Updated 9.30pm with PN statement
Finance Minister Edward Scicluna said on Monday that the government was working relentlessly on improving Malta’s anti-money laundering supervision.
Addressing a press conference about a recent International Monetary Fund report into Malta's financial sector, Prof. Scicluna insisted that these problems had not simply come about in 2013.
He said the report found that the banking sector remained sound and profitable. Tests undertaken by the IMF found that the sector would remain resilient even in the worst case scenarios, the Finance Minister said.
The Finance Minister said it was only natural that gaps or shortcomings were identified in such reports. He said such gaps were works in progress that still had to be tackled.
According to the report, “urgent action” is needed to address shortcomings in banking supervision.
The Finance Minister acknowledged that a number of institutions had to be bolstered, and a lot of work was being done in this regard.
He dismissed claims by the Opposition leader that Malta had not implemented the EU’s fourth anti-money laundering directive.
Prof. Scicluna said two amendments to the legislation were going to be carried out after the European Commission provided its feedback about Malta’s transposition.
Last July, the Commission had written to the government highlighting the parts of the directive which had yet to be fully transposed to Maltese law.
Banking supervision
Silvio Schembri, the parliamentary secretary for financial services, said some of the IMF’s recommendations when it came to banking supervision had already been implemented.
Mr Schembri said the government had taken on board the IMF’s feedback on decentralising recruitment at the Malta Financial Services Authority.
The IMF said in its report the fact that the MFSA’s recruitment budget needed to be approved by the Finance Minister and all recruitment approved by Mr Schembri’s secretariat eroded the financial watchdog’s independent.
The MFSA also came under criticism by the IMF for its abolishment of its supervisory council, whose functions were being taken over by an executive committee answerable to the CEO.
Mr Schembri said the MFSA would be forming an enforcement committee that was independent from its CEO.
The parliamentary secretary said the aim of the IMF’s report, which was in fact requested by the government, was to learn and improve.
“It has been 17 years since the last financial stability report by the IMF. We asked the IMF to send its experts to analyse our system in detail”.
He said such reports should not be taken in isolation and improvements on multiple fronts had been made since 2013.
PN: 'Minister must shoulder responsibility'
The Nationalist Party (PN) said later on Monday that Prof. Scicluna's claims that bullying by MEPs had damaged Malta's reputation were "insulting" to various authoritative bodies which had flagged a worsening situation.
In a statement signed by party spokespeople Mario de Marco and Kirsty Debono, the PN said the IMF, Maltese Chamber of Commerce, and the CEO of HSBC had all raised concerns.
"It is clear that the only ones to blame are Minister Scicluna, Prime Minister Joseph Muscat and their colleagues in cabinet. Edward Scicluna and his colleagues have destroyed the excellent reputation the country once enjoyed in the financial services sector," the party said, calling for the minister to shoulder responsibility.