The rating agency Standards and Poor revised downwards its industry score on Malta’s banking sector. The downgrade follows on the European Banking Authority’s report which concluded that Malta’s Financial Intelligence Analysis Unit was breaching money laundering directives.

In its report on Malta, Standards and Poor remarked:

“In our view, allegations of money laundering against Pilatus Bank, a small Malta-based international bank, as well as our perception of poor transparency at some banks, have increased reputational and operational risks for the Maltese banking sector generally”.

This downgrade is the direct result of the deterioration in level and quality of supervision of the financial services sector. Pilatus Bank should never have been licensed to operate in Malta. The authorities not only licensed it but also allowed this bank to operate with impunity. These authorities, including the Malta Financial Services Authority and FIAU, fall under the direct ministerial responsibility of Minister Edward Scicluna who must now shoulder his responsibility for yet another damning review of his handling of Malta’s financial services sector.

On April 5 2016, Minister Edward Scicluna said that strong and tough decisions had to be taken by the Prime Minister regarding the revelations in the Panama Papers. These decisions were not taken. Minister Scicluna himself did nothing to protect our financial services sector, choosing instead to protect his colleagues. Minister Scicluna now has to take a tough decision himself. He must show whether he is capable of assuming political responsibility for the institutional failures that led to the reputational downgrade of Malta’s most important economic sector.

Mario de Marco Spokesperson for Finance

Kristy Debono
Spokesperson for Economy, Financial Sector and Innovation