Prime Minister Joseph Muscat has undoubtedly every right to express his opinion about pretty much everything under the sun. But he is the Prime Minister and his words carry far more weight than those of the normal man or woman on the street.

This is why his recent complaint that banks are not helping economic growth, and his call for more lending, were so disturbing.

The Prime Minister does not need anyone to tell him that banks remain sustainable – not to say profitable – by using the money deposited with them. That money costs them money as they have to pay the depositors interest on it. This is why they have to work that money to bring in more than they are paying out, the so-called interest margin.

What they do with that money is no different in principle to what that man or woman on the street does: in essence, they invest the money, balancing the risk of the investment against the interest it would generate. Since the money they are playing with is not their own, they have a greater responsibility to act prudently.

Because bitter experience showed that banks cannot be trusted to always get this balance right, regulators stepped in to create a framework to protect the consumer. Regulators now dictate not only how much capital banks need but also which clients banks should do business with – and why. HSBC Malta reported last week that it has increased its risk and compliance team by a third in just a few years.

Banks in Malta have been much more prudent in the past than their European counterparts, which is why they never required a bailout and why the main ones remain profitable – and sustainable. This is also why the economy rode out the recession. They certainly did not require any guidance from the Prime Minister then and they certainly do not need it now.

Their biggest headache is liquidity: deposits are growing and it is harder and harder to use that money to generate income. Interest rates on good, solid investments are at all-time lows – and even doing nothing is not an option. They actually pay to park that money somewhere safe. They want nothing more than to find someone to lend that money to.

This is clear from the figures that emerged from a recent Central Bank survey on access to finance: 87 per cent of SMEs seeking loan finance and 75 per cent of those applying for an overdraft “got everything” or “most of it”. This prompted the Malta Bankers’ Association to observe that banks make a “significant” contribution to the economy.

The problem is not that entrepreneurship is lacking but that banks cannot just consider an application in isolation: they have to consider the sector as a whole.

Let us take cinemas as a theoretical example: one might be perfectly feasible; 10 in the same area would not be, as the competition would mean that not all would survive. Is that paternalistic? Yes. Banks sometimes have to protect businessmen from their own enthusiasm. But it is not left to their discretion: one of the things that regulators, credit rating agencies and even the IMF do is look at each bank’s sectoral exposure.

This is hardly rocket science: the proverb ‘don’t keep all your eggs in one basket’ springs to mind. The Prime Minister does not need to be reminded of this. So what was his motivation? Was he merely a messenger for thwarted borrowers?

Our banks are the most effective brake on bubbles forming in the economy. Take all the high-rise developments being proposed – and now starting to win planning approval. In the end, it is not drainage, parking or aesthetics that will determine how many get built, but financing.

Joseph Muscat would be better off pondering how to ensure that those turned away do not exploit the public’s blind thirst for investments by issuing bonds…