The governor of the Central Bank of Malta this morning highlighted the strength of Malta's financial sector, stressing once again that it was different from that of Cyprus.
He also stressed that the crisis in Cyprus created "no impact" for the Maltese sector.
"We are monitoring everyday and what we have seen is normal activity. There were absolutely no abnormal movements," Josef Bonnici said when launching the annual report of the Central Bank of Malta.
He dedicated a substantial part of his presentation to dispelling any myths of similarities between the two Mediterranean islands, pointing out that Malta's banking sector was diversified, sound and robust, with high rates of profitability, liquidity and solvency, better that the Eurogroup indicators in all aspects.
Malta's economy was also doing well, he said, with the number of gainfully occupied increasing even though unemployment figures were also rising slowly due to the rate of economic growth.
Malta also had the lowest exposure to Greece, according to a chart by the International Monetary Fund, while Cyprus had the most.
Malta also had very little exposure to other troubled countries such as Italy, Spain, Portugal and Cyprus. Instead, most of the exposure of Malta was spread out over the UK, France, Australia, Germany and the US.
Prof. Bonnici advised against unwise comparisons that did not distinguish between the various characteristics of different countries.
He said Malta's five core banks were well-capitalised, with a very prudent model and high profitability by international standards. Malta also had very well-funded international banks focused on international transactions with virtually no links with the domestic economy, except for their taxation contribution, which was important for a small economy like Malta's.
"Does this mean we have no work to do? Not at all," he said, stressing that core banks should still increase their loan loss provisions and increase their capital buffers while diversifying their collateral base.
THE LOCAL ECONOMY
Prof. Bonnici also referred to the revised deficit figures, saying this was "not good news" and efforts were needed to reverse the deficit and move towards a balanced budget and surplus.
He spoke about the importance of more efficiency in government expenditure.
He pointed out that Malta's female participation rate has increased by 10 per cent in the past five years, with the Government committed to continuing this growth through incentives and family friendly measures.