PD calls for a holistic sector approach, rather than a silo view for financial services

Partit Demokratiku yesterday stressed it is of the “firm opinion that the interest of the country is bigger than that of a single shady operator and its dependents”.

“Pilatus Bank,” it added, “does not have a good reputation which has been further tarnished by the US indictments of its chairman Ali Sadr.

“If Malta is to hold its hardearned status as an international financial services centre and a reputable jurisdiction, we must show that we have both the teeth and the willingness to curb illicit entities and conduct.”

This, PD said, applies to both the Prime Minister and Minister of Finance, “who should shoulder political responsibility and ensure that the national interest is given priority, and also the MFSA.”

While it is acknowledged that MFSA holds the necessary statutory powers to act swiftly and in the general interest of Malta rather than the operators’ interest, PD asked why the MFSA “has not been more aggressive and timely in the measures imposed on Pilatus Bank when it knows that the repercussions can potentially be wide and affect the whole sector?

“The regulatory failure shown is bound to have wider repercussions, directly on financial services, and other sectors of the economy that are doing well on the back of these thriving sectors including gaming and even the construction industry.”

PD advised: “If we really want our financial services sector to remain an international centre and one of good repute, we cannot continue being insular and short sighted, but pragmatic and always keeping the sustainable momentum of the economy in mind, rather than the interests of one operator and its dependents. It is time to take a holistic approach rather than a silo view.

“Good governance calls for a holistic risk-based approach.”

Noting that the financial sector is doing so well, PD said it “expects that government’s policy should be to govern with an effective regulatory policy in place.

“It is not the number of companies that ensures sustainability but effective regulation and supervision. It is a fact that Malta is business friendly to this sector and moreover it benefits from a favourable tax system and other advantages, but these operators must be made to comply, or else they should be sanctioned with timely, effective measures.

“If Malta’s regulators are weak, our foundations will be weak and our economy becomes weak.”