Edward Scicluna stresses importance of objective, independent advice on financial services amid mounting criticism
Finance Minister Edward Scicluna stressed the importance of independent, objective advice on Malta’s financial services sector at large while speaking at a conference organised by the Institute of Financial Services.
He referred to several comments and “innuendos” likening Malta to a tax haven coming from all sorts of commentators and sections of the media. He reiterated how the government had employed the services of international consultants of certain repute to give an “objective” analysis on Malta’s industry.
He described how there are two strands of discussion when it comes to financial services in Malta: the modern section speaking of blockchain, cryptocurrency and Fintech, and the other “gloomy” discussion with regard to reputation and “attacks” on Malta’s financial sector.
“We are looking at the question of regulatory changes. The problems with compliance are not easy.
“I believe these two discussions should, for our own survival, merge and converge.”
“Malta is passing through a very severe stress test,” he said, while also noting tax reforms proposed by the USA and the UK, which could have an impact on the local financial services sector.
Scicluna acknowledged the criticism and innuendos that Malta is a tax haven, which he said is bolstered by the media, where he echoed the PM’s calls for engaging in the discussion and addressing it piece by piece.
“Of course, reform has to be made, like we are doing in every sector.” He said that the issue with compliance is “proportionality,” adding that it is a political issue.
“Proportionality has to be taken care of. You cannot expect a small bank, being systematic as it is a small pond [such as BOV], to be treated like Deutsch-Bank, for example.
“We need independent, objective advice. What do we need? Where are our gaps? I think one of the main problems is coordination within the industry.”
He said that the analysis currently being undertaking by consultants for the government has not been made due to the recent revelations placing Malta in the spotlight, such as the Paradise Papers, but because it is an opportune moment to “re-examine ourselves.”
He said that the country has addressed post-box companies and other areas of critique through European directives that will come into effect in two years’ time, allowing companies enough time to adapt to regulatory changes.
“Some companies will have to close down; this will change the landscape but it does not mean we will finish and all the companies will run away.”
He described how the EU rules create an onus on companies having a higher physical presence in the country they are registered.
“I do believe that Malta is where it is not just because of taxation, but a combination of things. We are not passive, we react, and investors know this.”