The turbulence in the financial markets presents the greatest of golden chances to lay the foundations not only of a fortune, but also of a financial dynasty. A great name in Maltese banking (possibly the greatest) is Tagliaferro. It first appeared in Malta as a Rothschild correspondent bank helping Britain fight Napoleon in the Mediterranean in a time of upheavals, both financial and political.
This is exactly what Malta needs now - entrepreneurial banking leadership. I remember writing in December 2006 that the world's money supply was increasing at a much faster rate than the real side of the economy. It has subsequently been worked out that there was a fourfold, unjustified, increase in monetary magnitudes. Money was pumped ruthlessly for political reasons in the US and the UK into the hands of borrowers who had no possibility whatsoever of paying it back. There is no understanding of Charles D. Ellis's book, The partnership: the making of Goldman Sachs, without background knowledge of the New York Jewish community.
Many see Goldman Sachs as the bank which will ultimately lead the economic recovery of the US. Its share price will be an indication of not only how this particular bank is doing, but also of how the American and even how the whole world economy can be expected to perform. There is no understanding the subprime crisis unless we realise that bankers act ultimately in the national interest at a particular time. They are necessarily pragmatic and we must not forget that the US is playing a warlike game to safeguard its supplies of oil from the Middle East.
This region has far more than 100 years of oil to go while the US has only 10. Americans pay good money for imported oil. The Arab Gulf cities are booming, but there are Arabs and Persians who do not care about money or the misery of their people, but only about their past history. That is when Arabs from Baghdad ruled an empire which included Spain, and Persia exercised a domination which extended from the Mediterranean to the Indian Ocean.
The economic earthquake hitting Europe has, up to now, had its epicentre in Iceland, and its weakest manifestation in Malta. Promoters of the Malta Stock Exchange would do well to read Ellis's book.
This provides the key to the understanding of the central episode which has destabilised the world financial system - the fall of Lehman Bros.
Readers might know of the part Barclays chairman Marcus Agius played in the recent tragic story of Lehman. Every care was taken to hide the Agius name, presumably because of its Rothschild connections. It has made it to the front pages of the world's leading financial newspapers. There was a transatlantic tussle for Lehman Bros, which could have saved the bank, and also saved the world a lot of blood and tears. Barclays was on the European side of the Atlantic while Goldman Sachs participated in the person of Treasury Secretary Henry Paulson, a former partner in the bank.
Ellis's brilliant exposition of past Goldman financial strategy leaves no doubt of how Paulson worked in the interest of his deepest conviction that Goldman was to scale the heights of world banking.
Paulson worked his way to the top of Goldman because he was an enthusiastic executor of the noble mission of his bank that partners should move into the world, and influence it on Goldman's behalf.
Mario Draghi, the present governor of the Bank of Italy, is one example. Many other famous examples can be cited.
The Barclays share price is at its lowest, while that of Goldman is doing no better. There are excellent opportunities for investors to enter at the bottom and move to the top on the back of banking dinosaurs like of Paulson and Agius.
The present golden chance is that we will have a world investment banking scene dominated by Goldman and Barclays.
The first phase of the banking transatlantic tussle is over. The next is only at its beginnings.
Mr Azzopardi Vella, currently economic consultant with DBR Investments Ltd, has promoted the Malta Development Fund and advised S&P.
johnazzopardivella@hotmail.com