The Malta Independent 23 January 2020, Thursday

BOV and US dollars

Sunday, 30 June 2019, 09:32 Last update: about 8 months ago

Joe Genovese


Some two years ago, a listener to a PBS phone-in programme in which an ex-MFSA top official was guest, complained about having made an overseas payment in US Dollars and, weeks later, was still in the dark as to what happened to that payment.

He said that his bank in Malta, through which the payment was made,  was unable to be of help.

Some two months later, the same listener phoned in to the same programme when, again, the same ex-MFSA official was a guest, complaining that he still had no idea of what had happened to the payment and that the bank was still unable to help, in the sense that the bank also still had no information.

We now know that the bank was BOV.

A few months after this telephone call, an official Maltese delegation – consisting  of the PM and the Finance Minister, among others – flew to New York to engage in talks with top American banks.

On their return to Malta, the PM, and his perennial fall-guy the Finance Minister, made a grandstand play that agreement had been reached with these top US banks and the previous hiccups were due to a misunderstanding.

The gall of it all.

We now know that, in international financial circles that really matter, BOV has come to be viewed as a pariah to be avoided like the plague.

It seems that the US Federal Reserve has intervened, placing on notice all BOV’s (erstwhile) correspondent banks that it will not honour their US Dollar deposits that originated from Malta’s BOV.

When the US Federal Reserve serves notices such as this, they carry with them serious repercussions should they be ignored by the receiving financial institutions. So one can safely assume that BOV’s  correspondent banks were not let off the hook either, and that’s why they chose the course they did.

This is the most damning indictment ever against the Maltese Government. Not

against Malta, but against the Maltese Government.

Why? Because all other banks in Malta, both large and small, can continue trading their US Dollars unhindered by any sanctions of the US Federal Reserve.

What makes these other banks stand out from BOV? None of them has the Maltese Government as a shareholder. The BOV not only has the Government as a shareholder, it has the Government as the single largest shareholder, with a 25 per cent holding.

Furthermore, BOV’s chairman is appointed subject to the PM’s approval, if not behest.

So here we have a bank whose single largest shareholder is the Government, supposedly the paragon of financial rectitude, being singled out as Malta’s only bank to end up on the US Federal Reserve’s black list.

That is why this is the most damning indictment against not Malta, but against the Maltese Government.

Which, in itself, is no news and, well, one need make no federal case out of it.


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