Malta Commonwealth Third Country Programme
TRAINING WORKSHOP ON BANKING AND FINANCE IN SMALL STATES
Valletta, Malta: 16-20April 2012
FINAL STATEMENT
The participants of the Workshop on Banking and Finance in Small States, held at Valletta, Malta, between 16 and 20
April 2012, having discussed a number of banking and finance issues, including international and domestic regulatory
frameworks (Basel III), risk management policies and practices, stress testing methodologies, monetary and exchange
rate policies, financial market development, and other themes of major interest to small jurisdictions;
1.
Recognise that banking and finance have large and multifaceted impacts on the economy of many small states and
that the soundness of this basic sector is crucial for economic development and resilience building.
2.
Recognise that the development and deepening of financial sector in small states pose special constraints,
irrespective of the stage of their economic development.
3.
Are aware that sound economic fundamentals, appropriate monetary policy frameworks and financial stability are
essential to promote the development of financial sector.
4.
Recognise the need for concerted supranational action to curtail contagion of financial crises especially in the
context of small states.
5.
Are aware of the necessity of sound regulations, monitoring and control mechanisms over international financial
businesses, and the dangers associated with laxity in risk-based supervision and strategy.
6.
Note the benefits and disadvantages of separating the monetary policy function from the financial regulatory
function to promote macroeconomic and financial stability.
7.
Note the importance of risk management techniques such as stress testing in assessing the stability of the financial
system. Small states should seek support that assists them in developing and customise risk management
techniques to their size and particular characteristics.
8.
Recommend that authorities of small states should make every possible effort to promote good governance and to
adopt procedures to prevent money laundering and terrorism financing, and comply with international standard
disclosure requirements in order to ensure good reputation.
9.
Recommend that in line with a consultative and co-operative multilateral approach, regulatory authorities
expeditiously study the impact of international regulation (Basel Accord and IFRS) on small states and
unsophisticated banks, and present findings of such studies at international fora for consideration. Technical
assistance is needed for small states in the area of capacity building and research on the policy issues such as Basel
Accord and other international standards.
10. Support the promotion of international networking among institutions and individuals concerned with banking,
finance and offshore activity, with the objective of fostering research and training activity on matters of direct
interest to islands and small states.
11. Express their gratitude and appreciation for the initiative and support offered by the Commonwealth Secretariat,
the Ministry of Foreign Affairs of Malta and the Islands and Small States Institute in organising the workshop.