There are no economic indicators which point to a looming recession in Malta, Central Bank Governor Michael Bonello tells The Sunday Times in an interview today.

Nevertheless, the Governor says that a very open economy depends on external demand and it is only natural that the country will be affected.

Mr Bonello, who is also a member of the European Central Bank board of governors says that nobody can envisage the end of the international financial crisis which has wreaked havoc in several markets worldwide.

However, local banks are not direct threatened by the international financial crisis, he insists. Banks are not directly exposed, but if the economy slows down, certain borrowers might be overextended and there might be an increase in non-performing loans.

The Governor also talks about the debts and savings habits of the Maltese, and says that on average, households have considerably more assets than liabilities, which suggests that household debt is within sustainable levels.

Read the full interview in today's edition of The Sunday Times. Excerpts are carried in the video above.