BOV Chief warns Maltese economy might follow global crisis

Charlot Zahra
In an extensive interview with sister paper Business Today, the first one since the Lehman brothers’ bankruptcy was announced some weeks ago, Bank of Valletta (BOV) Chief Executive Officer Tonio Depasquale said that the Maltese economy might be hit eventually by the fall-out from the global banking crisis.
He said that as a Maltese bank, the current international situation did not affect BOV directly. “We were affected marginally because the investments that we might have had were small compared to the portfolio that a bank such as BOV has.”
However, he warned of dire consequences if the financial crisis that is affecting the financial sector in the US, the UK, Europe and Asia spills over to those economies.
“As soon as the economies of those countries are involved in this crisis, as we expect them to be, then, as the saying goes, ‘Wall Street starts hitting Main Street’, the Maltese economy will start suffering too as a result,” Depasquale insisted.
For instance, the UK would be facing a recession by the end on the year. “Forty per cent of our market share in tourism comes from the UK. If the reduction in market share affects the Maltese economy, then the banking sector in Malta will be affected as well.
“In a globalised world, nobody is immune to what happens in other countries,” Depasquale told Business Today.
In addition, everybody had to reduce his economic forecasts for this year and next year’s, both in Europe as well as in the US. “Obviously this will have an effect on the economy as well as on the banking sector.
“Until now, the Maltese economy has been resilient enough to the international shocks. However, I do not believe that we will not be hit by the negative effects of the global economic fall-out,” Depasquale insisted.
Read the full interview in today’s edition of Business Today.

czahra@mediatoday.com.mt

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