The Malta Employers Association has expressed alarm at the "extensive media reports" tarnishing Malta's reputation as a respected EU centre for financial services.
"No serious and credible reaction to this situation has been forthcoming from government and its various institutions," it said.
The MEA pointed out that this was extremely worrying and condemnable since at stake there is the survival of a critical financial sector that provided more than 12,000 decent jobs, a sector painstakingly built and nurtured over years, and one on which other sectors of the economy are depending on for sustainable growth.
"What appears to be negatively happening, unchecked and with impunity, is now threatening the very credibility of Malta as a viable, democratic state, a fully-fledged EU member capable and deserving to attract foreign investment from decent sources.
"The unforgivable incompetence of the Police Commissioner who, whether through ignorance or by design, chose to look the other way when there was clear evidence of suspicious practices certainly damages the credibility of our justice system," it said.
The MEA added that even more serious was the failure of the Malta Financial Services Authority to investigate the doubtful dealings of Pilatus Bank.
"This carries the danger of being interpreted as a repositioning of our financial services sector from one which is based on trustworthiness and reputation, to another which operates to serve the interests of money launderers and illicit businesses.
"It is well known that, up to the recent past, Malta had strict due diligence procedures which would have precluded such companies from setting up even when they requested to do so.
"The presence of such shady companies tarnishes the reputation of the country and the many companies operating in this sector who conduct their business in a responsible and ethical manner."
The MEA, as a responsible social partner, said it felt it was duty bound to take a stand and voice its concern when faced with this national crisis.