Like their European counterparts, Maltese banks borrow funds from their national Central Bank (of Malta), which forms part of the European System of Central Banks, and not directly from the European Central Bank, Finance Minister Tonio Fenech told Labour MP Charles Mangion in reply to a parliamentary question.

Dr Mangion had asked about all Maltese banks’ total exposure in foreign securities and how much they depended on the ECB’s enhanced credit support scheme in their foreign investments.

The information laid on the Table of the House by Mr Fenech showed that as at December 31, 2010, the Eurosystem, through the CBM, had lent Maltese banks a total of €1,074.500,000 million. The banks’ portfolio had been made up of bonds worth €1,773.03 million issued by the government and resident entities and bonds worth €12,379.967 million issued by non-resident governments and entities, for a total of €14,152.997 million.

As at November 30, 2010, the total securities portfolio had been €14,840.128 million, made up of bonds worth €1,809.640 million resident and bonds worth €13,030.488 million non-resident. Central Bank borrowings had stood at €1,038.746 million.

Mr Fenech said the figures indicated the aggregate position of the portfolio of investments by all credit institutions operating in or from Malta up to November 2010.

The information was sub-divided between issuers resident in Malta and non-resident. The figures included aggregate data on borrowing from the Central Bank up to November.

On the basis of aggregated data the Malta Financial Services Authority was not in a position to establish if the loans had been given on the basis of the ECB’s enhanced credit support scheme and if such loans had been utilised directly and exclusively for the purchase of foreign securities.

Such investments and other liabilities were utilised in each bank’s overall liquidity management and commercial operations.