Shadow finance minister Tonio Fenech said the Bill was important as it continued to build on the framework the EU felt was needed to respond to any potential future crisis. The Opposition would support the Bill.

All countries needed the tools with which to respond to the instability that arose. The Bill gave the government the opportunity to set up a resolution fund and, should it be a case of insufficient reserves, the issue could be brought to Parliament and a loan requested for the fund to be established.

This granted a certain measure of stability and avoided anyone saying Malta did not have the instruments needed to deal with any crisis that might arise.

The idea was to have a central fund, with the aim of eventually having enough money raised by banks to face any similar circumstances. The contribution by each bank was directly linked to its size and the directive mentioned one per cent of deposits. Would that be enough, Mr Fenech asked.

Malta’s banks had been certified as being strong and that was thanks to a strong supervisory structure.

Mr Fenech said he feared the single rule book could never replace the relationship between a banker and a borrower, where the former had the knowledge of whether it was safe to grant a certain loan.

That could leave an impact when it came to banks providing liquidity to SMEs, which was not right when they were not the cause of the financial crisis.

He urged for the avoidance of a one-size-fits-all attitude.