Two reports issued by the International Monetary Fund (IMF) and the European Commission respectively, heavily criticised government's handling of the financial services sector, the Nationalist Party said in a statement.
In a report entitled Country Report Malta 2019, issued on 27 February, the European Commission noted that Malta's economic performance, although positive, is facing sustainability challenges. The report mentions a number of factors that are impinging on the country's economic performance including inflation, the PN said through Mario de Marco,
Opposition Spokesperson for Finance, and Kristy Debono Opposition Spokesperson for Economy, Financial Services and Innovation
The report notes that "children in single-parent, and medium-skilled families are at greater risk of poverty." With regards to public finance, the report comments on the increase in public expenditure stating that government is financing permanent expenditure with temporary income. This equates with what the Opposition has repeatedly stated, that is that government is recklessly increasing public expenditure basing its spending patterns on income, including income from proceeds of the IIP scheme, which might decrease sharply in the near future.
With regards to financial services, the report notes that "Recent investigations involving money laundering have exposed serious shortcomings in Malta's anti-money laundering enforcement framework". The report also notes that Malta has made limited progress in addressing the 2018 country specific recommendations, including the recommendation to strengthen the overall national supervision of the financial services sector. The report states that "no significant steps have been taken to strengthen enforcement of the anti-corruption framework".
In a report issued a few hours later, the IMF also criticised the way Malta's financial services sector is being regulated, the PN said. In particular, the IMF noted how the Ministry of Finance Is required to endorse the human resources budget of MFSA and that the Office of the Prime Minister is required to approve recruitment "on a case-by-case basis". On this last point, it should be pointed out that the Ombudsman recently commented on the political intervention in recruitment and promotion exercises in public authorities. He said that such interventions have serious repercussion on the democracy of our country.
The report notes that the MFSA's actions have not always been timely and effective. The report goes on to say that: "Increasing inflows, including from countries generally considered to pose greater … risks, may exploit vulnerabilities in the banking sector, real estate, remote gaming, virtual assets, and the IIP. A new legislative AML/CFT framework entered into force in 2018, but according to the opinion of the European Commission (July 2018), the transposition of the EU's Fourth AML Directive is not complete and recent bank intervention cases exposed serious shortfalls in the framework. Malta is currently undergoing an assessment against the Financial Action Task Force 2012 standard".
These two reports echo the positions adopted by the Opposition over the past months and those of other organisations. A few days back the CEO of HSBC said that the damage on Malta's reputation is harming banking profits. These report clearly show that the government has failed in carrying out its duty of ensuring that our financial services sector is duly regulated. The lack of proper and efficient regulation has led to high profile cases that severely damaged Malta's standing as a financial services centre of excellence.
Minister Scicluna has recently commented that the Panama papers debacle is history, the PN said. Clearly it is not. Malta is suffering and will continue to suffer. The blame for this rests heavily on the Prime Minister and Minister Edward Scicluna, the PN said.
from The Malta Independent https://ift.tt/2TjhviB
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