The government has set up a task force to prepare studies on how a Development Bank would operate in Malta, to ensure that it complements – rather than competes with – commercial banks

The progress in setting up the development bank was mentioned by the governor of the Central Bank of Malta, Josef Bonnici, when he presented the bank's annual report.

The task force will need to discuss its proposals with the European Commission as the bank would help to finance SMEs and projects – but must not contravene state aid rules.

Prof. Bonnici said he has his own ideas about how the bank could help the local economy and said it could also take sectors off the government’s books – such as social housing – a tactic which has proved very successful overseas. He also proposed that the development bank could issue bonds to raise money which could then be used to finance projects.

He stressed that while wealth funds might not be interested in investing in projects, they might be interested in buying such bonds.

The governor’s assessment of the economy was positive, noting that Malta’s economy had grown by 13 per cent since 2008, with unemployment declining steadily in 2014 – even though the number of people in employment had risen. He said he was pleased to note that much of the growth had come from public and private investment.

With regards to bank lending rates – which he has been criticising for some years – he presented proof that these had now gone done and that while these still higher than the eurozone average, the gap was narrowing.

The Governing Council of the European Central Bank will be held in Malta next October, for the first time.