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The Implications of Derisking: The Case of Malta, a Small EU State

Author

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  • Simon Grima

    (Department of Insurance, Faculty of Economics, Management and Accountancy, University of Malta, MSD 2080 Msida, Malta)

  • Peter J. Baldacchino

    (Department of Accountancy, Faculty of Economics, Management and Accountancy, University of Malta, MSD 2080 Msida, Malta)

  • Jeremy Mercieca Abela

    (Department of Accountancy, Faculty of Economics, Management and Accountancy, University of Malta, MSD 2080 Msida, Malta)

  • Jonathan V. Spiteri

    (Department of Insurance, Faculty of Economics, Management and Accountancy, University of Malta, MSD 2080 Msida, Malta)

Abstract

In this study, we explore the emerging derisking phenomenon by identifying and analysing the main factors that are affected by, and the implications of, the derisking process by focusing on the key drivers and implications of derisking specific to Malta. To do this, we carried out 32 interviews with individuals who have a good or excellent level of expertise in derisking and administered a survey, completed by 296 participants who were filtered to ensure their level of expertise, resulting in 285 valid participant surveys. In total, between the interviews and the survey, we had 317 valid participants. Findings showed that to maximise the effectiveness of derisking, one needs to find the right balance of adequately managing risks without extinguishing business needs. This implies a need for the regulations to be balanced and proportionate. This study is a relevant contributor to future derisking to be conducted in Malta and serves as a benchmark for further studies. Moreover, this research project accentuates the need for increased awareness, knowledge and expertise of derisking in Malta. Consequently, the provision of education to professionals is important so that such professionals are able to keep abreast with all the latest developments regarding derisking and AML/CFT (antimoney laundering and combatting the financing of terrorism).

Suggested Citation

  • Simon Grima & Peter J. Baldacchino & Jeremy Mercieca Abela & Jonathan V. Spiteri, 2020. "The Implications of Derisking: The Case of Malta, a Small EU State," JRFM, MDPI, vol. 13(9), pages 1-31, September.
    • Handle: RePEc:gam:jjrfmx:v:13:y:2020:i:9:p:216-:d:415436
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    References listed on IDEAS

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    2. Asli Demirguc-Kunt & Leora Klapper, 2013. "Measuring Financial Inclusion: Explaining Variation in Use of Financial Services across and within Countries," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 46(1 (Spring), pages 279-340.
    3. Michaela Erbenova & Yan Liu & Nadim Kyriakos-Saad & Aledjandro Lopez Mejia & Jose Giancarlo Gasha & Emmanuel Mathias & Mohamed Norat & Francisca Fernando & Yasmin Almeida, 2016. "The Withdrawal of Correspondent Banking Relationships; A Case for Policy Action," IMF Staff Discussion Notes 16/06, International Monetary Fund.
    4. McLean, Sheldon & Metzgen, Ydahlia & Singh, Ranjit & Skerrette, Nyasha, 2018. "Economic impact of de-risking on the Caribbean: Case studies of Antigua and Barbuda, Belize and Saint Kitts and Nevis," Studies and Perspectives – ECLAC Subregional Headquarters for The Caribbean 43310, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    5. Ms. Michaela Erbenova & Ms. Yan Liu & Mr. Nadim Kyriakos-Saad & Aledjandro Lopez Mejia & Jose Giancarlo Gasha & Mr. Emmanuel Mathias & Mr. Mohamed Norat & Francisca Fernando & Ms. Yasmin Almeida, 2016. "The Withdrawal of Correspondent Banking Relationships: A Case for Policy Action," IMF Staff Discussion Notes 2016/006, International Monetary Fund.
    6. Michael Alix & Shyam Venkat & Zubin Mogul & Som-lok Leung & Marcia A. Banks & Juliane Saary-Littman, 2015. "Risk Appetite Frameworks: Insights into Evolving Global Practices," Global Credit Review (GCR), World Scientific Publishing Co. Pte. Ltd., vol. 5(01), pages 1-17.
    7. Norman Mugarura, 2016. "Uncoupling the relationship between corruption and money laundering crimes," Journal of Financial Regulation and Compliance, Emerald Group Publishing Limited, vol. 24(1), pages 74-89, February.
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    Cited by:

    1. Steven Grima & Peter J. Baldacchino & Simon Grima & Murat Kizilkaya & Norbert Tabone & Lauren Ellul, 2023. "Designing a Characteristics Effectiveness Model for Internal Audit," JRFM, MDPI, vol. 16(2), pages 1-44, January.
    2. Joseph Micallef & Simon Grima & Sharon Seychell & Ramona Rupeika-Apoga & Mark Lawrence Zammit, 2020. "A Study of the Implications of the European Securitisation Regulation 2017/2402 on Malta," Laws, MDPI, vol. 9(3), pages 1-26, September.

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