Andrew Manduca, President of the Association of Financial Services Practitioners, Malta, gives his perspective on the island's prospects
How important is the financial sector to the economic well-being of Malta?
I do not have the latest figures but my sense is that it is a sector that is growing steadily. On the other hand, one can safely say that it is not yet a pillar of the Maltese economy, although it is the Government's intention that it will be one in the medium to long-term.
What are the advantages of Malta as an offshore financial centre?
Malta, as an independent state, has a rapidly expanding double tax treaty network. In September 1994, a whole host of financial services legislation was enacted based on EU standards of regulation in areas of banking, investment services, insider dealing, money laundering, company law, and so on. In other words the regulatory framework that we have is one that international investors would be familiar with. Another advantage is that English is one of the official languages in Malta with all laws being also published in this language.
What steps are being taken in Malta to ensure the balanced growth of a broad spectrum of financial services?
Both the Government and the MFSC (the local regulators) are following a policy of ensuring growth in all areas of financial services. Currently missing from our statute books is an up-to-date Insurance Business and Insurance Broking Act but this should be rectified in the coming months.
How well-poised is Malta to take advantage of increasing globalisation as an offshore financial centre?
Our communications system is state of the art. Malta's time zone is the same as that of Continental Western Europe, while the local university is churning out high calibre graduates in all of the main areas of relevance to financial services.
How does the regulatory climate differ from other leading offshore financial centres?
Let me first of all clarify that it is not technically correct to call Malta an 'offshore' financial centre. It is a financial centre whose regulatory framework, based as stated above on EU standards of regulation, is the same for 'offshore' and 'onshore' business. The regulations are the same for everyone.
What policies should the banking and finance sector in Malta follow for a prosperous future?
We should continue to strictly follow a prudent and serious policy of vetting clients to ensure that Malta's reputation as a financial centre of repute remains untarnished.
What would you say is the biggest obstacle to the future success of Malta as an international financial centre?
To be frank, I cannot think of a particular obstacle. All the ingredients for continued success are there. Both of the two major political parties in Malta unreservedly support the continued development of the island as a financial centre of repute. I cannot see a waning in the international demand for serious financial centres and therefore the future looks good.
Generally from your experience, do you think the image of offshore financial centres has improved?
I feel that the days of lax offshore financial centres are numbered. For this reason there is no doubt, in my mind at least, that financial centres everywhere are tightening up their regulatory framework and introducing laws to prevent money laundering. However, I believe the correct answer is that the image of some has deteriorated while those of other has improved.