The prudent management of capital and liquidity is a priority for the BOV Group, said Miguel Borg, Executive Head Risk Management at Bank of Valletta.

Mr Borg recently participated as a panel speaker at a Stress Test Conference organised by the European Banking Authority (EBA) in London.

The EBA was officially established on 1 January 2011 and has taken over all existing and ongoing tasks and responsibilities from the Committee of European Banking Supervisors (CEBS). The EBA acts as a hub and spoke network of EU and national bodies safeguarding public values, such as the stability of the financial system, the transparency of markets and financial products and the protection of depositors and investors.

Taking part in the conference were representatives from most of the European banks that participated in the stress test on their capitalisation in 2011, as well as national regulators.

“Adequate capital is not only the motor which drives the bank’s business, it is also key to the maintenance of stability in the Maltese financial sector. This explains why the prudent and efficient management of capital is one of BOV’s top priorities,” Mr Borg said.

In his address, Mr Borg focused on BOV’s stress testing methodology and on its use of reverse stress testing. He emphasised BOV’s extensive use of stress testing techniques as part of its portfolio risk management toolkit.

“Bank of Valletta performs internal stress tests on its capital and liquidity to help safeguard the stability of the bank in an environment of competition and uncertainty,” continued Mr Borg. “The EU wide stress-test is an authoritative and independent confirmation of our prudent capital management strategy and responsible dividend payout policy.”