MPs approve Edward Scicluna as new Central Bank governor

Former finance minister Edward Scicluna has been approved as the Central Bank’s governor by parliament’s public appointments committee.

Scicluna was grilled before the committee consisting of Labour MPs Joe Mizzi, Glenn Bedingfield and Clayton Bartolo, and PN MPs Kristy Debono, Karm Mifsud Bonnici and Karol Aquilina. The committee is chaired by Labour MP Anthony Agius Decelis.

Following his decision to stepdown from politics, Scicluna was appointed as Central Bank governor by the Prime Minister Robert Abela.

The former minister was questioned over his work as minister, as well as his competence for the governor role.

On the Steward hospitals concession, Scicluna was asked over reports that Malta would be paying €100 million, should the concession ever be rescinded.

He said that such claims were unfounded, insisting he has already replied to such allegations in court.

Scicluna said discussion are ongoing between government and Steward, with the two parties debating claims and counter claims over the deal.

“I don’t want to prejudicated the ongoing case. What I can say is that I look forward to a pacific solution,” he said.

Questioned on the issue of correspondent banks, Scicluna said that banks like Deutsche Bank who were offering services to Bank of Valletta (BOV), were themselves being pressured on money laundering, with the former minister stating that banks told him that return from Malta is too low for the risks involved.

“With methods like swift banking, the central bank, can help in reducing that problem,” he said.

He insisted the issue surrounding correspondent banking is one he plans to take seriously, pointing out that a number of banks have already expressed their interest in coming to the country.

Speaking on the possibility of a no-deal Brexit, Scicluna said such a situation poses both risks and advantages for the country.

“Malta is part of the EU, and so with having such an important member pulling out, will have negative effects on us,” he said.

On the other hand, he pointed out that Malta has held strong relations with the UK for a number of years, with such relations looking to prove fruitful in the future.

On the country’s economic forecast, Scicluna said that Malta’s good economic position before the COVID-19 pandemic, helped the country to sustain itself and emerge in good standing once the pandemic blows over.

“When you have debt at 43% it gives you a better chance, and that is why we have a good forecast,” he said.

On the issue of bank moratoriums announced by government during the early stages of the pandemic, he insisted that liquidity is crucial.

“One can argue that the more you give, the harder it will be to repay that sum, but that doesn’t me we shouldn’t help people,” he said. Scicluna also insisted that banks should be left to decide whether to issue loans or not.

The grilling concluded with Labour MPs questioning Scicluna over the situation he inherited from his predecessor.

“We grabbed the bull by its horn and decided to adopt a bilateral approach. If you are capable of convincing the banks, the credit agencies and businesses that you are serious, then you start to increase your credibility and the results will come,” he said.

Scicluna also expressed his disappointment at the former finance minister Tonio Fenech’s insistence in not meeting with credit agencies.

“How did he not go to IMF meetings in Washington? That shows a lack of credibility,” he said.

The motion into his appointment was passed with four votes in favor and three against. Opposition MP Karol Aquilina requested a ruling on the vote.

Scicluna becomes governor of the Central Bank on 1 January. He will be succeeding Mario Vella, who is being appointed to the new position of Special Commissioner for Economic, Financial and Trade Relations with the United Kingdom.