FinancialGuy Writes!

More Banking Trouble In Malta

Malta’s banking sector has been under pressure for the last two years for regulatory issues, but in recent weeks, the problems have heightened for the troubled industry. This is having knock-on effects, as discussed in my recent post about problems that the blockchain sector has been having.

Firstly, there is the well known and ongoing saga of Pilatus Bank and all that goes with it.

Then in October 2018 the Malta Financial Services Authority closed Satabank plc. As I understand it, the process to release depositors funds is still ongoing. Since then, it has emerged that millions of euros of transactions have been found to be suspicious and linked to a large diesel smuggling ring.

You just know that isn’t the end of it, don’t you…

This week it emerged that Bank of Valletta had been hacked and that 13M EUR in transactions were being reversed to stop the money from disappearing. That forced BoV to cease operations and then APS Bank to have to suspend their own operations for a few hours too.

As a part of a connected European banking system, this really cannot be good enough. As a jurisdiction that hails financial services as one of it’s “strengths” it really doesn’t feel that way at the moment. As we saw through 2009-2013, via the financial crisis and the eurozone crisis, everything is connected. While Malta and it’s banks are tiny cogs in a very large system, it is unhelpful for them to be under these ongoing clouds.

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