Pilatus chairman and the MFSA: what could happen next

The news of the Pilatus bank chairman's arrest has led to calls for the revocation of the bank's licence by the Nationalist Party and activists. However, such a process can be somewhat complicated. Who can take action? Pilatus Bank is supervised by the Malta Financial Services Authority, and was given its licence before the European Central Bank's Single Supervisory Mechanism was introduced in 2015. The ECB has no supervisory role over its day-to-day operations. The MFSA can take action if there are breaches to the Banking Act or money-laundering rules. So far, Pilatus Bank has no connection at all with the sanctions-busting allegations which resulted in its chairman’s arrest. Sources involved in combating economic crime told Times of Malta that in situations like this, the authorities "can’t simply shut down a bank". READ: Pilatus Bank chairman forced out by MFSA They said investigation into the Ta’ Xbiex institution had been ongoing for “quite some time” systems in place had to be followed by the authorities. The FIAU was already aware that Ali Sadr was being investigated by an overseas jurisdiction, and its report was passed on to the police in July 2016. The licence could be...