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Malta Development Bank High Amongst Government’s PrioritiesMEDIA ROOM
April 15, 2015
The Maltese government has actively started looking into the possibility of setting up a Development Bank in Malta. A task force has been appointed to carry out the necessary studies outlining the viability of this initiative. The progress with regards to this project was also mentioned in the Maltese Central Bank’s annual report presented by CB’s governor Josef Bonnici.
The aim of setting up such a bank would be to complement rather than compete with commercial bank activity. The government would be able to delegate certain tasks to this body, particularly ones related to funding and development, including social housing. Particularly in view of the pressing issue that SMEs currently have limited access to funds, as pointed out by DBRS in their report about the Maltese economy, the bank would also serve as the ideal platform to facilitate small businesses’ access to available funding as well as other projects related to strengthening the Maltese economy through supporting the infrastructure.
Josef Bonnici proposed that the bank would be able to raise money by issuing bonds in order to finance projects. This would attract wealth funds who are not interested in investing in projects to buy such bonds.
Taking a look at the wider framework, this seems to be a step in the right direction for Malta, as similar infrastructural development initiatives are currently being undertaken on a continental level in Europe and Asia. Discussions are presently being carried out in relation to the setting up of the European Fund for Strategic Investments (EFSI) and the Asian Infrastructure Investment Bank (AIIB).
As a full EU member and a prospective founding member respectively, Malta is actively involved in these plans and this involvement can pave the way for Malta to effectively carry out a similar initiative on the national level in order to achieve the desired targets for its economic and social progress.