John Dalli Defends MFSC Chairman

by Robert Lee, Tax-News.com, London

08 March 2002

Maltese Finance Minister John Dalli on Tuesday explained and defended remarks made by Malta Financial Services Centre Chairman, Joseph Bannister, in a recent newspaper interview.

Speaking to the UK based International Financial Adviser magazine about the jurisdiction's hopes of becoming a regional hub, Professor Bannister commented that: 'All financial supervision is now under one roof with around 100 staff. I hope that as business expands to our target of 20 to 22% of GDP from 12% currently our staffing levels will grow to 150 people.'

However, he added that if moves to join the European Union were rejected by the Maltese people in a referendum, the financial services sector's projected business levels were unlikely to be achieved.

Speaking in Parliament this week, MP Leo Brincat asked the Finance Minister to produce evidence to support the MFSC Chairman's claims that the sector will be increasing its contribution to GDP to 20-22%. He also demanded to know what led Professor Bannister to conclude that failure to enter the EU would result in lower than expected business levels.

Mr Dalli responded that the figures mentioned by the MFSC in the interview are the target which the sector aspires to reach, and explained that due to current developments in the international community, offshore financial centres are likely to be obliged to introduce tighter regulation, which could lose them certain advantages over high tax countries.

In this eventuality, said the Finance Minister, the European Union, and ease of access for Maltese companies to European markets, will become increasingly important, and failure to join the EU could result in lower than expected business levels for the country's financial sector.

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