Letters | Sunday, 01 February 2009

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Mintoff’s genius confirmed

In reply to my letter published in Malta Today (‘The genius of Dom Mintoff and the National Bank saga’, 11 January), Corinne Vella expressed her concern that “for the sake of school children everywhere, I hope that this man is not a teacher.” (‘Genius of Mintoff? Hardly’, 18 January)
I would like to put Ms Vella’s mind at rest that I am not a schoolteacher. I have, however, great respect for the teaching profession and for their dedication and patience in the execution of their duties. In my younger days, my teachers taught me to substantiate my arguments with facts and not just idle talk or speculation, and would thus appreciate some more space in your popular newspaper to implement my obligation.
Her claim that government intervention in the current crisis is aimed at shoring up the banks is a deviation from the whole truth. In a number of instances government intervention had become necessary to de facto nationalise the ailing financial institution. One of the examples I mentioned was Northern Rock UK: an ex-building society formed in 1965, demutualised in the 1990s, floated on the London Stock Exchange, promoted to the FTS100 index, then demoted to the FTSE 250 in Dec 2008 and later suspended from the LSE due to the bank’s nationalisation.
During the financial crisis (2007-2008) the bank sought and received a liquidity support facility from the Bank of England, but to no avail because on 22 February 2008, the bank was taken in state ownership. If any of MaltaToday’s readers are interested in this subject, there is a multitude of information sources in the internet, and there are also numerous other examples of financial institutions which necessitated government intervention, too many to mention here.
Those which obtained such government intervention, becoming partly or fully owned by the government, survived, and those which did not are now a thing of the past. If Corinne Vella cannot see any parallels in these with the situation of the National Bank, then this is her problem.
Her accusation that Mintoff’s intervention in the case of the National Bank was intended to bring it down is also far from the truth because many of the Bank of Valletta employees and depositors owe their livelihood and safeguarding of their savings to the illustrious Dom. I am glad that Corinne Vella was not our Prime Minister at that time because we would have ended up without a National Bank, Bank of Valletta and the Central Bank. Being lenders of last resort, Central Banks cannot be used just to shore up the banks, as Corinne Vella claims, because when the financial situation turns sour, it is not just an individual’s money or the so-called autonomous institution which is involved. Dom Mintoff acted responsibly in this respect of not allowing the Central Bank’s money to be gambled with.
Concerning my advice to the shareholders (ex-shareholders of National Bank), it should be noted that I am not holding a gun to their heads to take my advice, and neither did Mintoff when most of them surrendered their shares.
In conclusion, for the sake of honesty and truthfulness, I sincerely hope that this woman is not a historian because schoolchildren everywhere will get a very distorted view of history from her.

Raymond Sammut
Mellieha

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