Central Bank of Malta Governor Edward Scicluna has shed light on the institution’s role to maintain price stability, amid recent periods of global uncertainty.

Prof Scicluna was speaking in the Central Bank of Malta’s Il-Fehma Tal-Gvernatur (The View of the Governor), a vlog series where he provides updates about the bank to the general public. The latest vlog marks the series’ return after a two-year absence.

“The aim of these vlogs is to explain certain events and certain economic and financial issues, so that one can form a better opinion and make a judgement on their own,” he explained.

“Central banks have been quite silent recently, and it comes as no surprise that people outside banks are unaware of what is really going on. Why do central banks require more than 300 people working there? What do they do exactly? Certain aspects of these will be explained so that one has a better idea,” he continued. Prof Scicluna pointed out that the Central Bank of Malta does publish reports from time to time, such as its annual report and economic outlook.

He explained that the Central Bank of Malta’s primary role is to “control prices”. “It is something ironic in today’s world, when prices have shot right up. Outside of Malta they have gone up by more than 10 per cent,” he said, before adding that this is the chief reason as to why it employs monetary policy. While he did not delve into the finer details of monetary policy in this week's vlog, he wanted to highlight that “the Central Bank of Malta has a clear mandate to follow”.

Additionally, it also has other mandates such as that of maintaining financial stability in the country and ensuring banks are sound in their operations, and to take action should something need to be corrected.

Prof Scicluna then turned to the various crises that have taken place in recent years. “Unfortunately, in our lives, more have occurred than normally take place,” he said.

“When I was still a student, we used to speak of the 1939 crisis [the Great Depression] that occurred between the two World Wars. In 2008 there was also the global financial crisis,” he added.

“Nobody predicted that there would be another crisis, that of the COVID-19 pandemic, which wave after wave, nobody knew whether there was an end to it or not. Then there was the war in Ukraine that brought with it a crisis both in Europe and the rest of the world, in relation to a lack of food, lack of energy, and also high energy prices. These are things that central banks must act on,” he explained.

However, he also remarked that they are not the only ones tasked with solving such problems, as they work together with other authorities, primarily fiscal ones, to reach the objectives, “which are to have stability and moderation when it comes to prices, and to provide work for everyone”.

He concluded by hoping that the vlogs, which will be released “from time to time”, are interesting to the public, before wishing them a great year “filled with happiness, peace, and good health”.

The Central Bank of Malta was established in 1968 through the Central Bank of Malta Act, with the main objective to maintain price stability. Since Malta joined the Eurosystem in 2008, the bank has participated in the preparation and decision-making process of the European Central Bank’s (ECB) monetary policy in order to meet its objective.

Prof Scicluna has led the institution as Governor since 2021, after he was appointed for five years. He is a Member of the ECB’s Governing Council, Governor for Malta at the International Monetary Fund, the European Bank for Reconstruction and Development, and the Asian Infrastructure Investment Bank. Prior to his appointment, he served as Minister for Finance, after he was elected as a Member of Parliament for two successive legislatures.