The government today denied that the Prime Minister had travelled to New York to rescue failing correspondent banking agreements but said that it had sought to attract more corresponding banks to Malta.

It was reacting to a statement issued earlier today by the Nationalist Party, which urged the government to act in light of reports that several US banks had withdrawn their corresponding baking relationships with local banks.

Correspondent Banks are necessary for commercial transactions with foreign companies and also for local banks to trade in the dollar

The PN’s spokesperson on the financial sector, Kristy Debono, claimed the PM had flown to New York to salvage these relationships. The PN said it had repeatedly warned the government about the difficulties that local banks were experiencing with correspondent banks. 

It said that this development had come about as a result of Malta’s reputation being tarnished, including through the Panama Papers scandal. Mrs Debono said the government should address the issue of reputation and should also use the EU Presidency to get all parties together to build relations with correspondent banks. It should also address the resignation of the chief of the Financial Intelligence Analysis Unit. The post remains vacant after Manfred Galdes resigned in August. 

In reaction, the government said it refuted the Opposition’s irresponsible and misinformed claim in the most categorical way.  “The PM’s visit in the United states focused on bringing more work to Malta, as well as investment in new sectors, including Fintech, insurance, the prospect of new banks opening in Malta and financial services.”

The government conceded that the Maltese delegation had made an effort to attract more banks that offer corresponding banking to Malta but said it was doing this in light of policies imposed on US banks in recent years which had nothing to do with Malta.

“This is an issue that has been ongoing since the previous administration. Efforts by that administration did not yield any results. This government is working to obtain results. It is enough to note that the Al Faisal made an enormous investment in a local bank some weeks ago. Our banking sector is strong and, because our economy is doing well, good results are being achieved and will continue to be achieved, even as a result of this visit to the US.”

The government said these results did not come from irresponsible statements like the one made by the Opposition today. “If it wants to be taken seriously, the Opposition should take its information to the regulator, who was appointed by the previous administration and to whom it has free access. Seriousness dictates that after it does so, the Opposition should correct its incorrect information.”