The effect of changing trends in banking on Maltese bank's financial reporting framework : an analysis

Abstract

This dissertation explores the possibility of new banking trends in Malta and their resulting financial reporting requirements. The study considers the regulatory status and examines the financial reporting of these trends as per International Financial Reporting Standards, whilst exploring the Maltese banking scenario. Changes in Hybrid Capital regulation are expected shortly in Malta. Considering Maltese banks' reversion to non-ordinary share capital, this legislation is expected to provide several options for banks considering fresh issues of capital. This study analyses present forms of capital as well as accounting for Hybrid Capital instruments under IFRSs. Unfunded Products that are accounted for as Financial Guarantees are predicted as a probable future banking trend. Accounting for Financial Guarantees is provided for under recent amendments to IFRSs, in addition to IAS 39. This work considers such products as accounted for by foreign banks registered in Malta, along with Financial Guarantees as currently in operation by local commercial banks, highlighting their differences. Islamic Finance may be booming worldwide but Malta seems to be just taking its early steps towards this trend. Although such concept is being given a lot of public importance in consultation processes, it remains to be seen what is really being done about the reporting requirements of such trend. This dissertation aims to highlight details of unique features of Islamic Banking along with their reporting implications. The study will explore the response of the Maltese banking arena with respect to the many aspects of these trends.