Repeated calls from a government minister for the resignation of the financial services watchdog are harming the industry, according to practitioners in the field.
Education Minister Evarist Bartolo has insisted that Malta Financial Services Authority chairman Joe Bannister’s position was no longer tenable because of directorships he held in funds in the Cayman Islands, a tax haven.
Mr Bartolo yesterday vowed to keep up the pressure on Prof. Bannister, adding that supervision at the MFSA had weakened.
The situation has left many in the industry baffled at how a minister was undermining someone whose appointment was reconfirmed by his own government. Prof. Bannister was reappointed in 2014 for another five-year term and still enjoys the Finance Minister’s and Prime Minister’s trust.
A veteran tax adviser, who chose to remain anonymous, said the constant calls for resignation were not good for the industry.
“Attacking the regulator in this way is wrong. It hurts the sector. These things should be discussed within Cabinet,” the adviser said.
The financial services sector prides itself on having enjoyed political consensus for 25 years, ever since Parliament passed legislation to bring Malta in line with EU standards.
“This is one of our strongest points and I do not see any reason why anyone should demolish it,” the adviser said.
An auditor from one of the big four firms, who spoke on condition of anonymity, said public exchanges of this type were not good for the sector.
“There are the appropriate forums where such concerns can be expressed and, although things that are wrong should be exposed, this should be done with facts in hand and not in a sensational way,” the auditor said.
Prof. Bannister last week said the Cayman Islands directorships issue was closed in 2012 when it first arose. Then Prime Minister Lawrence Gonzi and then Opposition leader Joseph Muscat found nothing wrong and informed him it was a closed matter, he said.
Kenneth Farrugia, chairman of Finance Malta, a body that promotes the industry, did not want to comment on specific cases but expressed concern over “the unhealthy environment” being created.
“Financial services has enjoyed cross-party consensus and this should not be lost, because it risks tarnishing the sector. All stakeholders, including the media, should be aware of the sector’s sensitivity,” Mr Farrugia said.
He noted that there had been too many incidents recently that turned a negative spotlight on the sector.
“There are appropriate forums where certain issues can be dealt with… there have been comments from both sides of the political divide and from the media that may not have been sensitive enough,” Mr Farrugia said.
kurt.sansone@timesofmalta.com