Issue link: https://maltatoday.uberflip.com/i/313770
maltatoday, SUNDAY, 18 MAY 2014 News 9 TIM ATTARD MONTALTO EMPLOYERS' representative David Curmi has denied sug- gestions that a statement by the Chamber of Commerce which he presides, over high bank interest rates for credit, stemmed in part from his interests with Bank of Valletta. Curmi is chief executive officer of MSV Life plc, an insurance firm jointly-owned by Middlesea Insur- ance and Bank of Valletta. Earlier this week, the Chamber claimed that the lower level of lending to businesses was not down to the popular complaint over high interest rates, but that the decline in commercial credit was due to a "reduced appetite" for invest- ment in certain affected sectors, such as manufacturing and import and distribution – companies that form part of the Chamber. Elsewhere, small business groups have echoed sentiments by the Central Bank governor Josef Bon- nici that Maltese banks have inter- est rates higher than their euro- zone counterparts and must make them more accessible to business- es. The irrefutable evidence was reflected in statements by Euro- pean Commission experts claim- ing that banks might be colluding on interest rates, and the fact that the Maltese competition authority (MCCAA) is conducting a secto- ral inquiry to establish the effect of interest rates and high banking charges on businesses. "Members of the Chamber would undoubtedly welcome lower rates of interest on their borrowings but not at the expense of any threat to the stability of the local banking sector," Curmi told MaltaToday. "We are well aware of the fact that the strength of our banking sector largely contributed to Malta surviv- ing the effects of the worst finan- cial crisis in the last one hundred years." Curmi has defended the Cham- ber's 'responsible' stance, saying only a conservative approach to lending can ensure the uninter- rupted flow of finance for business- es and SMEs. Maltese banks are currently un- der pressure to have adequate levels of cash and deposits, and to ensure that they loan out money to businesses that actually succeed: the forthcoming European bank- ing regulator will want Maltese banks to see that loans they extend to industries such as construction, actually reflect the value of the col- lateral. But Curmi categorically denied that his role as a Middlesea execu- tive had any bearing on the Cham- ber's stance. "Whenever I make a statement or express views on be- half of the Chamber I am always conveying the views of the Cham- ber and never my own. The issue of bank lending rates has been dis- cussed at the board of management and council of the Chamber and I have also dealt with this matter in my address to members at the AGM of the Chamber." Curmi in fact insists that the public debate on bank interest rates – now supported by Labour MP Silvio Schembri, who chairs the parliamentary economic and financial affairs committee – was characterised by "an element of misinformation and reliance on simplistic arguments, leading to in- correct and dangerous conclusions. One of these being that lending rates in Malta are high." "The truth is that there is no standard interest rate which is ap- plicable to all businesses on their borrowing. The better capitalised and the more financially-sound companies are, the better they are able to negotiate lower rates." Curmi is also adamant that Mal- tese banks stick to their conserva- tive and prudent lending, while a high liquidity, base. In fact, he warns that when the banks will be regulated by a single European banking authority, they will also come under the regulation of a 'one-size-fits-all' policy. Un- der pressure from EU regulations means banks risk becoming more restrictive on commercial lending. "It could limit access to finance for the business community rather than making access to finance easi- er. This would result in the unavail- ability of much needed financing for businesses," Curmi said. "No-one stands to gain from such a scenario, including the investor, the bank and society at large par- ticularly as the country would lose out to potentially viable and profit- able projects. It would also lead to a further loss of investment which would, in turn, affect future em- ployment and growth prospects in the country." Curmi said the Chamber was sup- porting a traditional, conservative approach to risk, saying this was beneficial also to SMEs. "If banks over-expose themselves to risk, there is every possibility that they could suffer very undesirable con- sequences. If that happens, SMEs and the business community would face severe access to finance restric- tions, which would pose a much larger difficulty to the continuation of their business than the interest rates currently pose." tattardmontalto@mediatoday.com.mt NOTICE TO VOLUNTEERS The Environment Protection Directorate together with Kai Marine who are responsible for the scientific surveys of this EU LIFE+ MIGRATE Project (LIFE 11 NAT/MT/1070) are resuming studies initiated last year on the status of the population of the loggerhead turtle (il-fekruna tal-baħar) and the bottlenose dolphin (id-denfil ta' geddumu qasir) in Maltese waters. Anyone interested in volunteering and helping in the project's data collection is welcome to send their contact details by email: life.migrate@mepa.org.mt or by phone: 2290 7108 or 2290 7316 during office hours. Interested Interested volunteers will receive free training on how to identify the different species when out at sea, a quarterly newsletter with updates on the project and a certificate for the support offered. 'Not on bank's brief, but business loans must stay conservative' Chamber of Commerce president David Curmi says his organisation's position cautioning critics against touching banks' high commercial interest rates on loans, is unrelated to his position at MSV Life, the Bank of Valletta-owned insurer David Curmi has defended the Chamber's 'responsible' stance