
- Interconnectedness analysis:
- Contagion risk through interlinkages from within the Maltese financial sector is currently higher and more wide-spread than contagion risk through cross-border interbank exposures.
Policy implications and recommendations
- Monitoring and periodic analysis:
- Monitor and conduct periodic analysis of cross-border linkages to detect accumulating contagion risk.
- Further enhance the existing inter-sectoral linkages analysis to provide early warning before contagion risks accumulate.
Subjects and analytical scope
- Banking; Capital adequacy requirements; Commercial banks; Financial institutions; Financial regulation and supervision; Financial sector policy and analysis; Liquidity stress testing; Solvency stress testing; Stress testing.
- Keywords used in the analysis include: balance sheet, Capital adequacy requirements, cash flow, Commercial banks, core bank, CR, euro area bank, Global, hurdle rate, interest rate, ISCR, Liquidity stress testing, Maltese bank, market share, market value, modified duration, resolution plan, sample bank, Solvency stress testing, Stress testing, U.S. dollar.
Source: Malta: Financial Sector Assessment Program-Technical Note-Risk Analysis (IMF Staff Country Reports, November 21, 2019).
Content in this bundle
- 1mltea2019009