A think-tank to come up with ideas to map out the future of financial services in Malta, maintaining the levels of excellence achieved so far is to be set up, Finance Minister Tonio Fenech said this morning.
Opening the fifth annual Finance Malta conference, Mr Fenech said:
"We need to continue to think outside the box and identify the ways to ensure a sustainable growth in financial services; whether in terms of fiscal or non-fiscal incentives, policy or regulatory developments and educational and training requirements, amongst others.
"In this manner, financial services can continue to support our economy in achieving better levels of growth, investment and job creation."
Mr Fenech said that Malta had to do its utmost to protect its financial stability, balancing the constraints of fiscal consolidation with the need to foster growth.
Across Europe, he said, there was a growing realisation of the need for policies which promoted growth and jobs and restored full and balanced economic health.
Malta, he said, was pulling its weight even on the European stage. It contributed to the European Stability Fund, and pledged funds to the bailout of Greece.
The European Union was doing a lot to seek to prevent the turmoil the world suffered over the past few years. This included a reorganisation of the regulatory structure of financial services, a range of new regulations and directives all aimed at ensuring stability and protecting the interests of investors, tighter capital requirements for banks in Basel 3, and the regulation of credit rating agencies.
Malta, compared to the rest of Europe, was in a very fortunate position.
"Our banks have and continue to finance all their loans from deposits received, which has allowed them to outperform most banks around the rest of Europe and provides them with the resilience needed to survive a global credit crunch."
Mr Fenech noted that the aims of the reform were good, and for the most part the government supported it. However, there were two particular measures which it believed would not be in Europe and Malta's interest.
The first was the Financial Transaction Tax, on which it maintained its position that unless introduced on a global level, it would be damaging to the European, and Maltese economies and could drive financial services companies beyond European shores.
Malta also expressed its opposition to the proposed Common Consolidated Corporate Tax Base, arguing that this would not encourage efficiency within the European Union.
Moreover, it believed companies would begin to look outside the Union to locate their investments if certain fiscal advantages no longer remained available in the EU.
Earlier in his speech the minister noted that there were now more than 500 funds based in Malta, with a net asset value of close to €8.5 billion.
Malta continued to attract insurers, both captives and general business. The 25 banks registered in Malta – and the one providing services under the freedom of establishment rules – offered a broad and very competitive range of services on the domestic market as well as to international clients.
The segments of the industry that are not regulated are also doing well. People involved in corporate services, from sole practioners to large, internationally connected firms, all report that they are constantly busy registering companies, providing registered offices and a myriad other services, he said.