Malta has the world's 10th soundest banking system, a major survey has found, backing up the government's assurances that local banks are on a sound footing. The World Economic Forum Global Competitiveness report gave Maltese banks a score of 6.6 out of a maximum of seven. Finance Minister Tonio Fenech said the WEF report backed-up the government's insistence that local banks were safe largely due to a well regulated market monitored by the Malta Financial Service Authority which has helped to establish Malta as an important and renounced financial services centre.

With the collapse of Northern Rock in the UK local banks had steadily built up their liquidity reserves. Local banks in fact currently hold liquidity levels well in excess of regulatory requirements.

IMF have previously assessed the Maltese banks and found they had a low risk because of strong domestic franchises. Domestic banks had liquid assets that were well above the 30 percent prudential requirement. A strong local domestic deposit base was one important contributing factor to this.

But while the Maltese banks received a clean bill of health from the WEF, British banks slipped to 44th place behind El Salvador and Peru. The US, where some of Wall Street's biggest financial names have tumbled in recent weeks, rated only 40, just behind Germany at 39.

WEF's top 10 soundest banking systems are highlighted below:

1. Canada
2. Sweden
3. Luxembourg
4. Australia
5. Denmark
6. Netherlands
7. Belgium
8. New Zealand
9. Ireland
10. Malta