About 500 cars are being licensed every month to join those already jammed on our roads. Every additional car increases pollution, the travelling time needed to reach one’s destination and reduces further the number of scarce parking slots.

I cannot, therefore, understand why, despite the chaos on our roads, banks continue to advertise loans to acquire new cars.

Some banks will also grant long-term loans to buy a yacht or a cabin cruiser. These need marinas where to berth. They pollute the waters of the bays enjoyed by swimmers and residents.

Yet, the flotilla of sea craft coming in from Comino, Gozo and Sicily every Sunday evening is a clear indication that the banks are being very successful in their campaign to dish out more loans.

As if this is not enough, banks are ready to accommodate those who fancy buying a second property to hold as an investment or to rent out on a long lease. This is good news for developers and speculators as it fuels the demand for property but, unfortunately, this also ensures that tower cranes, blocked roads, dust and the erosion of open green spaces are here to stay.

How can banks ignore this hue and cry against congested traffic and unrestrained construction and continue to churn out non-social products?

Clearly, the banks are contributing in no small measure to the situation we are in. All of us profess adherence to the ESG ideals but forget all about them as soon as the bottom line is sufficiently lucrative.

In these hectic times, should not our commercial banks stop for a moment and consider whether and to what extent it is wise to lock up so much of their customers’ deposits, which are repayable on demand, to finance long-term loans as indicated above?

Do the banks, or the regulator, for that matter, have a declared policy regarding the maturity ladder of deposits vis-à-vis loans. In banking, not all that is permitted may be prudent.

It was during the stewardship of the late Louis E. Galea, doyen of Maltese bankers and a man of great acumen and foresight, that his bank saw the need to establish a subsidiary, Barfincor (later named Lohombus), to hive off the growing demand for long-term house loans from its commercial parent. A prudent and commendable decision.

But, today, Lohombus is no more and the commercial banks have to – perhaps willingly – carry the load of long-term loans themselves.

Nonetheless, for some reason, the banks remain liquid and need to offload part of their surplus money by way of long-term loans as indicated. But they know that this money inevitably finds its way back into the system in the form of new money for another bank, which, in turn would dispose of it in a similar manner. A perfect vicious circle or, if you like, a crazy race to the bottom.

It is hoped that the declared intention of the minister to mop up this uncollected tax bears fruit. There are €5 billion ready for the picking- Joe Pace Ross

Perhaps it is time to have a substitute for Lohombus. Yet,  the government, through the regulator, is acquiescently silent at this state of affairs because it oils the construction industry which, unfortunately,  remains a mainstay of our economy.

One may ask but where do the banks get all this money from in the first place? The answer lies in the finance minister’s statement that there are €5 billion in uncollected tax.

I always double-check this figure before I write it down because it is so unbelievably high. My hunch is that this uncollected tax, wherever it was held, found its way – in one way or another, directly or indirectly, in small amounts or large, through clever undetectable money laundering operations or otherwise – into the vaults of the banks.

It is money that belongs to the exchequer who should have no qualms to siphon off into his coffers the money belonging to the defaulters and distribute it to those mostly in need, that is, the pensioners and widows who are struggling to cope with inflation.

It is hoped that the declared intention of the minister to mop up this uncollected tax bears fruit. There are €5 billion ready for the picking.

If the minister is successful in his endeavours, the effect on the banks would be such that they may have to revise their business plans and products and, with the right directives, the regulator can inject some sanity into the system. It is long overdue.

We must support the minister in this arduous task. If we do not, he will have to borrow a thousand million euros every year. And why must he do this when he is sitting on a mountain of uncollected tax?

We cannot borrow such amounts every year without having eventually, at some future time, to accept painful austerity measures and make sacrifices to redress this problem.

We live in a small island where everybody knows everybody else; where wealthy magnates are close to politicians; where votes matter.

If the minister is to be successful in his task, he must engage foreign independent experts to do the job. It will be costly but the returns will justify the decision.

Now is the time to take decisions; to adjust the tiller. A stitch in time would save nine!

 Joe Pace Ross is a retired bank manager.

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