To blame all on-boarding failures only on an ultra-conservative banking sector is simplistic and counterproductive. Reality is more complex than that and the causes might vary from the risk appetite of the European supervisory landscape that follows a common rule book, to problems of asymmetric information, complex corporate structures or business models. Unless we get down to this level, we can never really pass judgement on the actions of banks regarding who they on-board. Banking is all about risk management and banks with a zero risk appetite will eventually starve and be forced out of the market. Such risk aversion should not come at the expense of the right of all citizens to access basic banking services, as this will fuel financial and social exclusion. Banks should therefore be encouraged to use their judgment and sense of proportion when exercising due diligence, and to consider their responsibility given their pivotal role in the financing of the economy. Although certain AML/CFT vulnerabilities had already been identified at a national level and actions were already underway and although the Authorities pledged their commitment to fully address these issues, the Moneyval report has set targets that we must reach. Financial systems trade in confidence and credibility and unless we address these shortcomings, we will be unable to develop our sector further.
In July, the Central Bank of Malta joined the Network of Central Banks and Supervisors for Greening the Financial System, a collaborative structure that aims to green the financial system and strengthen the efforts of the financial sector in achieving the Paris climate agreement goals. This includes mobilising capital for green and low-carbon investments. Staff members have joined work streams to further research in this area and adopt a number of proposals. Furthermore, the Central Bank of Malta is also represented in the Sustainable Advisory Committee of the Bank for International Settlements and is working in aligning our international portfolio towards holding more green bonds. Page | 6