Clean money

Recently, the governor of the Central Bank of Latvia was arrested by the anti-corruption police suspected of soliciting bribes and a leading bank was accused of laundering tens of billions of dollars.

It is significant that it was US officials who had sounded the alarm by highlighting irregularities at a eurozone bank and even commented that EU regulations needed to be strengthened as the fight against money laundering should not be left to member states. There are also indications the US is ready to step in if EU regulators are unable to clamp down on money laundering.

The Financial Times compared the situation of Latvia to that in Cyprus after the 2013 financial crisis, both countries being offshore banking centres for Russian money. It said that “the events are a reminder of the surprises smaller, newer EU members can throw up”. One wonders if he had Malta in mind.

Latvia’s finance minister is reported to have expressed the government’s determination to root out graft everywhere. Interestingly, the chairman of the European Central Bank’s supervisory board is on record as having said that the member states’ decision to retain responsibility for tackling money laundering has “left the ECB without the necessary investigative powers to uncover such deficiencies”.

Malta was also mentioned in the Financial Times report mentioned above. Bundesbank president Jens Wiedmann who, it is rumoured, is a leading contender to replace Mario Draghi as ECB head, was reported saying when discussing if the next ECB head should come from Germany or another EU big guns: “If you say we would never have somebody from Malta at the ECB, I mean how would the Maltese feel? Do you think they would be willing to accept ECB policy? If you exclude a country and say nobody from Luxemburg, Malta, whatever; this is not how it should work.”

Malta really seems to be hitting the limelight, this time for the right reasons but, unfortunately, the opposite is generally the case, especially where suspected money laundering activities are involved.

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