Fabian Demicoli

Governor of Central Bank backs GRTU’s claims:


Maltese enterprises should be given lower interest rates – GRTU was very
pleased to hear the undeniable confirmation from the Governor of the Central
Bank himself who insisted that lending rates practiced in Malta are the fourth
highest in the euro area. Maltese SMEs are facing lending rates that are far
higher than those faced by their counterparts not just in Luxembourg but also
in distressed countries Spain and Italy

SME
lending rates in Malta are not in synch with the MRO. The rates in Malta are
higher than the euro area average even if the latter is biased upwards due to
stressed countries. The spread between SME lending rates in Malta and MRO rates
was at 2.3% before 2009 and widened to 4.9% by the end of last year.

The
Governor further backed GRTU's claims that what we need is a Development bank.
GRTU has been insisting with the Government and at MCESD that setting up a
Development Bank is a priority.

GRTU
President Paul Abela reiterated GRTU's long standing argument that both bank
interest rates and bank charges are excessive,       especially on the smaller enterprises that
have less negotiating muscle.

Banks
are still increasing their charges with a relatively recent development as an
example by HSBC where it had introduced charges on internet baking to the
private sector. The Bank had saved money when it closed some branches and
pushed businesses to go online to affect their banking needs.

Governor
Bonnici stated that bank charges in Malta are higher than in many other places
and that one would have thought that with the changeover to internet banking,
charges would be lower, but that has not been the case.

In
Luxembourg banks reduced costs of internet banking to encourage people to
switch over to internet banking. Not in Malta. In Malta banks charge you even
to transfer your money between your own accounts because more than one bank is
involved.

The EU
is also looking closely into bank charges and the European Commission has
already issued Communications that should result in curbing abuses in this
regard.

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