In a circular issued following the press release published by the European Central Bank (“ECB“) on 12th March[1], the MFSA informed licensed credit institutions and the general public that the measures introduced by the ECB in terms of the aforementioned press release are to apply in their entirety to all credit institutions licensed under the Banking Act (Chapter 371 of the laws of Malta) with immediate effect and until further notice.
These measures include the following:
- Banks can fully use capital and liquidity buffers, including Pillar 2 Guidance;
- Banks will benefit from relief in the composition of capital for Pillar 2 Requirements; and
- ECB is to consider operational flexibility in the implementation of bank-specific supervisory measures.
The MFSA further announced that it will constantly be monitoring the effects of the challenges posed by COVID-19 on credit institutions, and credit institutions are required to ensure that they are capable of co-operating with the MFSA in discharging their regulatory duties with regard to its monitoring and response framework.
The full circular may be accessed through the following link: https://www.mfsa.mt/wp-content/uploads/2020/03/Circular-to-Credit-Institutions-on-Temporary-Capital-and-Operational-Relief-in-Reaction-to-Coronavirus-COVID-19.pdf
[1] The full press release may be accessed through the following link: https://www.bankingsupervision.europa.eu/press/pr/date/2020/html/ssm.pr200312~43351ac3ac.en.html
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Disclaimer |
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This document does not purport to give legal, financial or tax advice. Should you require further information or legal assistance, please do not hesitate to contact Dr. Michael Psaila on Michael.Psaila@mamotcv.com |