Greylisting left no impact on real economy, BOV chairman says

Malta’s financial greylisting has left no major impact on the real economy, BOV Chairman Gordon Cordina said on Tuesday.

During a company press conference, Cordina explained that the recent greylisting has not had major impacts on the real economy. Having said that, he remarked that the greylisting has been a short-lived experience.

“If excessively prolonged, it can start having effects on the wider economy,” he warned.

However, sectors that don’t currently rely on credit or bank liquidity could be most affected by such shocks, Cordina said.

 “The bank augurs, like other operators in Malta, that the situation will be resolved in the quickest possible way.”

Similarly, BOV operations have been left unscathed by the greylisting, according to CEO Rick Hunkin.

At the same conference, Hunkin explained that BOV works closely with correspondent banks and bank partners, the majority of which have already factored in the possibility of greylisting.

He admitted that some banks have expressed reservations in processing payments from Malta. However, these are banks that BOV are not in direct partnership with.

“This doesn’t mean that there has been no impact. All international banks have their own risk appetite,” he said.

The greylisting comes with its bureaucratic downsides. According to Hunkin, there has been an increase in paperwork and in the justification of international payments. There were also isolated cases where payments had to be returned back to the customer.

At present, there is no direct indication of any concerns. But Hunkin warned that a prolonged greylisting would force international banks to reevaluate their positions on Malta.

“We’re hopeful that Malta will make good progress,” he said.

In June, Malta became the first EU member state to be greylisted by the international Financial Action Task Force.

This spurred worry among the business community, who feared that the greylisting will leave a negative impact on the Maltese economy.