In his weekly video blog, Finance Minister Prof. Edward Scicluna talks about the effect of a financial instability in an economy and how it could lead to devastating financial losses across all levels of society – including families and pensioners.

He explains that despite European member states’ existing regulatory frameworks, the EU was not impervious to financial instability, and said that the crisis experienced over recent years would be a learning experience that leads to the improvement of existing regulations to avoid similar situations in the future.

Prof. Scicluna also explains that the latest European institution to be born from the need for better and more robust regulation is the European Systemic Risk Board – an independent institution specifically created to monitor systemic risks that could threaten multiple European member states with financial instability.

Prof. Scicluna also explains that another development is that EU member states are being called upon to establish boards or entities that similarly monitor potential risks or threats to financial and economic stability within their own respective countries.

This has given rise to a Memorandum of Understanding between the Finance Ministry, the Malta Financial Services Authority, and the Central Bank so the three institutions can come together  to share expertise and perspectives and attentively monitor Malta’s financial and banking sectors.

Prof. Scicluna emphasises that such monitoring is essential to ensure that the country’s financial stability is safeguarded.

– Monday, 8th July, 2013