PN Deputy Leader Mario de Marco Maltese yesterday called on local banks to facilitate loans to the private sector.

He said businesses faced stiffer challenges than their European counterparts to obtain loans from commercial banks mainly because local interest rates were double those charged in Europe.

This had an adverse effect on Malta’s competitiveness, although quantitative easing could be beneficial in this regard.

He asked Finance Minister Edward Scicluna to inform the House about the investigation that was meant to be carried out with regard to interest rates.

One had to strike a balance between ensuring the financial sector’s stability and keeping local businesses competitive, he said. Earlier in his speech he referred to the World Economic Forum’s certification last year of Malta as a credible financial centre, placing Malta’s banking sector among the top 10 in the world.

One had to strike a balance between stability and competitiveness

He said the Opposition agreed with the amendments presented, which transpose the EU Capital Requirement directive.

Dr de Marco spoke extensively about Malta’s financial services sector, which had developed over the years and which provided high quality jobs, with 800 licensed operators creating more than 10,000 jobs. It also sustained other economic sectors.

Three Maltese banks had performed well on the stress tests carried out last year by the European supervisory mechanism.

The amendments, said Dr de Marco, provided measures to avoid the mistakes committed in the past.

He called on the government to ensure that the principle of proportionality was retained during negotiations in the EU Council. The Maltese banks were small when compared to much larger ones in other EU member states, he said, adding this meant it was relatively more expensive for local banks to invest in better human resources, infrastructure and IT.

These reforms led to more rigour in the gestation of financial assets.