On the 16th of April, FitchRatings, a global rating agency, published an article titled: “Malta Does Not Face Same Bank System Risks as Cyprus” which describes how little the two countries’ banking sectors have in common. Citing FitchRatings on the matter: “The differences between the Maltese and Cypriot banking systems far outweigh the similarities, meaning the Maltese banking sector does not present the same level of risk to the sovereign that was seen in Cyprus”. FitchRatings came to this conclusion by comparing the size of the Maltese and Cypriot banking sectors, their funding sources, asset quality and capitalisation.
Adding weight to FitchRatings’ statement, Standard & Poor’s, a leader of financial-market intelligence, released two weeks ago an analysis titled: “Small Countries, Big Banking Systems: How Malta And Luxembourg Differ From Cyprus”. This report emphasises on the reasons of the Cyprus’ bailout - which are not shared with their Maltese counterpart - or any other European country for this matter: “Standard & Poor’s Ratings Services believes that the combination of factors behind Cyprus’ difficulties is not currently likely to be replicated elsewhere in Europe.”
To read the FitchRatings summary article please click here and to access the full Standard & Poor’s report please click here.
Camilleri Preziosi has been analysing the economics of the two bank sectors and the results of our assessment can be accessed by clicking here.