[WATCH] Financial services regulator to continue being strengthened 'under OPM guidance'

The Prime Minister said placing the regulator under the supervision of a parliamentary secretary working within his Office would continue the process of ‘beefing-up’ the institution

MEUSAC head Vanni Xuereb (left), Prime Minister Joseph Muscat (centre) and parliamentary secretary Aaron Farrugia (right). (Photo: James Bianchi/MediaToday)
MEUSAC head Vanni Xuereb (left), Prime Minister Joseph Muscat (centre) and parliamentary secretary Aaron Farrugia (right). (Photo: James Bianchi/MediaToday)

Prime Minister Joseph Muscat has said that having the Financial Services sector under the supervision of the Office of the Prime Minister sends a political message, that government will continue “beefing-up” associated institutions, including the Malta Financial Services Authority (MFSA).

Muscat was speaking to journalists following a meeting of the Malta EU Steering and Action Committee where he was asked about recommendations made by the European Commission in its country-specific report for Malta where it was noted that “the ability of a relatively small supervisory authority to oversee a large system…is under pressure”.

“We have already started the process to beef up our institutions,” said Muscat. “During the period since the MFSA was set up, it has served us well and we will be looking at ways of building on this.”

He said there was “a regulatory discussion on a European level on where the role of the central bank ends and where that of other regulators starts”, adding that there were many different perspectives on the subject.

Muscat added however that the government bases itself on “reviews of international institutions, including Moneyval.

“[Moneyval] used to scrutinise Malta every year and now they are doing so every two years,” he said. “These are reviews we will continue working to satisfy.”

Asked about Malta’s position regarding a possible attempt by the commission to oblige intermediaries working in the Financial Services sector to register “aggressive tax-planning” to register with authorities, Muscat insisted that one would first have to see what the “commission is saying”.

“If it is a question of tax evasion it is something we agree with,” he said. “If on the other hand it is simply something to remove tax competition that is something different.”

He added that tax competence should ultimately remain at the discretion of each member state.

While addressing the MEUSAC meeting, Muscat said that it was a good time for the country to start gathering conclusions from the presidency, which is soon coming to a close, adding that he would not be passing any judgement himself.

What was certain, he said, was that the presidency had provided the country with a great opportunity for capacity building. Muscat said that there were “abilities” that Malta had so far not learnt, the retention of which would be one of the presidency’s main legacies.

Photo: James Bianchi/MediaToday
Photo: James Bianchi/MediaToday

In addition to the acquisition of new skills, Muscat said that the presidency had also opened the doors of a number of institutions and agencies to the public in general.

Furthermore, the Prime Minister also said that, over the four years leading up to the presidency and the six-month period in which that work came to fruition, the presidency had helped people working within these same institutions, as well as others, to widen their network of contacts, with many having built “personal and professional relationships with many interlocutors across Europe”.

Muscat insisted that the challenge for the country was now for it to avoid “the illness” exhibited by the country whereby it is not able to capitalise on a such events, adding that the skills learnt must make their way to all levels of public life, in order for them to contribute to Malta’s continued Europeanisation. 

Prior to the start of the meeting it was announced that MEUSAC had recently been relaunched as a public agency and Muscat said that this would allow things to be done better, and according to the wishes of many members of the committee.

He added that the fact that the agency fell under the same portfolio as social dialogue would allow for new opportunities, including increased “synergy” and collaboration.

“We have seen what can be achieved [with more synergy] from our experience with the minimum wage,” said Muscat.


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