Do not shoot the messenger, MEP Giegold says
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Do not shoot the messenger, MEP Giegold says

Serious change needed in the way Malta conducts financial supervision

MEP Sven Giegold has defended his recent comments about HSBC, insisting the debate about potential reputational damage by its continued association with Malta had been on-going for a while.

MEP Sven GiegoldMEP Sven Giegold

Mr Giegold sparked controversy earlier this week when he was quoted saying he would start a campaign to pressure HSBC to withdraw from the country if the Maltese government did not improve its efforts to combat money laundering. His comments drew cross-party condemnation.

Speaking to the Times of Malta, Mr Giegold said he wanted to see a serious change in the way financial supervision was being conducted in Malta.

He clarified he had not said he would start a campaign for HSBC Malta to leave but simply said that if attitudes did not change, then this would be the logical consequence.

The Malta Financial Services Authority’s CEO, Joe Cuschieri, said such calls were not the way to deal with improvements in money laundering supervision.

Finance Minister Edward Scicluna accused Mr Giegold of “political bullying” and Opposition MP Hermann Schiavone told him off.

Questioned about the motivations behind his statement, Mr Giegold said he was interested in the facts.

He said he was very disappointed after a recent meeting with the MFSA because he did not feel reassured there would be a new, serious approach to financial supervision and regulation.

Mr Giegold formed part of a delegation of MEPs who visited Malta last month to continue their investigations into the rule of law in the country.

Asked what the “campaign” to pressure HSBC’s withdrawal from Malta would involve, Mr Giegold declined to elaborate. He said international banks operating in Malta faced a real risk of reputation damage by virtue of their association with the jurisdiction.

“Instead of telling me to shut up, it would be better if they were to tell me if there was going to be a new style of supervision for banks, the e-gaming sector, cryptocurrencies and other areas,” he argued.

Among those who condemned Mr Giegold’s threats was fellow MEP Roberta Metsola, who formed part of the European Parliament rule of law delegation last month. She said all Mr Giegold would achieve with such a campaign was to recklessly worry the hundreds of people working for HSBC in Malta.

“If he thinks that action against money laundering and corruption means going after HSBC’s legitimate operations in the country, he is grossly mistaken”, Dr Metsola said.

Questioned about Dr Metsola’s comments given her status as a fellow member of the rule of law committee, Mr Giegold noted that all Maltese MEPs and other actors tended to show they stood by the financial sector.

In a statement, the Democratic Party said it was an unfortunate fact that Mr Giegold was right in his comments about Malta’s reputation.

"Post 2013, our reputation started a downward spiral with the Prime Minister refusing to hold anybody accountable for their actions. The steady deterioration has resulted in our country being placed under the microscope, and one European delegation after another has been rebuffed and behaviour which is taken for granted in any democracy has become unthinkable here," the party said. 

The party said an HSBC exit from Malta would be a serious blow to the country as a whole.

"It would be beneficial all round if the government allowed our financial institutions to work independently and to do their job of safeguarding our financial reputation. This would perhaps convince HSBC that the Maltese authorities mean business and that remaining here does not tar them with the same brush. Furthermore, with a tarnished reputation such as ours, in the financial community especially, not many bona fide banks would be willing to come here, and present banks simply cannot sustain taking on HSBC business," the party added. 

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