Sociologist from Malta

Monday, November 12, 2018

SATA Bank: Letter to European Commission and European Banking Authority

Mr Valdis Dombrovskis Vice President responsible for Financial Stability, Financial Services and Capital Markets Union, European Commission
Ms Vera Jourova Commissioner for Justice, Gender Equality and Customers, European Commission  

Mr Andrea Enria, Chairman, European Banking Authority  

Mr Adam Farkas, Executive Director, European Banking Authority

Subject:  Frozen bank accounts at Satabank Malta

Sliema, 10 November 2018

Dear Commissioners, dear Chairman and Executive Director,

On 20 October the Malta Financial Service Authority (MFSA) by administrative measure effectively froze all accounts at Satabank, a small international bank operating in Malta.[1] The MFSA appointed Ernst and Young (EY) to administer the bank’s assets, and later allowed a controlled release of customer deposits. This has left businesses and workers in Malta unable to access funds, without any prior notice. The MFSA also announced that any balances of electronic money held are not deemed to be eligible deposits covered by the Depositor Compensation Scheme, effectively leaving Satabank customers without any protection.

Many Maltese retail customers had turned to Satabank due to difficulties with setting up bank accounts with the major Maltese banks, including partly public-owned Bank of Valletta (BOV), which still require a high bureaucratic burden to open bank accounts for non-Maltese citizens, in breach of EU law principles of free movement of persons and capitals.

Three weeks have now passed since the freezing of current accounts in Satabank, without any communication to its customers. No timeline has been released by Satabank or MFSA about the steps ahead. Alarm has been raised among others by the Chamber of SMEs (GRTU), which noted that many customers still faced grave financial and cashflow difficulties, particularly in the areas of Msida, Gzira, Sliema and St. Julian’s. Customers are left to fend off for themselves, and many have had to rely on support of families or friends in order to access cash even for their basic living expenses. Small businesses are being hampered from operating, unable to pay ages or rents, and may not be able to submit VAT documents on time. Satabank customers remain unable to open accounts in other major Maltese banks.

In this regard, allow me to ask you:

- what are the Commission and the European Banking Authority doing to ensure that all Satabank customers may regain access to their bank accounts in the shortest possible time, at least for a minimum withdrawal amount in order to cater for their living needs?

- what are the Commission and the European Banking Authority doing to ensure that Maltese banks do not unjustifiably discriminate against non-Maltese EU citizens by requiring them additional administrative burden and taking unreasonably long time to be able to open a bank account?  

- what are the Commission and the European Banking Authority doing to protect the employment rights of Satabank workers?

Kindest regards,

Dr Michael Briguglio


Jon Camilleri said...

In God we trust, and interests we freeze ...

Anonymous said...

I afraid it was EU who forced MFSA to take such drastic measures.
EU gives 0 fks about human rights lately. Only in propaganda news.
And of course, there is no response from EU.

Anonymous said...

very good letter, I'm affraid first of all EU doesn't care about its citizen, they do their financial experiments firstly on islands (remind Cyprus case) that's Sata bank story... nobody cares what we as a custemrs can do...