Connect to share and comment

Malta not comparable to Cyprus: central banker

PlacardEnlarge
(Globalpost/GlobalPost)

Malta's central bank governor defended the eurozone country's banking system on Wednesday, saying that it cannot be compared to that in Cyprus.

In an interview published in local newspaper The Times, Josef Bonnici, said any such comparisons were misleading.

"The problems facing Cypriot banks included losses made on their holdings of Greek bonds, whereas Maltese domestic banks have limited exposure to securities issued by" bailed out countries, he told the newspaper.

Bonnici's comments followed speculation that the banking systems in Malta and Luxembourg were next in line to face the chop because of their huge size relative to the countries' economies.

Reducing Cyprus's outsize offshore banking sector was one of the explicit goals of the so-called troika of international lenders -- the European Union, International Monetary Fund and European Central Bank.

Bonnici, who sits on the European Central Bank Governing Council, said the size of the Maltese banking sector relative to GDP was influenced by a number of institutions that "virtually had no economic or financial links with the economy."

He said the assets of core domestic banks, around 300 percent of GDP, is within normal limits.

mx-ljm/rl/arp

http://www.globalpost.com/dispatch/news/afp/130327/malta-not-comparable-cyprus-central-banker