The possibility of BOV having difficulties to process USD transactions after losing its last US corresponding bank could potentially lead to the collapse of vital sectors, the Nationalist Party said on Wednesday.

It was reported on Monday that ING will stop its relationship with BOV in December.  

“The US dollar is the most used currency in trade. BOV is Malta's largest bank and reportedly the only major bank locally handling gaming companies and payment gateways. This news is therefore of grave concern and its impact can be significant,” the PN said.

“The Opposition consistently warned Government and regulators about  the risk of our banks, in particular BOV, finding difficulty in retaining correspondent banking relationships and subsequently start relationships with new correspondent banks.”

As expressed by the Malta Banker's Association (MBA), this development hits at the heart of Malta's financial system. It is even more worrying if this action was not a direct consequence or directly related to BOV's operations. The Minister of Finance's silence on the matter is deafening, the PN said. 

In the statement, signed by MPs Mario de Marco and Kristy Debono, the PN lashed out at the government’s lack of a serious commitment in the fight against the crime of money laundering which, it said, is impacting Malta's reputation. This is in turn impacting the financial services industry. “The same criticism was levelled against Government in the draft Moneyval report, the final version of which will be adopted and published in the coming weeks,” the party said.  

“The risk reward factor for the correspondent banks to keep or start a relationship with a local bank is too high due to the fact that we are a small economy and our local banks have relative small volumes. Thus, it will not be economically viable for these correspondent banks to carry out the rigorous AML and compliance procedures that they must adhere to.” 

“It does not suffice to have legislation in place if the same legislation is not rigorously implemented. It does not suffice to strengthen the FIAU if its reports regarding suspect activities of high level government officials are ignored by the Police. It does not suffice to grow the MFSA if as a regulator it is not truly independent and its actions remain politically drive. It is deplorable to say the least, that the Prime Minister downplays this reality and justifies a major bank losing its only correspondent bank, to being a victim of its own success,” the PN said.