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Prepared by Federico Grinberg.
The Ted-spread is constructed as the difference between the London interbank interest rate (Libor) and the US 3-month T-bill yield.
A wider range of domestic variables were examined; however, they were eventually dropped due to weak co-movement with the common factor or had the opposite sign that one would expect.
The Central Bank of Malta’s FCI also suggests that conditions have improved since 2013, though it shows that financial conditions remained less favorable compared to the pre-crisis period.
At a 5 percent significance level.
Results on overall credit to the private sector are inconclusive, potentially reflecting the recent non-financial corporates deleveraging.