Speaking at a press conference on Monday, Finance Minister Edward Scicluna claimed that the International Monetary Fund comments on Malta praise the country.

The IMF's Assessment (see pg 4) says: "The banking system remains resilient under a severe scenario, with weaknesses limited to a few small banks. The system is sufficiently capitalised to absorb losses in the event of a severe macroeconomic shock, but risky exposures would lead to potential losses at a few small banks."

"Continued enhancements are encouraged in the macro-prudential framework. While the recent strengthening of systemic risk monitoring is commendable, the legal framework should be enhanced, data gaps closed and nonbank risk assessment strengthened. The planned introduction of borrower-based measures to address build-up of vulnerabilities in the housing and household sector is welcome."

"Ensuring adequate resources is critical to preserve the effectiveness and operational independence of the Malta Financial Services Authority. Shortcomings in bank supervision call for urgent action."

"To strengthen bank supervision, the MFSA should take timelier supervisory actions, increase the frequency of onsite inspections, make more use of monetary fines as part of the sanctioning regime and ensure supervisory action is not delayed through judicial appeal."

"Actions are needed to support the use of early intervention and resolution powers and to address weaknesses in the bank liquidation and insolvency framework."

"Containing financial integrity risks is critical to financial stability."

"A multi-prong approach is needed to address anti-money laundering and combating the financing of terrorism (AML/CFT) deficiencies. Enhancing the AML/CFT system is required to protect the financial sector and the broader economy from the ML/TF threats."

That's quite a tall order for the Maltese authorities and certainly cannot be understood in any way as 'praising' the country.

Similarly, the chairman of the MFSA, Professor John Mamo, says: "The report highlights the challenges facing the MFSA from the increased demands of supervising the growing number of licensed financial institutions in an evolving and more complex regulatory environment, as well as the need to upgrade the MFSA's operational capacity to enable it to operate more effectively.

"The MFSA also takes note of the key recommendations made in the report, namely to strengthen supervisory and enforcement capacity through increased resources, investment in technology and a number of operational and technical initiatives intended to enhance sectoral risk-based supervision, enforcement and judicial processes.

"Going forward the report also provides valuable inputs into the ongoing improvement processes undertaken by the MFSA in conjunction with other national authorities and stakeholders to continue to safeguard stability and address the risks that may stem from different sectors of the financial market."

In other words, note is taken of the IMF's recommendations and one looks at the future at which time the required improvements will hopefully be in place. That's quite a mouthful, considering the deficiencies which have led to scandals that have resonated all around the world and blackened Malta's name.

One is tempted to add to this some relevant parts of the European Commission's assessment of Malta's economic and social priorities which we published last week. Once again, this does not make easy and comforting reading: "Recent investigations involving money laundering have revealed shortcomings in Malta's anti-money laundering enforcement.

"Regarding the governance framework, some steps have been taken to strengthen financial supervision and anti-money laundering enforcement, but shortcomings in the anticorruption framework persist.

"Malta has a growing reliance on service sectors that are considered particularly vulnerable to money laundering practices. Moreover, recent investigations involving money laundering have revealed serious shortcomings in Malta's anti-money laundering enforcement framework. Sanctions, however, are rarely imposed. While Malta is currently making improvements, the size of the challenges requires particularly high standards of antimoney laundering supervision and better enforcement.

"Survey indicators identify corruption and inefficiencies in the justice system as problematic factors in Malta. Recent reforms have yet to fully ensure the independence of the judiciary. The anti-corruption institutional framework has shortcomings, and there exists a risk of conflict of interest at various levels of government. The Economic Crimes Unit of the police is currently understaffed. A strengthened governance framework is a prerequisite to fully reaping the benefits of investment."