I refer to the Times of Malta’s front page report of May 23. The European Commission is quoted as having said “Malta should ensure the effective supervision of internationally oriented business by financial institutions licensed in the island, in cooperation with the host supervisors in the countries where they operate”.

Unless I am missing something, this is a statement that requires a lot of explaining on the part of the Commission.

What exactly are they saying? Are they in any way suggesting or implying that the powers of local regulators to carry out the functions required of them in terms of both Maltese and EU law be now set – according to some new EU whim –  to become tightly circumscribed to what overseas regulatory institutions may decide in terms of some new sort of set-up?

Are the rules and set-ups of the EBU, ESMA, EBA and EOiPIA, as presently existing and fully accepted and followed by local regulators, no longer sufficient to what the EU Commission – constantly kowtowing to the pressures which jealous foreign states may from time to time come up with – now may newly want?

Malta is a small jurisdiction. The total number of financial services firms licensed and operating from this base here is, in relation to what exists in other EU states, small.

The local regulatory bodies seek to operate in full concurrence with what the local and EU laws constantly require. Yes, it may be true that the country’s success over the last two decades in the financial services sector has been such as to bring out the extent of the pressure that our regulatory staff, even as they labour assiduously in terms of their restricted numbers, are living under on a day-to-day basis.

Is, perchance, the EU Commission now suggesting that for foreign companies and individuals registered in Malta (hence effectively becoming Maltese citizens) our regulatory staff must now come to accept some situation where – to satisfy the foreign loopholes that exist in their own legal set-ups (fiscal, financial, legal, investigative, whatever) – they will now have to have ‘sitting next to Nellie’ staff from the German, French, British, Luxembourger or whatever regulatory bodies?

I expect Commissioner Karmenu Vella to work overtime to explain to his colleagues on the commission, as well as all our MEPs, to tell their foreign counterparts the real nature of Malta’s imputed tax system, to explain to them that as an independent country we should in no way be blamed simply because the laws and practices that are allowed by the imperfect overseas laws and faulty domestic control systems of foreign states are, to them and their own domestic needs, proving inadequate.

On top of that, isn’t there in our local system a plethora of memoranda of understanding, and other set-ups, where any information that they need about their own citizens, physical or corporate (and in certain situations, even Maltese citizens) is always readily provided?

Can they point to and quote any occasion where information that was requested, according to existing laws and agreements, was not granted by the local authorities?

I sense a lot of jealousy and envy from our foreign financial counterparts and legislators at our financial services success over the years.

In terms of European financial history, this of course is anything but new. France, for example, has always envied London’s financial centre. And the Germans too, in history, did all that they could to get onto their own soil the ECB, at the expense of other equally meritorious EU states.

But these and other EU states are now seeing their own economic management, fiscal systems, control systems and whatever as failing to protect their own needs for control over what their citizens are doing.

And so, rather than cleaning up their own regulatory houses using domestic forms of discipline, they now see in the current Malta political and media use-abuse situation a good chance to hit at us and our set-ups.

Their governments and media, plus probably also with support from several misguided Maltese individuals or entities, see a fine time to lobby in whatever manner may damage the fine reputation and operational nous which over the years our country – even across the whole of the local political spectrum – has nurtured, nourished and built.

This is a dirty and unfair international political game that is played, and both as a Maltese citizen as well as a supporter of the concept of a fair and honest EU, I expect it to cease forthwith.

We are anything but perfect. But we do not expect the failings of others to serve as an excuse for us to be castigated in our own success story.

John Consiglio lectures on economics at the University of Malta and is agovernor on the board of the MFSA. Here he is writing in his personal capacity.

Sign up to our free newsletters

Get the best updates straight to your inbox:
Please select at least one mailing list.

You can unsubscribe at any time by clicking the link in the footer of our emails. We use Mailchimp as our marketing platform. By subscribing, you acknowledge that your information will be transferred to Mailchimp for processing.