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Financial Services

MFSA publishes document on Financial Supervision

The Malta Financial Services Authority (MFSA) has issued the first in a series of documents regarding financial supervision, specifically targeting banking supervision. These documents aim to highlight the principles and methods by which financial supervisors adhere to, to monitor authorised bodies.


These reports also help put into light the aim and strategy of conducting supervisory work by MFSA officials so that stakeholders understand what underlies financial supervision. This includes safeguarding users of financial services as well as the stability of the market.


Financial supervision is split into four groups:

  • Micro-prudential supervision: focuses on the integrity of individual financial institutions;
  • Macro-prudential supervision: deals with threats to the whole system;
  • Conduct-supervision: focuses on monitoring the means of how the financial services are provided to customers;
  • Integrity of the financial system: includes preventing financial crimes, such as fraud, money laundering, financing of terrorism, and market abuse.


As the CEO ad interim of the MFSA, Christopher P. Buttigieg states, ‘Effective supervision is not a static process but involves continually striving for improvement, efficiency and effectiveness, and responding to new challenges’. This process identifies the risks that hinder financial crime safety and detects weaknesses in the system through analytical reviews. These weaknesses are then addressed through regulatory actions, including remediation plans and cancellation of licences, according to the nature of the case.


Continually striving for improvement entails the financial supervisors to understand and adapt to technology and climate changes, along with the risks and the respective supervising approaches. A case in point is the recent challenges that 2020 had bestowed upon the financial market. The Covid-19 pandemic and Brexit required immediate and new measures to be imposed by the supervisors. Following 380 inspections done by MFSA during 2020, the newly published document highlights the supervisory engagement objective for 2021. Moreover, the report includes the risk-based approach to supervision as adapted by the MFSA, ensuring supervisory engagement interlinked with initiatives that impact stakeholders.


The document can be found on MFSA’s website at