Maltese Opposition Votes Against Financial Services Bill

by Robert Lee, Tax-News.com, London

21 June 2002

It emerged on Tuesday that for the first time in the history of the Maltese financial services sector, the MLP Opposition has voted against a government bill designed to increase the sector's competitiveness in the international arena.

Speaking earlier this month, Malta Labour Party spokesman for economic affairs, Leo Brincat warned that such a scenario might occur as a result of 'government inflexibility'.

According to a report in the Malta Business Weekly, the Opposition's reasons for opposing the bill were objections to the length of tenure of the Governor of the Central Bank under the new legislation, and plans to bring the regulation of Malta's banking sector under the umbrella of the MFSC, rather than the Central Bank.

Speaking in early June, Mr Brincat warned that although the MLP is in agreement with the vast majority of the government's proposals for the further development of the financial services sector, it would be forced to vote against the bill if the authorities attempted to pass it without addressing the two aforementioned concerns.

Speaking prior to the 32:27 vote, Finance Minister, John Dalli responded to the MLP's objections.

With regard to the first point - the tenure of the Central Bank governor - Mr Dalli informed the House that this was a mistake, and that there are plans to amend this at the committee stage.

Addressing the Opposition party's second concern - that the regulator for the banking sector should be the MFSC rather than the Central Bank, the Finance Minister stated that this provision had in fact been brought in eight years ago, at which time both parties had voted in favour. It was only last December, according to the MBW report, that the legal notice putting this in practice was issued.

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