The trial of three men accused of murdering Maltese investigative journalist Daphne Caruana Galizia began today in Valletta, with British intelligence reportedly providing key assistance. For those of us who have watched the City of London’s tentacles reach into every corner of the global financial system, this case is more than a tragedy. It is a ledger of the costs of opacity.
Caruana Galizia was blown apart by a car bomb in 2017, a brutal end to a career spent exposing corruption. Her reporting targeted the Panama Papers, which revealed how the Maltese elite, including politicians, used offshore structures to hide wealth. The trial has prompted renewed scrutiny of the financial conduits that link Malta to London. British intelligence's involvement suggests that the case may uncover flows of dirty money through UK shell companies, a market in which London excels.
From a fiscal perspective, this is a reminder that corruption is not a victimless crime. It distorts markets, erodes trust in institutions, and ultimately raises the cost of capital for everyone. The Maltese economy has been a recipient of EU funds, yet it has also become a hub for online gambling and financial services that often escape proper regulation. The murder trial is a stress test for Malta's rule of law, and the outcome will have implications for gilt yields and risk premiums in the eurozone periphery.
Market efficiency demands transparency. The Caruana Galizia case is a textbook example of what happens when transparency fails. The assassination was an attack on the accountability that markets require to function. Investors should be watching this trial closely. If the UK's intelligence assistance leads to the unraveling of a money-laundering network, we could see capital flight from Malta and a reassessment of London's role as a safe haven for suspect funds.
Central bank policy in the UK and EU has been accommodative, but loose money does not cleanse dirty books. The trial may force a reckoning with the fact that some of the liquidity sloshing around is tainted. Fiscal responsibility requires that we not only pursue the murderers but also the enablers, the accountants, the lawyers, and the bankers who turned a blind eye.
So let the trial proceed. Let the evidence be laid bare. The market will do its job: it will price in the risk. But this is a story about more than one journalist's death. It is about the bottom line of a system that still allows the corrupt to hide their wealth. And London, with its financial secrecy, has a lot of explaining to do.
