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INSOLVENCY:LinoSpiteripromisestoreleaseCBMfunds.Mintoffdemandsshareswithout

compensation.

HenryMicallef,May5,1986

InthefirstweekofDecember1973,thebankwasoperatingnormally.OnThursday,December6,while

atworkIwasinformedthatlargerwithdrawalsthanusualweremadefromoneormoreofour

branches.AtaboutnoonIwassummonedtotheCentralBankandIaskedtheassistantmanager,Mr

AntoineTagliaferro,toaccompanyme

Wemet

Lino

Spiteri,

at

the

time

deputy

governor

of

the

Central

Bank.

The

meeting

was

cordial

and

he

askedmewhathadhappened,andwetoldhimthattherewereafewwithdrawals...Andwefounda

poicythatinsuchcircumstanceswefloodthebrancheswithcaseandwhoeverwantedtomakea

withdrawal..wouldhavetheirrequestsmetsothatclientsareservedandnoqueuesareformedoutside

brances...Wehadenoughliquiditytosatisfyabnormaldemand.MrSpiteriappearedsatisfiedandtoldus

thatifweneededhimhewouldhelpusbyreleasingfundsourbankhadwiththeCentralBank.

Hetoldustokeephiminformed.Therehadbeenrunsonthebankbefore,buttheserunshadnot

beendirectlyontheNationalBankbutonallbanks...Thenextday,December7,1973,weopenedfor

businessandtherewerelargerwithdrawalsthanusual...Fromourexperienceofpreviousruns,this

always

happened

and

a

few

days

later

the

sums

withdrawn

would

be

deposited

again.

Thatdaytheprimeminister,MrMintoff,sentforus..thismeetingtoowascordial.Heaskedwhathad

happenedandwhatwerewegoingtodoaboutit.WetoldhimthesamethingswehadtoldLinoSpiteri,

andhetoldustomeethimagainonMonday,December10,1973,thatiswewouldseewhathappened

onMonday.Wetoldhimthathehadbetterletusdealwiththesituationourselves,becausetheless

fussthebetter.

AfterhereturnedtothebankthechairmancalledaboardmeetingforMonday,December19,1973in

theafternoon.Untilthen,althoughthereweremanyrymours,wedidnotfindoutwhatexactlywas

causingtherun,andweweremoreanxioustosolvethisproblemthantoidentifythereasonsforthe

run.

OnMondaymonringwewerehavingmuchheavierwithdrawalsthanintheprevioustwodays.The

primeministeragainsentforus,andwemethimintheafternoon.Thosepresentincludedmyself,the

chairmanandotherdirectors,amongthemPhilipAttardMontaltoandMajorAustinCassarTorregiani.I

amundertheimrpessionthatBaronPatrickSciclunamighthavebeentheretoo.

Facingusacrossthetablewastheofficialside.BesidestheprimeministertherewereFinanceMiister

JoeAbela,MrEarland(governoroftheCentralBank),LinoSpiteri,HenryDegabriele,andDrEdgarMizzi

(whoIamsurecameinatsomepoint).

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Itwasastormymeeting,withtheprimeministershoutingatthetopofhisvoice.Iwhohadknownhim

formanyyearshadneverseenhiminsuchastate,althoughIknewhimwellandhadeventravelled

abroadwithhim...Theprimeministerwasadamantandinsistedthatwehandoveroursharestohim,

otherwisehethreatenedhewouldclosedownthebankbydeclaringabankholidayundertheBanking

Act.

Theexactwordstheprimeministerusedwere:Giveittome,giveittome,asthisisthepeoples

money.Hemeantofcoursethatwehadtogivehimthebank...MrEarlandsaiditwasinconceivableto

closedowntheNationalBankofMalta.Mintoffturnedonhimandtoldhim:Isthisthekindofadvice

youaregiving?FromthatmomentonEarlandtooknofurtherpartinthediscussion.AfterwardsMr

Degabrielesaid:we,thatistheCentralBank,arethebankoflastresort.Thisappearedtomeanthat

theCentralBankwouldadvanceusthecash.Mintoffstoppedhimatonceandnobodyelsetookpartin

thediscussion.

PhilipAttardMontaltotoldMintoffthtthegovernmenthadarighttonationaliseandthereforehe

coulddothis.Mintoffrefusedtoacceptthis,andstartedshoutingatthesametime.Isuggestedthatwe

borrowfundsfromlongstandingcorrespondentbanksofourssuchasMidlandBankandtheNational

WestminsterBank.Mintofftoldme:Iamfeduphearingthingsfromyou,soshutup,orwordstothat

effect.

AtonepoitnMintoffsaidthatthateveninghehadtogotoParliamenttomakeastatement.Hesaidhe

hadlegislationalreadydrawnupandgaveustwohourstogivehimthebanksshares...naturally

withoutcompensation.

AtthismomentheturnedonDrEdgardMizziandtoldhim:Getapieceofpaperanddraftthetransfer

ofsharesandbringitbacktome,signed,bythisevening.DrMizzididthisandgaveusthisdraft

transferofshareswithoutanycompensation..Atthismeetingtheprimeministertoldushehadmany

optionsopentohim:Hecouldremoveourlimitedliabiity,behindwhich,hesaid,wewerehiding:he

coulddeclareastateofemergencybecausehesaidaneconomiccrisiscouldbeastateofemergencyas

thebankwasinvolvedinanumberofindustriesandtourism,andhecoulddootherthings...

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