Get politics out of financial services

I am old enough to remember the post-1960s birth of financial services in Malta. In fact, it wasn’t even those words that were the more frequently used description; it was, rather, the term “offshore”, until even this became an unacceptable expression within IMF corridors.

When this new economic activity kicked off it was successful for many long years and the whole nation benefitted.

The personalities then involved at the core of most of what went on (the legislative processes through parliament, the setting up of MIBA, the choices of staff, creating the right foreign perceptions of us) – people like Mario Felice, Lino Spiteri and several others – were careful to ensure that that much maligned word, politics, would never ever taint the sector.

For many years, financial services grew and grew in the country. The overseas investors who set up here and the foreign interlocutors with whom companies from Malta did business all saw and instinctively felt that ours was an environment that really offered all the necessary ingredients for growth and progress.

So, when and where did we all, as a nation, suddenly start getting it wrong? I believe there is a class of people (a collective class, a group, a sector if you will) who now must seriously accept a lot of the blame for what happened over several years, including our FATF greylisting, the Pilatus Bank saga, administrative fines and other developments. This class is the collective political class, that is, right across the country’s political spectrum.

At some point in our post-1970s history, nothing more remained sacred for our political class. Any subject under the sun with which one side could hammer and clobber its adversaries became grist for the daily mill of hitting at political adversaries. Nothing was ‘non-political’ anymore, including, unfortunately, financial services.

Did Felice (son of a former Nationalist finance minister) and Spiteri (a Labour economist and former minister) ever talk about how the sector would be born and thereafter grow in Malta? Of course they did and assiduously so. But both were prudent and serious, and deeply loved Malta, thus ensuring that every developmental step would always have total cross-party consensus.

I know this may all sound as if I am nostalgically reminiscing about long past better times in an industry in which I worked for over 42 years. But the current situation must not be allowed to become a crossroads leading to ever more conflict.

Is getting politics totally out of this industry part of the answer to the current impasse? Is it wrong to think in terms of a cross-party task force that is totally trusted by all, and will silently and effectively grapple hard with every single nitty-gritty issue of what is wrong now and look at how to right it? 

As a realist I do not subscribe to the idea that financial services, iGaming, tourism, building and construction and other components of our current economic mix will and must for ever remain the essentials of Malta’s future economy. 

Today, one big problem among others is the future of financial services.

Problems with other sectors have also hit us as we move into the future (for example, our future tax structures) and, so, if we all really love our country the time is now ripe for a totally fresh look at ourselves.

We must try, as far as possible, to leave political warfare out of whatever actions we may take going forward.

John Consiglio

John Consiglio lectured in the Department of Banking and Finance of the University of Malta for over 25 years.