On the 6th of January 2020, the Malta Financial Services Authority (MFSA) has published Risk Culture and Risk Appetite Statements to enhance its risk-focused mindset for supervisory and operational activities.
MFSA’s CEO, Joseph Cuschieri summarized the ultimate objective of the said statements as follows:
“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”.
Together with the statements the MFSA published a short explanatory note to define both ‘risk appetite’ and ‘risk culture’, as reproduced hereunder for ease of reference.
Risk Appetite: The Malta Financial Services Authority’s risk appetite is defined as the amount of risk (volatility of expected results) the Authority is willing to accept in pursuit of its mission and in carrying out its function as a financial services supervisor.
Risk Culture: The Malta Financial Services Authority’s Risk Culture describes the set of shared attitudes, values and behaviours that characterise how the Authority and its staff consider risk in their day-to-day activities. The MFSA aims to foster a positive risk culture.
Whilst the MFSA’s Risk Appetite Statement documents the Authority’s overall low risk appetite for supervisory risk, the Risk Culture Statement documents provide guidance in relation to best practice and implementation of the MFSA’s Risk Culture change programme.
Full version of the statements in discussion may be found here:
1. Risk Culture Statement: https://www.mfsa.mt/wp-content/uploads/2020/01/20200106_MFSAs-Risk-Culture-Statement.pdf & FAQs on the MFSA’s Risk Culture Statement https://www.mfsa.mt/wp-content/uploads/2020/01/20200106_FAQs-on-the-MFSAs-Risk-Culture-Statement.pdf
2. Risk Appetite Statement: https://www.mfsa.mt/wpcontent/uploads/2020/01/20200106_MFSAs-Risk-Appetite-Statement.pdf & FAQs on the MFSA’s Risk Appetite Statement https://www.mfsa.mt/wp-content/uploads/2020/01/20200106_FAQs-on-the-MFSAs-Risk-Appetite-Statement.pdf
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