Finance Minister Edward Scicluna this evening said that that the Greek government should attempt to rebuilt trust with all of its creditors, and work to finally stabilize the economy. Last month Eurozone finance ministers decided to extend the bailout for Greece by an extra four months.
As part of the extension deal, Greece was obliged to present a summary of its planned economic reforms including plans to combat tax evation and corruption and creating a fairer tax system.
During the second reading of banking regulations in parliament tonight, Prof. Scicluna said that parliament has often discussed regulations for the banking sector, particularly following the financial crisis in 2008. To deal with the crisis, Greece had to ask other countries for assistance.
Prof. Scicluna said that Maltese banks managed to remain profitable although some investment companies suffered as a consequence of the crisis.
Through implementation of the bill, financial agencies will be required to implement a set of regulations for procedures to be adequately supervised.
He added that given local banks managed to go through the financial crisis, it was no surprise that they managed to pass stress tests carried out at a later stage. However, he said, existing practices can still be improved, and this is exactly what the bill in question aims to do.
Businessmen facing high interest rates – Mario de Marco
PN’s deputy leader Mario de Marco said that statistics have shown that Malta’s economy has continued to grow and the banking sector has remained strong, with the Monetary Fund describing it as resilient.
The bill being debated, which is approved by both sides of the house, seeks to strengthen provisions for investment companies. However, Dr de Marco stressed that local authorities need to ensure that amendments do not in any way interfere with Malta’s competitive edge.
He noted that a number of local businessmen find it difficult to borrow money from banks because of high interest rates, which are almost double those, offered across European banks. “We can’t introduce more provisions, while at the same time making it more difficult for SMEs to start up or expand. There needs to be a balance,” Dr de Marco said.
Banking sector contributes for up to 25% of economic growth
Labour MP Charles Mangion noted that the banking sector contributes between 20%-25% of the economy’s growth while offering a higher than average wage to its employees.
Mr Mangion said that capital requirements directive introduces regulations for better governance and more transparency. Banks will have certain capital requirements to battle financial turmoil. This directive ensures that banks have enough liquidity. Maltese banks register a high score when it comes to converting assets into cash.
Mr Mangion however said that Malta does not dedicate enough capital for innovation, and this needs to be addressed imminently, by using the local university to carry out research.