Additional sources of financing that deserve further exploration are through the European Investment Bank, and in particular through the European Investment Fund. The latter offers a venture capital facility whereby it helps venture capital and private equity fund managers to provide risk capital to SMEs. Companies can also benefit from the JEREMIE programme (Joint European Resources for Micro to Medium Enterprises), which promotes increased access to finance for the development of micro, small and medium-sized enterprises in the EU. Over 80% of the balance sheet value of the core domestic banks is funded through customer deposits, considerably higher than the 30% average in the euro area. 2 Indeed, customer loans extended by core domestic banks continue to be fully funded from customer deposits. Meanwhile, Maltese banks’ recourse to Eurosystem funding has been modest, as shown in Chart 12, which measures Eurosystem funding as a proportion of the balance sheet. This in itself is a good sign, reflecting the absence of banking distress. Banks must also exercise caution in the use of such sources. Although conditions are currently very favourable, it must be clear that such terms will not last forever. Banks are thus encouraged to continue using such facilities but not become overly dependent on them. Business models which are based on a disproportionate use of Eurosystem funds are not banking models that the Central Bank feels comfortable with.

Recognising shifts in the operating landscape, the Financial Sector Blueprint 2022-2026 focuses on fostering market dynamism to enable financial sector to be highly adaptive to wide ranging scenarios. Regulatory efforts will be directed toward targeted interventions to remove undue barriers to innovation as well as address market failures. The Bank is also reviewing how we regulate innovation to facilitate a more conducive environment for solutioning. This includes reviewing existing policies and enhancing the Regulatory Sandbox to better support innovation in value-based finance, including the novel application of Shariah contracts. We also strongly encourage innovation in impactdriven instruments such as Islamic social finance, blended finance, and green solutions. Potential recalibration of existing regulatory requirements will be explored to support the broader and more diversified application of Shariah contracts in advocating inclusivity and sustainability. Secondly, financial institutions must demonstrate immediacy, and act together to solve 'real world' issues. The need for a collective and coordinated response to deliver meaningful impact to stakeholders is urgent and paramount. The flood last year provided a harrowing glimpse of the consequences of fragmented actions. Delayed evacuation responses and inefficient donation allocation to relief centres resulted in lost lives and wastages. Applying lessons learnt to achieve desired outcomes for the financial sector – which is finance for all, finance for transformation and finance for sustainability – requires leaders to have foresight in identifying collaborative  1/3  BIS - Central bankers' speeches  opportunities across industries and work together to develop impactful and scalable solutions.