Role of financial services in recovery phase highlighted during FinanceMalta webinar

The role of the Financial Services industry in moving Malta’s economy in a COVID-19 situation was discussed during a webinar organised recently by FinanceMalta and which attracted over 200 online participants.

The event featured keynote interventions from two leading figures in the Maltese economy, namely Dr Gordon Cordina – economist at E-Cubed Consultants, and Kurt Farrugia – CEO at Malta Enterprise. The webinar was introduced by FinanceMalta Chairman Rudolph Psaila, and an address by Parliamentary Secretary for Financial Services and Digital Economy, Clayton Bartolo, followed. Andrea Nurchi, FinanceMalta’s Senior Manager of Business Development, facilitated the discussion.

In his introductory speech, Mr Psaila said that despite 2020 being a challenging year, FinanceMalta has embarked on several initiatives to continue being supportive to its members, potential investors and other stakeholders. He said that these initiatives are based on five key principles, namely innovation, value creation, inclusiveness, internationalisation and being digital.

With regards to the role of Government and the banking sector, he stressed on the crucial role that both are playing in this respect. He added that it is important that banks continue to participate in the Government guarantee schemes and that they support the economy by lending at favourable rates. He also underlined that the capital markets need to continue functioning in an orderly manner so as to provide liquidity to the system and sustain market confidence.

Parliamentary Secretary for Financial Services and Digital Economy, Clayton Bartolo thanked FinanceMalta for playing a key role in bringing together all stakeholders in the industry as well as investors. He said that, despite the significant challenges to the Maltese economy posed be the COVID-19 pandemic, Malta started from a good position in terms of its finances and the country’s positive economic performance. He emphasized that Financial Services play an important role in the recovery phase.

Dr Gordon Cordina delivered a presentation on the importance of Financial Services, saying that the industry is one of the main pillars of Malta’s economy. In 2019 it contributed to around 9% of the country’s Gross Value Added (GVA) when taking into account the multiplier effects. He pointed out that the industry employs 12,230 persons, representing around 5% of the total employed population.

Dr Cordina outlined a number of impacts of COVID-19 on the economy. These included loss in workforce productivity and closure of businesses due to the pandemic and the health measures that needed to be taken. He also mentioned price volatility and unemployment as other negative impacts, alongside the depressed aggregate demand and low base interest rates.

On the other hand of the scale, Dr Cordina argued that the COVID-19 brought about benefits and opportunities as various sectors, including Financial Services, became more digital. As an example, Dr Cordina mentioned banks and said that temporary branch closures, coupled with the increase in digital payments, indicate an eventual move towards a cashless society.

Mr Kurt Farrugia, CEO of Malta Enterprise, outlined the importance of resilience in the management of the economy in such uncertain times. He said that the fact that Malta has a well-diversified economy helped buffer the impact of COVID-19 on Malta. Mr Farrugia said the pandemic has brought about an acceleration of the adoption of technological solutions such as digital payments, online shopping and use of contactless. He concluded by underlining that the Financial Services industry also serves as an important enabler for growth in other economic sectors.

The recording of the webinar is available on the FinanceMalta website, via this link: https://financemalta.org/news/webinar-1-2020-video-presentations/  

FinanceMalta is the public-private initiative set up to promote Malta as an International Financial Centre.