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The Financing of Companies in Malta

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  • Jude Darmanin

Abstract

This note examines recent developments in the financing structure of non-financial companies in Malta. The financial liabilities of NFCs are mainly composed of debt, private equity, and trade credit, with evidence pointing to a shift away from bank lending in recent years. This financial disintermediation is driven by a number of factors, including loan supply restrictions on the part of banks, the changing structure of the economy, an improvement in the financial position of NFCs, and higher usage of capital markets by large companies. In this light, the main issue is understanding whether this shift is a choice on the part of firms, or a constraint imposed by a tighter bank lending channel. The analysis in this note suggests that it is a combination of the two.

Suggested Citation

  • Jude Darmanin, "undated". "The Financing of Companies in Malta," CBM Policy Papers PP/04/2017, Central Bank of Malta.
    • Handle: RePEc:mlt:ppaper:0417
    as

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    File URL: https://www.centralbankmalta.org/file.aspx?f=61638
    File Function: First version, 2017
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    References listed on IDEAS

    as
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    4. European Commission, 2017. "Taxation trends in the European Union: 2017 edition," Taxation trends 2017, Directorate General Taxation and Customs Union, European Commission.
    5. European Commission, 2017. "Tax Policies in the European Union: 2017 Survey," Taxation Survey 2017, Directorate General Taxation and Customs Union, European Commission.
    6. Botescu Ion, 2017. "The European Union: Challenges and Perspectives," Ovidius University Annals, Economic Sciences Series, Ovidius University of Constantza, Faculty of Economic Sciences, vol. 0(2), pages 73-78, December.
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    More about this item

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • G00 - Financial Economics - - General - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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