The statement issued by the Malta Financial Services Authority yesterday beggars belief.

The fact that MFSA felt duty bound to issue a statement on Easter Monday, a bank holiday, shows that the authority is sensitive to the claims and charges that are being leveled against it and the calls for it to held to account for the licensing of the Pilatus Bank.

But the statement itself, for all its haughty tones, opens up to further questions and does not answer the basic question regarding its efficiency in supervision of the banking sector.

MFSA tells us it engaged an overseas ‘intelligence’ firm. It does not tell us the name of this ‘intelligence’ firm, but it seems to expect we should be content to be given this snippet of information, bow our heads, ask pardon for having doubted the integrity of the authority and promise not to do this again. It then adds it kept up a regime of periodic inspections of the bank which does not seem to have noticed the line of PEPs making a beeline for the bank’s services.

Let us go back to the original decision to give the bank its licence. Did MFSA or the ‘intelligence’ firm not notice the lack of experience in banking or the sheer youthfulness of the bank’s owner?

This was a time, remember, when the owner was being investigated in the United States: how come MFSA and the ‘intelligence’ firm not notice that things were amiss?

After licencing, the bank found itself at the centre of many allegations including those made in Malta by Daphne Caruana Galizia, apart from FIAU reports, conclusive or otherwise, accepted or otherwise by the police. Did MFSA notice these allegations and did it investigate them?

Or did it do nothing until the penny dropped and the United States investigative offices force it to take the immediate steps it announced within hours of the US announcement?

The MFSA statement reeks of a haughty ‘Who are you to question me?’ approach. But let us remind MFSA of another list that should be brought to the public’s notice: from our Sunday paper: “[The outgoing MFSA head, Professor Joe Bannister] relinquished his official MFSA post leaving it holding a set of glorious trophies including among others, Falcon Funds Sicav plc; PDK Financial Services Limited; GlobalCapital Financial Management Limited; Nemea Bank plc; Maltese Cross Financial Services Ltd and now, crowning the list, will be Pilatus Bank plc.”

It is this shoddy approach to issuing licences and regulation that is undermining all the efforts by so many practitioners to promote Malta’s financial services sector. For an authority to licence and approve Pilatus Bank in the midst of all the allegations that were made is to shut your eyes in the face of all evidence.