During 2014 the finance industry in Malta continued to grow and experience high levels of activity and business flow. This emerged from data published by the Malta Financial Services Authority in its Annual Report for 2014, tabled in Parliament yesterday by the Minister for Finance, Professor Edward Scicluna.
Introducing the report, MFSA Chairman Prof Bannister remarked that a key foundation to this renewed success was the Authority's effort towards innovation: "As a country we approach innovation in financial services in a steady, thoughtful, considered and measured way. It is innovation that builds on a sound base of legislation, proven regulation, deep market and product knowledge and well-researched information that gives confidence to consumers, providers and regulators."
Prof Bannister noted how the MFSA's "track record of innovation has helped the industry open up new markets, find more productive ways to utilise capital, widened the range of products available to retail and professional customers and stimulated competition in price, service delivery and product features and benefits."
The Annual Report shows how Malta's financial services sector continued to contribute to economic growth. New licences were issued by the MFSA notably in the payment services, electronic money and in the alternative investment management sectors. New employment opportunities in financial services continued to grow not only within the direct financial intermediation segment but also in other related professionals' services activities. The World Economic Forum's Global Competitive Index 2014-2015 once again gave Malta a high ranking with respect to financial market developments. In this regard, the soundness of banks improved by a further four points placing Malta in 10th position among 144 countries.
2014 was a very challenging year for the Authority, particularly following the establishment of the Single Supervisory Mechanism (SSM) in November 2014, of which the MFSA is an integral part. The SSM aims to ensure the safety and soundness of the European Banking system, increase financial integration and stability and ensure consistent supervision.
The Authority also led a large range of legislative changes and enhancements for the tabling to Parliament in 2015. The purpose of the changes vary and include competiveness measures, improving consumer protection, risk management evaluation and the quality of risk management and governance systems. The latter will greatly strengthen the responsibility of individuals and boards for the proper management of financial organisations. Other legislative actions will affect financial markets and instruments and market abuse measures, credit rating agencies and will see the implementation of EU companies' registry requirements.
The MFSA has steadily and carefully been managing the very big changes that the post-crash EU financial regulation and supervision regime has brought. In 2015 the MFSA will embark on yet another series of profound changes in the way the MFSA is organised particularly with the introduction of a Conduct of Business supervisory regime separate from the prudential one.
The Chairman also highlighted the MFSA's efforts at putting the consumer further into the centre of its operations. Consequently, the MFSA will set out to establish five key pillars of consumer protection reform in 2015. These include an enhanced institutional framework, an improved regulatory framework, stronger implementation, strengthened enforcement and support for other structures, such as the Financial Services Arbiter.
Looking forward, Prof Bannister expressed his belief that the sector will continue to grow. "We can expect further inward investment as Malta consolidates its position as a jurisdiction rooted in the EU and increasingly finds new opportunities in global markets." The Report may be downloaded from: http://goo.gl/BbS6se
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