In an earlier seminar, held back in June 2008 he spoke on the same subject, when he stressed that the effects of the financial turmoil on emerging international markets were of concern to Malta and not something he could afford to be complacent about. He said that since June the Maltese government has worked alongside the Central Bank and the Financial Services Authority to ensure the preservation of financial stability.

He remarked:

”The Central Bank of Malta, the Malta Financial Services Authority and my Ministry have been in constant touch with the market since the first signs of the turmoil emerged, monitoring banks for any possible signs of weakness that could justify the need for pre-emptive action to be taken. I am pleased to note that to date no signs of stress have been detected.

”The main financial players in Malta have also been very co-operative during this global crisis and I confirm what the Governor of the Central Bank stated - that we have a strong domestic banking system characterized by a capital adequacy ratio which is well above the statutory minimum, a strong liquidity ratio, a prudent loan-to-deposit ratio, well diversified portfolios, and non-performing loans on a downward trend. In fact, the situation today remains the same as the IMF confirmed in their latest assessment last June.

”On a European level there has been an unprecedented effort by all governments in a coordinated manner to address the need to support troubled financial institutions and thus ensuring the proper functioning of the financial system. Many have misunderstood this effort as merely supporting troubled banks and have used this argument to justify their expectations that Government should do likewise to other sectors. The stability of the financial system is a common good that cannot be considered in the same way as for other sectors. The financial system is the arterial system channelling the blood flow of the body: without a stable system we cannot have a well functioning economy. Failure in the Maltese financial system will place savings in jeopardy and will diminish our jurisdiction's credibility.

”The decision to increase the level of protection afforded to depositors in Malta to EUR100,000 at the beginning of October, was intended to give depositors additional peace of mind and maintain confidence in our banking system and in the institutions that monitor and regulate them. This was also done in a coordinated manner with many of our EU counterparts.

“We are now ready, together with the Central Bank and the MFSA, to meet the Commission’s proposals to strengthen the Maltese Depositor Compensation Scheme by the end of 2009, but sooner rather than later. We have achieved a place among the ten soundest banking systems worldwide according to World Economic Forum, and we want to improve this position in real terms. Ultimately, this is the surest signal that our systems are robust and that depositors can trust our financial institutions.

”Our banks were able to ward off the difficulties faced by many of their international counterparts thanks to the unshaken faith that clients, your depositors and borrowers, placed in your institutions. Ultimately they are the backbone of your success and ongoing very positive performance, even in these times of international economic weakness.

”In this vein, I also welcome the role played by the European Central Bank in providing additional liquidity to the financial market system and in its use of monetary policy tools in reducing interest rates by a further 75 basis points, that is 175 basis points since October 2008. I will therefore join the Governor in stating the government’s expectation that bank customers should benefit fully and unreservedly from ECB rate cuts. To do otherwise would betray your own customers and in my opinion would be very short sighted.

”The financial services industry remains the hallmark of the success being achieved by our economy. This industry continues to increase its contribution towards economic growth and job creation in spite of the difficult international situation. By September of this year, 38 new licences were issued to financial and credit institutions, 134 trusts and 96 authorised trustees, 28 to insurance companies, 647 insurance managers, brokers, agents and intermediaries, 84 fund administrators and investment services, and 387 collective investment schemes.

”The government remains committed to the further expansion and growth of the financial services industry with the aim of establishing Malta as a reputable global centre of excellence.”

”Our dynamic and well functioning financial sector has been hailed internationally and is set to continue to play a fundamental role in the future sustainable development of our economy through the provision and creation of value-added employment and the attraction of more investment to our shores. This will assist Government in the realisation of its Vision 2015 of having financial services contribute as much as 25% to our GDP.

”The key message I would like to give this evening is not one of optimism but one of realism, we are not going to pass through easy times, but as a government we intend to make every effort to ensure that we continue generating the right economic environment to foster economic growth, to generate demand, and thus safeguard jobs. There is no medicine to this crisis except confidence. Confidence that is so hard to build but so easily lost.

”We will pass through it, we may face for some time a lower demand for our exports, but they too will come, as the world will soon realise that at the end of the day there are still billions of consumers out that will demand food, commodities, products, services until the wheel sets in motion again. In the meantime we have set in motion an investment programme which we believe can fill in the gap, and help us pass through this phase reasonably sound and allow me to say better to face the future of today we make the right choices.”