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Prime Minister Confident In BOV’s Fallback Plan As Bank Loses Its Last US Dollar Correspondent Bank

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Prime Minister Joseph Muscat has played down concerns at Bank of Valletta’s situation after it lost its last correspondent bank, Dutch bank ING, for US dollar transactions.

“I have been informed that BOV is going ahead with fallback plans it had prepared in this regard,” Muscat told the press today. “I have also been informed that the situation isn’t due to the internal situation of Bank of Valletta, but due to the internal situation of the correspondent bank.”

ING has been a centre of money-laundering issues within the EU and was fined €775 million in September 2018 after admitting that criminals had been able to use their accounts.

A de-risking exercise followed, with ING looking to offload its banking relationships with smaller jurisdictions that are viewed as high-risk.

“The revolutions and changes which are taking place in the European banking sector are due to banks which are failing, banks which are issuing many non-performing loans and banks which aren’t up to scratch and which are falling to bits,” Muscat said.

“The situation at Bank of Valletta is the complete opposite. It has grown exponentially with the growth of the Maltese economy and regulators are now warning that it is too big for the size of our economy. Ironically, the issue isn’t that it’s doing badly but that it’s doing too well. We need to hone this new skill on how to deal with this type of de-risking, and I’m sure Bank of Valletta will present a strategic plan in this regard in the coming weeks.”

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