That’s it! No more excuses! No longer should any person appointed to any Maltese regulatory authority or agency, be it in a board, executive, or whatever other capacity, be able to say that there is no vade mecum available for him to become familiar with the duties and responsibilities of a regulator.

David Fabri’s book has now definitely put to the sword any such claims or positioning, and anybody venturing into any such positions should make it absolutely de rigueur that both he and all his staff read this book.

The basic background underlying this major work is the tumultuous history of the Malta Financial Services Authority where Fabri was the executive backbone from its birth under the MIBA act in 1988 up to 2017 when he moved to academia in our alma mater’s Faculty of Law.

But the book is much more than that. It is an extraordinary tour de force of analysis of all which that much-maligned word “regulation” should, for the honest and objective, carry with it. And that is indeed a very heavy and onerous remit. 

One will find treated in this wonderful book the good, bad, under-, over-, efficient and effective manners of deregulation and re-regulation (and their absences), as well as an exposition of the endless evolutions in the history of financial (and other) regulation.

By the time one gets to the book’s epilogue, it becomes glaringly obvious that Fabri would have made excellent use of the theory of financial services regulation, and perhaps of law too, plus his own years of practical on-the-job experience at MIBA, MFSC, and MFSA, to chronicle all the ills, mistakes, and inherent misdeeds that afflicted our financial services regulators going as far back as the 1980s.

These were indeed many: skinflint funding at its start, poorly drafted legislation, mimicking structures as adopted elsewhere, personal aggrandisement or even outrightly illegal behaviour by several personalities in the FS industry or its regulation, poor treatment of customers’ needs, the many case studies of institutional failure and the sheer inability of even the best regulatory institutions everywhere to keep up with either market or, now, ESG developments affecting the world of regulation everywhere.

At my last count, the US is now up to 18 regulatory institutions, the UK persists with its “twin peaks” structure, CONSOB seemingly continues to dominate the scene in Italy, Bulgaria has five FS regulators, and elsewhere either regulatory institution stability, or the tools with which regulators will be required to work, are, and probably will continue to remain, ever evolving.

In Malta, we have many persons occupying regulatory positions’ for which they were often largely unsuited

Soon, for example, the people in the insurance industry will have to get their teeth into a new EU directive similar to banking’s BRRD (Bank Recovery and Resolution Directive). And, meanwhile, many will continue to mistakenly think, and act, as if “regulation” and “the laws” are one and the same thing! They may be “related” but certainly anything but the same.

There are many concepts worth brooding over as one proceeds through this important book. All of which might even push the reader to the inevitable quis custodiet ipsos custodes (who will regulate the regulators?) issue.

And all of this, and much more, is structured around what is in fact Fabri’s position that, in Malta, we have many “persons occupying regulatory positions’ for which they were often largely unsuited”, and that, to boot, we have also had instances where “some persons [were] appointed to important regulatory posts [who] did not even believe in regulation”. 

Inevitably, one might here also be drawn to a question which Fabri does not tackle, namely that of whether regulators should first have spent time actually working on the other side of the fence, in a financial services private sector institution, before being considered for any position in a regulatory authority.

Fabri firmly believes that regulators and regulated operators who aim to do the right thing will achieve the objective irrespective of weaknesses or deficiencies in the law, or in the design and structures enforcing it.

This indeed may be deemed to be the basic inspiration of this study, which is open, honest, written in fine style right through. One could conceivably have adopted different structures to cover some parts of the book, but all the chapters are of invaluable importance.

These, 10 in all, cover, inter alia, his personal involvement and experience in the “offshore” finance world, failures of rogue banks and supervisors, the international aspects of FS regulation, cooperation between regulatory authorities (a part of the book where this reviewer felt more treatment could have been given to the Basel process), comparative regulation, the protection of consumers’ interests, a very important study of insider trading and market abuse, the issues and shortcomings of local regulation, and of course comprehensive treatment of what is good and bad regulation.

This is a book which really analyses in depth the role of financial regulators, what should all the time be their inspiring ethos and manners of existing, operating, environment, when where and how they act with impact on consumers of financial services, the law and its sources, drafting, application, and all that revolves around their institutions.

After reading this book nobody will fail to come round to appreciating how much more seriously regulation needs to be taken in every country.

John Consiglio has been teaching Banking Regulation in the University of Malta for the past 25 years.