An academic paper, titled “Non-bank financial intermediation in Malta”, penned by the MFSA Chief Officer Supervision, Christopher Buttigieg, and MFSA Analysts within the Financial Stability Function, Mariana Gkoutse and Theresa Fenech, has been published in the Law and Financial Markets Review Journal. The paper presents a first estimate of the size of Non-bank financial intermediation (NBFI) in Malta as well as the regulatory implications for its monitoring.

Based on extensive research and analysis of information from various reports, articles, websites and other sources referenced throughout the paper, it transpires that NBFI in Malta is not only small, but also subject to significant EU and national regulation. Given the benefits that the real economy could gain from NBFI, the main challenge for the regulators is to strike a balance between the optimisation of their benefits and the minimisation of potential losses due to the build-up of risks emanating from this sector.

The assessment is based on the narrowing down approach introduced by the Financial Stability Board. The paper also provides an extensive review of the EU and national regulatory framework within which NBFI entities operate, listing also the challenges arising from this sector.

Users subscribed to the academic journal can view the full paper here.