The Malta Financial Services Authority urgently needs to recruit staff, especially accountants, but government bureaucracy is slowing down the recruitment process, The Times Business has learnt.
The delay by the government in approving staff recruitment at the MFSA was in fact recently highlighted in an independent assessment of the Authority by an international team of experts.
The assessors, led by Piero Ugolini, a former Assistant Director of the IMF, concluded that changes in EU legislation have created a demand for additional staff at the Authority but the recruitment process was being hindered by government regulations introduced in 2005.
“A circular issued by the Office of the Prime Minister – OPM no 14/2005 of April 25, 2005, has introduced a process for recruitment in the public sector organisations. Under this process, recruitment in the MFSA has to follow these procedures. The intent of the OPM circular was to ‘ensure a more efficient and effective public service and public sector’,” the report said.
It added: “While resources to date have been generally adequate for the scale and scope of MFSA’s supervisory functions, new regulatory requirements and obligations resulting from coming changes in EU legislative frameworks will have various implications for staffing.
“This, along with the need to increase the frequency and scope of on-site examinations, will require additional staff. However, the 2005 OPM circular has delayed considerably the time required for recruiting staff in the MFSA. As a result of the cumbersome process and administrative layers under which the MFSA has to operate, the recruitment process could take several months and impact on the workload of the MFSA staff. The process should be streamlined and shortened.”
Contacted by The Times Business, MFSA chairman Joseph Banister said: “We are doing whatever we can to speed up the recruitment process at the MFSA.”
The assessment was very favourable towards the MFSA’s adherence to its international and legal requirements and pointed out that great improvements had been noted since a similar report was published in 2003.
Following the 2003 assessment by the World Bank and the International Monetary Fund of Malta’s financial system, the MFSA continued to subject its regulatory structures to international scrutiny. Internal audits by international experts were carried out in 2005 and 2007, however, because of the 2008 international crisis the board of governors decided to carry out an independent assessment in 2010 and in order to increase transparency the board also decided to make the assessment public.
Consequently, Mr Ugolini, who was also mission chief to Malta for the IMF 2003 assessment, Richard Nunn (Federal Reserve, USA and consultant at the IMF) and Michael Kehr (German Regulatory Authority and a consultant to the IMF), were invited to carry out the independent assessment.
A presentation of the report was given last week by Mr Ugolini to a group of invited guests including Prime Minister Lawrence Gonzi and Finance Minister Tonio Fenech.
The report highlights that Malta’s financial services industry – the main core areas being banking, insurance and investments – employs about 7,000 people and is responsible for contributing almost 4.3 per cent of all tax collected in 2008. In 2009 total income tax collected from companies engaged in financial intermediation is estimated to have reached €100 million.