Although Malta's economy went into recession last year, in common with most of the rest of Europe, its banking system was virtually untouched by the financial crisis. The reason? It sticks to good, old-fashioned banking principles. Its banks take a largely traditional approach to banking, preferring to act as intermediaries between retail depositors and borrowers, with wholesale funding playing a minor role, and following prudent lending policies. The result: substantial liquidity, adequate capital, no toxic assets, few bad debts... and no bailed out or failed banks.
It came as no surprise to the Maltese, then, when the World Economic Forum's Global Competitiveness Report 2009/10 ranked the soundness of Malta's banking system in 13th place.
