##ity has been deposited back with the ecb, as reflected in considerably slower growth in loans ( the blue lines ). this is an indication of the hesitancy on the part of the banks to buy securities, or to extend loans, whether to other banks or to the non - financial sector. some concern has been expressed about the size of the build - up of liquidity across various economies that could be mobilized by the banks in the eventual post - crisis expansion of loans. however, it must also be noted that the excess liquidity can be eventually reabsorbed by the central banks. in any case, it should also be noted that the provision of additional liquidity by the ecb ( as shown by the red lines in chart 7 ) has been somewhat more moderate than is true for other major central banks such as the federal reserve, as shown in the chart. the ecb has now gone a step further by announcing an outright monetary transactions programme, designed to repair the link between policy rate cuts and ample liquidity provision, on the one hand, and lower borrowing costs, on the other. it is also meant to counter the so - called redenomination or convertibility premium that compensates investors for the perceived risk of a breakup of the monetary union. it ties intervention to strict conditions : it will be used only for countries under an efsf or esm programme. transactions are limited to the shorter end of the yield curve, and would complement esm intervention at the longer end. moreover, the ecb will not take on a senior position in the debt ’ s structure, therefore safeguarding the interest of private - sector investors. as is well known, the announcement of the omt programme has already helped to stabilize the financial markets and reduce sovereign spreads ( see chart 1 ). it is really equivalent to traditional open market operations that central banks have long resorted to in order to provide stability and a better functioning of the monetary transmission process that can get impaired in certain circumstances. the maltese situation the maltese economy has encountered some persistent headwinds. still, the recession observed in the last quarter of 2011 and the first quarter of 2012 was relatively short and mild. since then, the economy has shown a modest recovery. during the second and third quarters of this year, real gdp was up 1. 6 % on the same period of 2011. the inflation rate in malta has recently exceeded that of the euro area average. the hicp measure of the year - on -

the institutions and industry that could contribute towards the prevention of financial crimes and terrorism financing. apart from standing guided by specific instruction and detailed direction from regulators, compliance officers are encouraged to introduced new or proactive measures, within the ambit of the law. similarly, the requirement now emphasises on measures that commensurate with risk. the application of the risk - based approach ( rba ) should have a meaningful application in action. misinformed rba could lead to unjust financial exclusion, economic cost to institutions, or 3 / 4 bis central bankers'speeches sanctions by the authority. the efforts by private sector are vital as they form a part of the country ’ s assessment towards compliance to international aml / cft standards. they are assessed under immediate outcome 4 on whether ris adequately apply aml / cft preventive measures commensurate with their risks, and report suspicious transactions. i wish to highlight that, based on mutual evaluation exercise conducted on 38 countries so far, majority of the private sector within these countries, including developed countries are still unable to demonstrate the characteristics of an effective system ; namely understanding risks, comprehensive internal control and compliance programme including application of customer due diligence on suspicious transactions reporting. i would like to echo the discussion during the plenary session yesterday that an effective antifinancial crime programme requires concerted efforts from every line in the institutions, be it the first, second or third line of defence. it also demands collaborative efforts by other functions within the institutions, including an updated it system and infrastructure, comprehensive and continuous staff training programmes, and good understanding of risks. most importantly, the oversight and support from senior management and board of directors of the institutions. before i conclude my speech, allow me to share with you some developments from the regulatory perspective that you can expect in the near future. as you may be well aware, our national ml / tf risk assessment ( nra ) is currently in progress and is expected to be concluded by year end. the results of the assessment will be accompanied with some guidance from regulators. this should be used as a basis in your institutional risk assessment to eventually align your operations on a risk - based approach. you can also expect introductions and amendments to aml / cft policies, in response to the nra as well as to new areas relating to cryptocurrencies and e - kyc. from the enforcement perspective, another notable change to expect in the next year is the publicising of