There is still no sign of when the “succession process” to replace the head of the financial services watchdog will commence, though Prime Minister Joseph Muscat said it would begin towards the end of the year.
When asked about what was happening, a spokesman for the Malta Financial Services Authority directed this newspaper to the Office of the Prime Minister, which, however, has so far failed to answer questions on the matter.
Dr Muscat made the comments on the “succession process” in May, at the height of the election campaign, when serious questions were being raised about MFSA chairman Joe Bannister following a damning report by the government’s anti-money laundering agency. The investigation was related to Pilatus Bank.
At one point, former Opposition leader Simon Busuttil declared that if the Nationalist Party were elected to power, he would not retain the long-serving chairman of the financial services watchdog.
It subsequently emerged that Prof. Bannister had already requested to step down before the end of his fourth successive five-year term, which expires at the end of 2018.
This was announced by Dr Muscat during a press conference in which he pointed out that the MFSA chairman had expressed his wish at the start of this year, citing “personal” reasons.
Dr Muscat noted that Prof. Bannister would be stepping down after Malta’s presidency of the European Council was over at the end of June 2017. The “succession process”, as the Prime Minister put it, would begin towards the end of the year.
Once I step down, I will not work for any entity that was licensed by the MFSA
Dr Muscat also indicated that the person succeeding Prof. Bannister would first have to undergo a grilling session in Parliament to ensure the new chairman would enjoy wide support.
He had also referred to plans to restructure the financial services regulator.
When contacted by the Times of Malta about the succession process, an MFSA spokesman declined to reply to questions, saying they should be referred to the Office of the Prime Minister. A set of questions were then sent to Castille, but no replies had been received by the time of writing.
Contacted by phone, Prof. Bannister said: “The ball is in the Prime Minister’s court, because, by law, he is vested with the authority to nominate my successor.”
He confirmed he had asked the Prime Minister to allow him to “retire” before the end of his five-year term for personal reasons. Prof. Bannister insisted that, to ensure a smooth transition, there had to be a detailed handover.
He was also keen to quell speculation over his future. “Once I step down, I will not work for any entity that was licensed by the MFSA,” he insisted.
First appointed to head the MFSA in 1999, under a Nationalist government, Prof. Bannister was reconfirmed by three successive administrations, including, in 2013, when Labour was returned to power.
Criticism of Prof. Bannister also came from the Labour camp, notably from Education Minister Evarist Bartolo, who accused him of a conflict of interest in 2012. Mr Bartolo last year described the MFSA chairman’s position as “untenable”.
Prof. Bannister rejected claims of wrongdoing and of having turned a blind eye to any potential conflicts of interest.
The Paradise Papers, released earlier this month, indicated that Prof. Bannister was involved in a British Virgin Islands-based company that invested in a Russian mining venture.
Prof. Bannister insisted his role was that of a non-executive director.