Financial services practitioners call for institutions to fulfill legal responsibilities

MFSA says that Pilatus Bank is subject to all prudential and supervisory rules and on-going supervisory procedures applicable to credit institutions

IFSP: "We are currently facing a situation where the country’s reputation is at stake."

Institutions and law enforcement agencies should fulfill their functions and be held accountable for their actions for the sake of the entire country, the Institute of Financial Services Practitioners said on Monday.

In a statement, IFSP said that was very concerned about the events that have unfolded over the past week, and which – it said – will undoubtedly result in the questioning of Malta’s reputation and consequently have a detrimental impact on its attractiveness as a domicile of choice for international investors.

“In particular the IFSP, on behalf of its 400 plus members and the thousands of employees they represent, is particularly concerned that the ethical fibre of the entire financial services industry in Malta is being called into question in such a facetious manner,” it said.

IFSP said that the rule of law remained the key to the proper functioning of a country and it was therefore essential that responsible institutions and law enforcement agencies effectively, and in a timely manner, take all necessary steps to ensure that the law is enforced before Malta’s reputation is irremediably tarnished.

“Each of the State’s institutions and authorities should uphold the powers vested in them in terms of law,” it said. “This is essential to restore the stability the country needs in order to function effectively, which stability has been disturbed by the current state of affairs.”

This instability was further acerbated by the manner the allegations were addressed by certain institutions and law enforcement agencies, damaging the financial services industry, IFSP said.

The financial services industry was painstakingly built by practitioners since the 1980s and over the years Malta’s reputation and stability has remained untarnished and solid, it said.

“We are currently facing a situation where the country’s reputation is at stake and politicians should be aware that this may have long-term effects on the industry, which industry, once lost to the competition, will be very difficult to recoup, and which will have an ongoing and domino impact on the remainder of Malta’s economy,” IFSP noted.

The institute said it was concerned that there appeared to be a breakdown of the rule of law.

“We should not underestimate the impact which this has on foreign investors who are investing their money and time in our country, thereby helping to generate employment and to finance the country by paying taxes.”

The IFSP urged all competent authorities and law enforcement agencies to use all the powers vested in them in terms of law to investigate any and all allegations, and ensure that the law is enforced.

MFSA: Pilatus Bank license in full compliance

The Malta Financial Services Authority said in a statement that it had granted a licence to Pilatus Bank to act as a credit institution in terms of the Banking Act on 3rd January 2014.

The application for the licence was processed and assessed in full compliance with applicable legal requirements and in accordance with the Authority's authorisation procedures for the granting of a credit institution licence.

“Pilatus Bank is subject to all prudential and supervisory rules and on-going supervisory procedures of the MFSA applicable to credit institutions,” the MFSA said. “This is evidenced, inter alia, through the on-site inspection carried out at the Bank by the MFSA in 2015 already reported in the media.”

The MFSA said it had cooperated and continues to cooperate with other competent authorities as necessary.