Former BOV chairman Roderick Chalmers is MFSA consultant

Former Bank of Valletta chairman Roderick Chalmers has been appointed as a consultant to the Malta Financial Services Authority on the introduction of the Single Supervisory Mechanism.

The European Central Bank is preparing to take on new banking supervision tasks as part of the SSM, which will create a new system of financial supervision, made up of the ECB and the EU’s financial regulators. The main aims of the SSM will be to ensure the safety and soundness of the European banking system and to increase financial integration and stability in Europe.

Chalmers’ repositioning inside the MFSA reflects the 65-year-old chartered accountant’s extensive experience in finance and banking, despite having been berated by Prime Minister Joseph Muscat for his stewardship of Bank of Valletta during the La Valette property fund fiasco.

Chalmers had vehemently defended the bank’s practices when the MFSA fined the bank and its investment management arm, Valletta Fund Management, a cumulative €550,000 for investment breaches on the sale of the La Valette fund to retail clients.

Over €50 million was lost in the fund when its underlying property funds were found to have been too heavily indebted when property prices crashed, wiping out Maltese investors’ capital.

The MFSA ordered compensation of up to €1 per unit invested, but many investors are still fighting BOV in court to get back all their savings and any interest.

The La Valette property fund fiasco was a cause celebre for Labour when it was in Opposition, with Joseph Muscat demanding that responsibility be shouldered by Chalmers, the government-appointed chairman of the bank.

“The government appointed the chairman and saying he is a good man is not enough. Somebody has to assume responsibility. If nobody does, it would be the politicians who made the appointments who would be held accountable,” Muscat had said.

The finance ministry has told MaltaToday that Chalmers is not involved in the asset quality review of either HSBC or BOV.

Large banks must have all their assets and collateral valuated, so that their liquidity levels can be tested: the comprehensive assessment will mean analysing banks’ loan portfolios and to see whether these match the collateral on which the loans have been taken out.

The AQR of HSBC Bank Malta is being carried out by PricewaterhouseCoopers, and that of Bank of Valletta is being carried out by KPMG. The consultants on the AQR at the MFSA are Deloitte.