London to host seminar on Malta's financial services in June

The Sunday Times talks to the Lord Mayor of the City of London, Alderman Michael Savory

Malta's financial services will be showcased at a high-profile seminar in London on June 29, hosted at Mansion House by the Lord Mayor of the City of London.

This was announced by the Lord Mayor, the Rt Hon. Alderman Michael Savory, during his speech to a half-day seminar at the Malta Financial Services Authority last Wednesday, attended by the local financial services community as well as a group of City executives.

Presentations about Malta's finance centre were made by MFSA's chairman, Professor Joe Bannister and by Kevin Valenzia, chairman of Finance Malta and of the Institute of Financial Services Practitioners.

The Lord Mayor also inaugurated a half-day conference in Attard on public-private partnerships and met the President, the Acting Prime Minister, the mayor of Valletta, the Minister for Investment, Industry and Information Technology, the Parliamentary Secretary in the Ministry of Finance and business leaders.

In an exclusive interview with The Sunday Times, Mr Savory admitted that he had known little about Malta's financial centre. "Although Malta offers a very credible package in terms of regulation, taxation, probity, a highly qualified multilingual workforce and an attractive working environment, the City does not fully recognise Malta as a promising financial centre. Malta must shout louder".

"I have been deeply impressed at what I have seen and learnt here and will circulate a report to the financial community about my visit."

As well as being the 676th Lord Mayor of the historic City - the 'square mile', Britain's financial heartland - Mr Savory, a banker and stockbroker, is ambassador for UK-based financial services (whether British or foreign-owned) and will have spent 80 days travelling to 25 countries during his one-year term of office ending in November.

On behalf of the Sovereign and the Government, the City's Lord Mayor hosts visiting heads of state and foreign dignitaries, while the Prime Minister, the Foreign and Commonwealth Secretary and the Chancellor of the Exchequer make annual keynote speeches at Mansion House high-level functions.

"Malta's 'cluster capabilities' offer a major potential to develop as a regional Mediterranean hub working closely with the City", he stated. "Its financial sector could double in five years. This is also critically important for Malta's economic development as traditional industries such as textiles can no longer sustain competition from low-cost Asian producers."

Maltese financial services could also be offered to the Gulf countries - whose large capital assets were mainly lodged in London and Switzerland - even though this area also wanted to develop as a financial centre. Malta's good image in Libya, which he had just visited, could certainly facilitate increased UK-Libyan business links, mediated by Maltese counterparts, and built on Malta's financial and corporate services.

"Regional hubs cannot compete with London, but they can grow and thrive as complements," he stated. "This means lending local expertise and working with the London hub to help the joint economic cake increase. International involvement in local economies can be a powerful driver for change but here the key word is steady evolution, perhaps initially through minority stakes and joint ventures. There is also scope for launching bonds and managed investment funds to attract local investment capital in the region."

The Malta Stock Exchange needed to expand its operations beyond quoting a few local shares, he continued, for example by providing a regulatory base for trusts to be operated, and developing its contacts with other exchanges. "In the long run however, all bourses will become one single electronically linked system", he pointed out.

"The crucial importance of strengthening links between Malta and London resides in the City's position as Europe's main financial hub and the world's largest international business and financial centre, contributing about €31 billion annually to Britain's GDP, directly employing 300,000 people, and indirectly creating nearly 1 million jobs in the UK and another 200,000 jobs across Europe.

"Without London, about 18 per cent of EU's City-type business would be lost to the fiercely competing non-European centres. Strikingly, studies indicate that a further 12 per cent of Europe's City-type business would be lost entirely as it would probably be impossible to replicate it anywhere else in the world - such is the power of London's cluster effect. But there will be plenty to do simply to sustain our advantage over the next ten years."

"As gateway to Europe, our unique strength in wholesale and specialised financial businesses means we can help European law-makers understand the special needs of this business. To this end we have opened a City Office in Brussels to strengthen early dialogue between City businesses and lawmakers on such issues as the EU's Financial Services Action Plan."