The Malta Financial Services Authority (MFSA) has been criticised for reportedly “forcing” top officials to leave by offering them an early voluntary retirement scheme.
According to local newspaper Times of Malta, at least 10 senior figures have been approached, and around €1.2m (£1m, $1.3m) is expected to be paid out by the end of the year.
Abigail Mamo, chief executive of the General Retailers and Traders Union (GRTU), which represents small and medium-sized enterprises on the island, told International Adviser that the situation is worrying.
“The EU was the one to express concerns on the centralisation of power at the MFSA. The EU said that the way things are structured, the committees are set up and entailed to act as a watchdog for anti-money laundering and are composed of individuals that report to the chief executive, making the chief executive the ultimate dominant person,” she said.
“The EU said that such a committee should have greater strength in independence.”
IA reached out to the European Commission (EC) for a response, but it declined to comment on the issue.
However, a spokesperson did tell IA that “a stronger supervisory framework is warranted to maintain Malta’s reputation and attractiveness as an international financial centre”.
“A large number of financial institutions, both foreign banks and insurance companies mainly operating across borders, are registered in Malta.
“Efforts are ongoing to ensure proper supervision, but additional challenges for the financial supervisor have arisen. These are due to stricter international requirements to increase financial supervision.”
‘Changes ahead’
“Malta’s reputation is hanging on a very fine thread and everything has to be done to address the issues, and this has to be done as soon as possible,” Mamo added.
She highlighted the recent involvement of the MFSA with Satabank, which froze accounts following concerns about anti-money laundering failings.
Several customers are still waiting to receive their money back – six months later.
However, the chief executive of the MFSA, Joseph Cuschieri, during a Malta financial services roundtable attended by IA earlier this year, said that changes and reforms are high in the regulator’s priorities for 2019.
Mamo added that, “in the light of the news, the regulator should be transparent enough and give comfort on its internal dealings and decisions”.
When asked about the issue Cuschieri said: “All international regulatory organisations and institutions have been telling us that we need to boost our human resources, so that we are able to more effectively supervise a large economic sector such as financial services.
“I want to see the MFSA becoming the employer of choice in the financial services sector so that we can attract and retain the best talent.”
