The banking crisis in Cyprus : a warning shot for Malta?

Abstract

This study looks into the recent Cypriot banking crisis and the Maltese banking structure. The objective of this study is to study the exposures Maltese banks face and discuss whether a crisis similar to that which happened in Cyprus is likely to happen in Malta. In order to investigate this, this study assessed the similarities and differences between the two banking structures in order to understand the major exposures which could lead to a crisis in Malta. Throughout this study various sources were used to obtain the most significant information available. After assessing this information, a questionnaire was structured and distributed amongst practitioners in the Maltese financial services industry. From their responses an analysis was constructed from which various conclusions were extracted. From this study it was concluded that what happened in Cyprus is not likely to happen in Malta but it should be used as a warning shot; lessons should be learnt from the Cypriot experience as to avoid possible similar situations in Malta.