Until some years ago a building of eight or 10 storeys was considered to be a high-rise. Now we are seeing buildings of 30 or 40 storeys sprouting in different areas. The Planning Authority is more disposed to approve these large projects while commercial banks are more liberal when approving long-term loans and therefore complicit in this current state of affairs.

The ODZ does not mean what it should mean. So, why should developers or, more specifically, speculators hold back if there is a penny to be made.

I am sure that, after the rich owners move into their luxury apartments, there will still be, sadly, people sleeping rough.

Much has been written about fumes and traffic jams that such projects will probably cause, so the PA is trying to appease the public and persuade the gullible that tunnels will be built to solve the traffic problem and also presumably to cart away the debris following the demolition of the existing buildings.

Well, if they are earnest about it, let them first build the tunnel and then start demolishing the existing building.

But in recent years the PA has issued so many contentious permits contrary to existing rules, even within the ODZ, that it has finally lost its bearings and credibility to such an extent that now every green patch or elegant building is not safe from the ravages of developers and speculators.

But what worries me more is the financing of these mega projects. I am sure that the developers themselves do not dig into their pockets to finance these multi-million money spinners. The Electrogas project, for example, would not have got off the ground had not the Finance Minister guaranteed the €360 million loan (with our money, of course). Now that the government guarantee has been withdrawn I wonder with what it has been replaced.

Circumstances have changed since the 2008 crisis, more particularly where banks’ lending norms and practices are concerned.

Banks used to insist that developers put in a share of the cost themselves before the bank steps in. I believe that some banks are nowadays more lenient when it comes to loans/developers’ money ratios, and when agreeing to repayment terms. Customers are even able to ‘borrow to rent’.

If the Development Bank is unable to finance these kind of projects, then we need some other institution to do the job

Front finance has lost its meaning in some cases. When banks agree to finance a mega project they must necessarily also agree to a long repayment programme.

In the notes attached to the local banks’ balance sheets, the repayment maturity of the bulk (over 50 per cent) of loans and advances to customers are grouped under the heading “More than five years”. Should not shareholders ask at their AGM how much of the loans are repayable over 10, 15, or 20 years since these are all over five years?

When the Minister of Finance set up the Malta Development Bank (operations commenced on December 11, 2017) I was hopeful that local mega projects would fit in the mission and strategic objectives of the bank.

But commercial banks are still cheerfully dishing out loans in millions.

Wherever one can see a tower crane one can safely presume that there is a huge bank loan behind it. Perhaps it is opportune for the minister to revisit the modi operandi of the commercial banks and consider now that the Development Bank is operating, whether some sort of capping should be placed on the commercial banks’ total exposure to specific sectors of the market and, if necessary, proposals that fall outside these limits are assessed by the Development Bank.

If the Development Bank is unable, for some administrative reason, to finance these kind of projects, then we need some other institution to do the job provided that it can fund its operations from sources other than the commercial banks. Otherwise, we will be going round in circles. Once the minister is at it, he may think whether it is time to relinquish the golden share the government holds in the Bank of Valletta, which gives him and his successors the right to appoint the chairman, thus taking his finger out of the pie.

In my opinion, it would also be a salutary measure to rotate the banks’ external auditors so that no auditing firm audits the same bank for four or five consecutive years. We do not wish that the Pilatus tangle could be allowed to happen again.

We are living in “feel good” times of surplus balances and optimism and I am sure that there are those ready to say that things can only get better, but circumstances in Malta have changed materially since 2008 and although we are part of the EU with a well-regulated banking sector, Malta is a small country with particular market cycles especially where the property market is concerned and, therefore, some tailor-made fine-tuning may be a good and necessary thing for us.

We cannot allow the small saver and pensioner to carry the risk that the developers should shoulder.

Blind optimism prevents one from seeing things coming and while I am not saying that anything is about to burst, I am sure that there are those who are ready to see me as a scaremonger. To these I would reply that prudence and vigilance were never a bad option and remind them of the wise Latin adage: Si vis pacem, para bellum (If you want peace, prepare for war).

Joe Pace Ross is a retired banker.

This is a Times of Malta print opinion piece