BANKING AND FINANCE IN SMALL STATES: ISSUES AND POLICIES

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1 Malta-Commonwealth Third Country Training Programme BANKING AND FINANCE IN SMALL STATES: ISSUES AND POLICIES Valletta, Malta April 2006 Organised by The Islands and Small States Institute at the Foundation for International Studies, Malta in collaboration with the Department of Banking and Finance of the University of Malta Sponsored by the Commonwealth Fund for Technical Co-operation Commonwealth Secretariat, London and the Malta Co-operation Programme Ministry of Foreign Affairs, Malta

2 WORKSHOP INFORMATION Dates, Venue and Organisation The workshop will take place in Malta, between 17th to 28th April 2006 at the Foundation for International Studies, St Paul Street, Valletta. It is being organised by the Islands and Small States Institute in collaboration with the Banking and Finance Department of the University of Malta. The workshop is sponsored by the Commonwealth Fund for Technical Cooperation of the Commonwealth Secretariat and the Malta Cooperative Programme of the Ministry of Foreign Affairs. The programme, spread over two weeks, will consist mainly of presentations by resource persons on different aspects of the main theme, and country presentations by the participants. These will all be followed by discussion. In addition, field visits to relevant institutions in Malta will be organised. There will also be a social programme including a welcome reception on the first day of the workshop, an excursion to the Medieval city of Mdina with guide, a cultural visit to Valletta, a day trip to the Island of Gozo and dinner at the end of the programme. Workshop Objectives The aim of the workshop is to disseminate knowledge and provide training on banking and finance, covering a variety of themes with a focus on small states. Another objective of the workshop is to enable the participants to benefit from the sharing of ideas and experiences during discussions. Target Participants The workshop is primarily intended for officials, at senior and middle management levels, operating in the private sector and public sector institutions. Participants should normally be nominated by the national governments and sponsored by the Commonwealth Fund for Technical Cooperation. A limited number of self-funded participants can also participate. Country Presentations Each participant will be expected to present a brief paper about his/her respective country, describing the banking and financial sectors. A number of sessions will be assigned for these presentations. These presentations will serve as case studies of the characteristics and structures as well as the constraints and opportunities in the respective countries, and should include a section on the implications of these for future policies and strategies. Language of Instruction The course will be conducted in English, and all participants are expected to have a good working knowledge of the English language. Certificates Certificates of attendance will be awarded to those participants who complete the entire programme. The certificates will be issued by the Islands and Small States Institute of the Foundation for International Studies at the University of Malta, together with the Commonwealth Fund for Technical Cooperation (CFTC) and the Ministry of Foreign Affairs.

3 TERMS OF THE AWARD Candidates Accepted for Sponsorship Candidates who are accepted for sponsorship under the terms of the Malta-Commonwealth Third Country Training Programme and the Commonwealth Fund for Technical Cooperation (CFTC), will have their course fees and hotel accommodation on bed and breakfast basis paid for them. In addition they will receive a subsistence allowance of Lm200 for the duration of the programme. The selected participants themselves, or their employer or the nominating Government, will be responsible for their air fare to and from Malta. Telephone calls, fax messages, drinks at the hotel bar and other personal expenses are to be borne by the participants themselves. Self-funded Applicants Persons who do not qualify for sponsorship under the Malta-Commonwealth Third Country Training Progamme may still apply to join the course and will be charged a fee of Lm250 to cover tuition, course documentation, lunches and the social programme. Interested persons are to contact the Islands and Small States Institute (see contact details below). Applications and Nominations In order to apply for the award, nominated applicants must complete the appropriate nomination forms (GID/1 Form) and send them to the Director, Governance and Institutional Development Division (GIDD) of the Commonwealth Secretariat copied to the Director of the Islands and Small States Institute, not later than 31st March Acceptance of such nominations will be decided by an Admissions Board composed of the Director of the Islands and Small States Institute, a representative of the Ministry of Foreign Affairs, Malta and a representative of the University of Malta. The Board will operate in consultation with the Commonwealth Fund for Technical Cooperation. Applicants must be nominated through the Governance and Institutional Development Division's Point of Contact (POC) in their own country. All application forms should be duly endorsed by the POC and should be forwarded to: The Director, Governance and Institutional Development Division Attention: Mrs May Caplin Programme Assistant, Governance and Institutional Development Division Commonwealth Secretariat, Marlborough House, Pall Mall, London SW1Y 5HX, UNITED KINGDOM Tel: (44) ; Fax: (44) / Copies of the application and nomination forms should also be sent to: The Director, Islands and Small States Institute, Foundation for International Studies, University Building, St Paul Street, Valletta, VLT 07, Malta. Tel/Fax: (356) ;

4 PROGR Sunday 16 April Arrival of participants Monday 17 April Opening session and welcome speeches Short break Monday 17 April MONETARY POLICY AND FINANCIAL STABILITY IN SMALL STATES Monetary Economics in Small States Interest Rate Policy in Small States Financial Stability Issues for Small Island States Coffee Break Exchange Rate Policies in Small States Housekeeping notices and settlement of per diem Welcome Drinks at the Foundation for International Studies 2000 Return to Hotel Tuesday 18 April FINANCIAL SECTOR DEVELOPMENT IN SMALL STATES AND THE INTERNATIONAL ARENA Smallness, Vulnerability and International Market Access Financial Sector Integration within a Monetary Union Recent Developments in EU Financial Legislation Visit to the Central Bank of Malta, Valletta. Wednesday 19 April FINANCIAL SECTOR DEVELOPMENT IN SMALL STATES AND THE INTERNATIONAL ARENA (CONT) Discerning Future Financial Crisis: The Law and Institutional Based Dimensions The International Money Laundering Control Process The Impact of the New Basel Accord on Islands and Small States Visit to the Malta Financial Services Centre, Attard. Thursday 20 April COUNTRY PRESENTATIONS Country Presentations by Participants Three Country Presentations by Participants Lunch Country Presentations by Participants Friday 21 April FINANCIAL SECTOR REGULATION IN SMALL STATES Banking Regulation and Monetary Policy Deregulation of the Financial Market Experiences of Financial Liberalisation in Malta International Financial Crime Coffee Break Implementation of a Deposit Protection Scheme: The Case of Malta Overview of week s work Saturday 22April Excursion with guide Sunday 23 April FREE DAY Day Trip to the Island of Gozo (optional)

5 AMME Monday 24 April INSTITUTIONAL DEVELOPMENT OF THE FINANCIAL SECTOR IN SMALL STATES The Role of the Financial Regulator Visit to the Malta Stock Exchange, Valletta The Stock Exchange in Malta Coffee Break The Insurance Market Preliminary Discussion on Final Report Tuesday 25 April COUNTRY PRESENTATIONS Country Presentations by Participants Country Presentations by Participants Visit to HSBC Head Offices, Marsa. Wednesday 26 April ASPECTS OF THE MANAGEMENT OF FINANCIAL INSTITUTIONS IN SMALL STATES Staff training and Personnel Management Issues Internal Audit Function and Corporate Governance The Development of Relationship Banking Visit to Bank of Valletta Head Offices, Sliema Thursday 27 April FINANCIAL INVESTMENT IN SMALL STATES The Insurance Market Risk-Management Instruments Coffee Break Investment Alternatives in Small States Investing in Small States Coffee Break Investing in Small States: The Case in Malta 2000 Conference Dinner Friday 28 April CONCLUDING SESSION A Small Island State in the EU: Issues Arising from a Banking Regulator s Perspective The Protection of the Financial Consumer Services Coffee Break Evaluation of Workshop and Conclusion Lunch Break Presentation, Discussion and Adoption of Final Report Concluding remarks and Presentation of Certificates 1700 Transport to Hotel Notes All lecture and discussion sessions will take place at the Aula Magna of the Foundation for International Studies, University Building, St Paul Street, Valletta. Transport will be provided from the Hotel to the Foundation for International Studies every morning and back to the hotel every evening. Transport in connection with the visits to the institutions will be free of charge. All lectures and discussion sessions will be conducted in the English language. Refreshments during coffee breaks and lunches are free of charge.

6 TRAVEL & ACCOMMODATION Travel Participants should hold a valid entry visa before they arrive in Malta. Participants who intend to stop over in a third country on their way to Malta are also advised to obtain the required transit visas before leaving their country. Participants are required to arrive in Malta on the date as designated by the Commonwealth Secretariat. Visas Participants are to check whether they need an Entry Visa for Malta and to make the necessary arrangements in good time for the visa to be issued before they travel. Details as to how one should apply for a Visa to enter Malta, and a Visa application form can be obtained from the following website: These details can also be obtained from the Islands and Small States Institute. Arrival/Departure Transfers Participants are to inform the Islands and Small States Institute about their arrival and departure time, dates and their flight number. The Institute will arrange reception at the airport and transfers from the Airport to the Hotel. Insurance Participants are advised that before coming to Malta, they should secure overseas travel, accident and health insurance cover for the duration of their stay in Malta. Hotel Accommodation Participants will be accommodated in a hotel on bed and breakfast basis. Transport will be provided from the hotel to the conference venue and back. Programme Changes The Islands and Small States Institute reserves the right to effect changes to the programme and to cancel the programme altogether should there be insufficient number of registrations. Map of Valletta and Location of the Foundation for International Studies FIS Foundation for International Studies St. Paul s Street

7 THE ORGANISERS The Governance and Institutional Development Division (GIDD) of the Commonwealth Secretariat The role of the GIDD is to help governments and the private sector strengthen their structures of governance and administration. Its activities are informed by the values of democracy, good governance, human rights, gender equality and a more equitable sharing of the benefits of globalisation. Often in collaboration with other Commonwealth Secretariat divisions, the GIDD provides advisory services, experts and training. It also runs the Commonwealth Service Abroad Programme (CSAP), which deploys skilled volunteers to promote peoplecentred programmes. The GIDD provides a range of technical assistance to help governments reform their public services. Each programme is tailored to the needs of the country or region. It also supports institutions of governance and facilitates democratic oversight. It helps develop and strengthen parliamentary committee systems and Ombudsman offices, as well as bodies to promote human rights and to combat corruption and moneylaundering. The GIDD provides project managers, engineers, scientists and technicians in environmental management and physical infrastructure. Empowering women and vulnerable people is a key part of GIDD s work. With other divisions of the Commonwealth Secretariat, GIDD promotes women s participation in governance and ensures that they benefit from development. MTSD targets its training at the specific skills needs of senior and mid-level officials, managers and technologists, through specialist group training programmes, work attachments of study visits. Each year, some 3000 people receive support for education and training in over 3000 institutions, mostly in the Commonwealth developing countries. Special attention is paid to providing women with increased opportunities for advancement. The Malta Co-operation Programme The Malta Co-operation Programme provides the means for Maltese professionals to share their experience and skills with participants from developing countries and small states with limited human resources. Having attained, over the years, a high degree of competence in human resources development, and fully supportive of the Commonwealth's efforts in the field of development training, Malta has embarked on the Third Country Training Programme. Under this scheme, specialised training has been delivered in the fields of information technology, education planning in small states, port management and insurance management. The Malta-Commonwealth Third Country Training Programme marks the transition from technical assistance to mutual co-operation between Malta and its Commonwealth partners. This programme of cooperation is jointly funded and administered by the Ministry of Foreign Affairs and the Commonwealth Secretariat, and was formally established in 1995 as a programme to train senior to middle level personnel from developing countries of the Commonwealth. The Islands and Small States Institute The Islands and Small States Institute forms part of the Foundation for International Studies which is the international arm of the University of Malta. The Institute is located in the old University Building in Valletta. The Institute was established in 1989 with the aim of promoting research and training on economic, social, cultural, ecological and geographical aspects of islands and small states. The Institute organises international conferences, training workshops and seminars on themes related to its overall aims. It runs programmes leading to the MA, MPhil and PhD degrees in island and small states studies. It also operates a network of communication between institutions and individuals engaged in research and training related to the aims of the Institute and undertakes consultancy assignments for international organisations. The Institute publishes Occasional Papers on Islands and Small States (ISSN ) and collaborates with the Scientific Council for Island Development, based at UNESCO, in the publication of Insula, the International Journal of Island Affairs (ISSN ) The Institute also collaborates in the publishing of books with major publishers notably Cassell/Pinter of London (Islands Series). An important contribution made by the Institute was the construction of the economic vulnerability index. The Institute is directed by Professor Lino Briguglio. The day-to-day administration of the Institute is carried out by Ms Maryrose Vella assisted by Ms Romina Carabott and Mr Michael Debattista. The Department of Banking and Finance of the University of Malta The Department of Banking and Finance, which is collaborating in the organisation of this programme, forms part of the Faculty of Economics, Management and Accountancy (FEMA) of the University of Malta. The Department, together with other departments within FEMA, offers banking and finance areas of study for general, honours and masters degrees. The Department is located at the New Humanities Building, at Tal-Qroqq Campus. The University of Malta traces its origins to the founding of the Collegium Melitense in It was originally located at Valletta, but in the sixties, it established its main campus at Tal-Qroqq, Msida. There are about 9000 students including about 700 foreign students, following full or part-time degree and diploma courses, many of them run on the modular or credit system. The degree courses at the University are designed to produce highly qualified professionals, with experience of research, who will play key roles in industry, commerce and public affairs in general. Associated with the University are the Mediterranean Academy of Diplomatic Studies and the Foundation for International Studies, while the campus is also home to the IMO International Maritime Law Institute and the International Ocean Institute (Malta Operational Centre).

8 THE MALTESE ISLANDS Geography The Maltese islands lie in the middle of the Mediterranean Sea about 100 km south of Sicily and 300 km off North Africa. Their total area is about 320 square km. The largest island is Malta with a total area of 246 square km, while the second largest, Gozo has an area of 67 square km. The total population of Malta is about 400,000, of which about 8% live in Gozo. Gozo Comino Restaurants There are a variety of restaurants located in Sliema, St Julians, Valletta, St Paul's Bay and other tourist areas, ranging from fast food shops to more expensive eating places. Food in Malta is often influenced by Italian cuisine, but there are many restaurants serving oriental food. Some restaurants offer a typically Maltese cuisine, which is often fish based. Climate The climate of the Maltese Islands is typically Mediterranean. A forecast on the Malta Mainland weather conditions and average temperatures during the days of the workshop can be viewed on: VALLETTA Currency Malta's currency is the Maltese Lira (Lm), which is divided into 100 cents. At the time of publication of this brochure the exchange rate is approximately Lm1 = Language The official languages are Maltese and English. Almost all Maltese speak English while Italian is widely spoken. Banks Banks are usually open from 08:30 Hrs. to 12:30 Hrs., Mondays to Fridays, and up to 12:00 Hrs. on Saturdays, with extended times in the afternoon between Mondays and Fridays. Foreign exchange facilities are available at Malta International Airport and at a number of automated teller machines situated in the major commercial and touristic areas, all on a 24- hour basis. They are also available at most banks and foreign exchange bureaus. Shopping Opening hours for shops in Malta are between 09:00 Hrs. and 19:00 Hrs., with a lunch break between 13:00 Hrs. and 16:00 Hrs. Opening hours are however extended in commercial and touristic areas. Shops do not open on Sundays and public holidays. Major credit cards and travellers' cheques are accepted at most shops and restaurants. Transport Malta's public bus transport system is very cheap and provides an extensive network throughout the Island. Chauffer-driven car service (known as black taxis) is very reliable and relatively inexpensive. Participants wishing to take white (roving) taxis are advised to negotiate the fare with the driver beforehand. Medical Care Malta enjoys a high standard of medical care, and there are several public and private hospitals and clinics on the islands. Electricity Electricity supply is 240 volts, single phase 50 cycle. The square-fitting standard 3-pin British plugs and sockets are used.

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