The Malta Financial Services Authority (MFSA) on Monday released its Risk Culture and Risk Appetite Statements as part of its drive to place risk management at the centre of its strategy.
These Statements seek to ensure the better identification, evaluation, management, and communication of the Authority’s approach to risk.
The MFSA’s Risk Culture Statement provides guidance in relation to best practice and implementation of the entity’s Risk Culture change programme. The Risk Appetite statement sets boundaries of acceptable levels of risk in key areas of the Authority’s activities as a financial services supervisor.
“To better serve our role as the single regulator of financial services in Malta, we are working towards this transformation by incorporating a risk-based approach as we look to improve resiliency, enhance operational and supervisory effectiveness and address our strategic priorities. To transform our risk culture, we must ingrain a risk-focused mindset into the Authority’s activities,” stated the MFSA’s Chief Executive Officer, Joseph Cuschieri.
The MFSA’s Risk Appetite Statement documents the authority’s overall low risk appetite for supervisory risk. It also states that the MFSA is willing to consider a certain degree of tolerance for uncertain outcomes to foster innovation and efficiencies within certain business models, or with a view to achieving the MFSA’s mission, vision, and strategic objectives.
“The MFSA’s Risk Appetite Statement is an important step towards a sounder and more transparent risk management strategy for our authority,” said the MFSA’s Head of Risk, Franco Borg. “By clearly conveying the acceptable level of risks within our activities, management and employees have clearer signposts to guide their decisions, and external stakeholders can better understand the Authority’s actions in the context of the risks the Authority is facing.”
The Risk Culture and Risk Appetite statements are available here.