michael c bonello : interview with the times ( of malta ) interview with mr michael c bonello, governor of the central bank of malta, appearing in the times, 10 may 2007. * * * you have long argued for structural reforms and the same message emerges from your statement in the bank ’ s recently published annual report for 2006. with an election due in the coming year or so, is there any point in repeating your plea? the central bank of malta has a statutory responsibility to advise the government on economic and financial matters. in performing this advisory role the bank cannot be conditioned by considerations of electoral expediency or feasibility. central bankers must take a long - term view of the economy ’ s best interests ; and it is clear that in the long run the remaining rigidities and inefficiencies which burden the maltese economy are unsustainable. although it is true that the economy has entered a recovery phase, it is also a fact that malta has not benefited to the same extent as other countries at a similar level of development from the favourable global conditions of the past three years. this suggests that structural factors prevented the economy from responding effectively to the cyclical upswing. that partly explains why per capita gdp in malta has fallen against the eu average, from 74 per cent in 2001 to 72 per cent last year. this relative decline cannot be corrected unless productivity growth accelerates. wage increases have been moderate and cannot, therefore, be blamed for the recent setback in competitiveness. the cause is weak productivity growth, averaging just 0. 1 % between 2001 and 2005, compared with 0. 5 % in the euro area. so that while wage moderation remains essential in today ’ s competitive environment, higher productivity levels are indispensable to sustain economic growth and living standards. as i emphasized in my statement, the response to this challenge must, sooner rather than later, include measures designed to influence all the determinants of productivity growth. the needs here are well known. key among them are policies to further improve the quality of human capital and to attract even more high - value added foreign direct investment ; the need to reorder priorities in public spending to align them better with the lisbon agenda goals ; a more cost - effective delivery of support services to exporters by both public and private sector suppliers ; the adoption of more efficient work practices ; and policies to raise the labour participation rate, especially for women. in your statement you also call for means testing. aren

josef bonnici : achieving malta ’ s potential growth in challenging times address by professor josef bonnici, governor of the central bank of malta, at the ifs malta annual dinner of the institute of financial services, saint julian ’ s, 29 november 2013. * * * hon. minister, excellences, members of the institute, distinguished guests first of all, i would like to thank you, mr president, and your committee for the opportunity to share my thoughts once again with such a distinguished audience at the ifs malta annual dinner of the institute of financial services. before i do so, however, i would like to commend the ifs for its perseverance in adapting itself to the changing demands of a dynamic financial sector and its on - going commitment to excellence in the provision of financial services education. it is pleasing to hear that you had a successful year and that you are active on new initiatives to promote even higher professional standards in the financial sector. your collaboration with other organisations is also noteworthy. the presence of representatives from the uk ’ s ifs university college and the european banking & financial services training association is evidence of the quality of the service provided by ifs malta. mr president, well done and i wish you and your committee success in your future endeavours. the ecb plays an important role in averting risks as you are all aware, many of the member states of the euro area are going through fundamental reforms that would over time promote sustainable growth. this only can occur with the support of a healthy financial sector, including a banking system that provides the needed volume of credit at interest rates that reflect the european central bank ’ s ( ecb ) provision of ample and low - cost liquidity. over the course of the crisis the ecb has launched various measures to avert the risk of more severe ramifications from the financial crisis. in july the ecb introduced forward guidance, assuring the financial markets that its policy stance will remain accommodative and interest rates low for as long as necessary. as a matter of fact, the recent interest rate cut was consistent with this forward guidance. throughout the crisis, the ecb has played an important role in ensuring, within its price stability mandate, the proper financing of the euro area economy in a context of subdued credit dynamics. a series of measures were introduced to ensure that banks can pass on low policy rates to the real economy, in particular where most needed. these measures include providing ample liquidity to euro