The Central Bank and the Malta Financial Services Authority are to establish a joint financial stability board within days to strengthen the resilience of the financial system and to mitigate the build-up of systemic risk.

The board will be made up of senior officials from the MFSA and the CBM, and will mirror the model adopted by the European Systemic Risk Board, Central Bank Governor Josef Bonnici told the Institute of Directors Conference where he made the announcement on January 17.

Prof. Bonnici said that strengthening the governance and oversight of the financial system is imperative to ensure stability and deliver confidence to the marketplace.

The ESRB is an independent body of the European Union and is part of the European System of Financial Supervision, which ensures the supervision of the EU’s financial system. The ESRB is hosted and supported by the European Central Bank.

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.