“Coot,” said a solicitous friend of mine, “the banks in Barbados are going to lock you up, you and that fellow, for playing Wikileaks in the newspapers. You are making the people nervous about the banking habits in Barbados and they are not pleased.
“Their silence is deafening. Do not misinterpret their silence. You are over 60 years.”
I thought. They have never offered me a job, except when Prime Minister Tom Adams asked me to set up the Barbados National Bank. I dusted the dust off my feet there back in 1980 and never looked back.
Since then, wherever I go, I try to inculcate in the banks a sense of fairness and responsibility to the community.
By nature, banks are funny animals. They buy money from you and sell you back the same money at a profit of sometimes ten per cent or more. My comments on banking techniques are general, as being specific courts a certain amount of disloyalty to the profession to which my being has been programmed for many years. But I cannot stand idly by and see unfairness proliferate and fester.
The only thing that banks understand is competition. As I have said time and again, “put a ram goat among them and the sheep will fall in line”.
Government has it in its power to deal directly with the howls of complaint being heard from all quarters. Our dear Prime Minister, now free of the by-election, can focus on the issue, if he has the interest of the people at heart, or he can be like Nero.
It is easy for the Government to set up a new bank even in these perilous times. It controls assets and liabilities, manpower, access to systems and technology, quarters and so on. It does not take a genius to set up or run a bank – even the Wild Coot has done it. However integrity and fair play should go with it.
Banks, insurance companies and investment houses have been the rogues of the present sorry state of affairs in the world since 2007. Now people everywhere are in rebellion against unfairness, especially the youth.
Our Government, Bees and Dees, cannot escape blame. We should not have closed the Barbados Development Bank, neither should we have sold the Barbados National Bank (how stupid, listening to the IMF!). Present Government has the responsibility of rectifying these errors. But now we go cap in hand offering guarantees to the foreign banks who give us short shrift.
Recently, the former governor of the Central Bank of Germany agreed with what I have been saying, that we should never have followed the big-up countries and lowered our interest rates. That local inflation, in addition to exogenous inflation, would set in was the fear – and so it has. This has been augmented by our own foolishness listening to the IMF and increasing taxes.
The IMF was happy to give its trillions of dollars to the European countries. Do you see the conditionalities attached to the money given to Jamaica? The IMF would like to see our Value Added Tax raised permanently to 20 per cent.
Why are we listening to them? Let them tell that to the Americans. Don’t you see that the lowering of interest rates is a trap out of which it is difficult to get?
A man who took out a 20-year-mortgage on $200 000 when the interest rate was 6.5 per cent will catch his backside to pay $300 per month more at nine per cent. Are the banks offering a fixed mortgage rate for 20 years at the low rate? Somebody, tell me!
The lowering of interest rate, as we are finding, will help destroy profit in businesses; which causes unemployment, the very thing that the Government is trying to avoid and of which the unions are afraid.
You see, the buyers, who are the lynchpin of the economy, are deprived of income. The economic gurus to the Government will probably refute this, but is not this a point of debate? ?
Harry Russell is a banker.
