There is no risk of Malta falling victim to a banking crisis like the one that has forced Cyprus to file for a eurozone bailout, dpa quoted officials from the island as saying Wednesday. Maltese bankers have strongly rejected "misleading" comparisons between the island's banking system and that of Cyprus, amid press reports that Malta and Luxembourg could be next in line to face the chop. "Our banking model is sound, liquid and profitable. We are safer than anyone else," Bank of Valletta chief executive Charles Borg told dpa. Insisting that Maltese banks were unified in avoiding the same potential pitfalls as Cyprus, Borg warned that the wrong interpretation of Malta's banking system could impact business. He echoed comments made earlier by Maltese Central Bank Governor Josef Bonnici, who said the size of the Maltese banking sector relative to the country's economy was strongly influenced by a number of institutions that virtually had no economic or financial links with the economy. Both Borg and Bonnici insisted that assets of the all-important banks amounted to just below 300 per cent of gross domestic product, which by international standards was "within normal limits." Fears mounted after a bailout deal for Cyprus, which forced the closure of the country's second-largest bank and a downsizing of the country's banking sector that was flooded by Russian funds of dubious provenance. But Borg said that while Cypriot banks were highly dependent on foreign sources of funds, including investments in ill-fated Greece, Malta's banks had minimal overseas investments with a funding model almost totally dependent on local deposits. Malta's domestic banking system, is dominated by two banks - HSBC Malta and Bank of Valletta, both highly profitable - which account for well over 90 per cent of banking business on the island.
