As part of its continuing commitment to improve accountability and transparency, the Malta Financial Services Authority (MFSA) today published a document articulating its approach to risk-based supervision.
“This document serves to explain our risk-based approach to supervision, whilst clarifying how safeguards against financial crime risks have been integrated in the process,” commented the MFSA’s Chief Officer – Supervision, Christopher Buttigieg.
A risk-based approach enables the MFSA to better allocate its resources, supervisory programmes and procedures based on the unique risk profile of each firm. “To increase our supervisory effectiveness, we adopt a risk-based approach to supervision which considers prudential, conduct and financial crime risks associated with the firms we oversee,” concluded Dr Buttigieg.
Whilst the aim of this document is to provide an insight into the risk-based approach to supervision adopted by the MFSA, the principles of risk management and mitigation are not limited to supervision but are applied by the MFSA in the exercise of its other core functions, such as authorisation, operations and enforcement.