Wednesday, April 17, 2024

Just suppose


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JUST SUPPOSE that the Wild Coot was a decision-maker and in a decision-making position, and moreover I was a buddy of Trinidad’s. This is what I, the Wild Coot, would do; this is how I would address my friend.
“I have a serious problem. Right now I am at my wits’ end. Let us break bread.
“You will propose publicly again that you are willing to buy the rest of the shares of the Barbados National Bank. That proposal will not seem strange inasmuch as you have been proposing it all along.
“Our country is borrowing money to pay monthly and weekly salaries and that is no joke – we cannot go every month to the National Insurance Scheme or increase the interest on Treasury Bills. It would look bad and people are watching.
“If you offer to buy, we will sell the portfolio of shares in Barbados National Bank. You will get all of the shares and we will get a reprieve for a month or so, plus a nine per cent dividend and people will enjoy Christmas.”
If this offer were put to the Trinidadians, not surprisingly, they would be the first to leak the offer to buy to any reporter who would perceive it as a Trinidad initiative. But suppose it was not!
For if it were a Government initiative, the initiative would spark concern from the lesser shareholders who would be forced to sell at a lower price than quoted on the stock market. The beauty of this move would be that Government could not be blamed.
Surely, Wild Coot, that cannot be so. You are like the economists, finding another hand and a third hand.
The statement that the value of the shares still held by Government has increased because of Republic Bank’s intervention is neither here nor there. If politicians would leave the bank alone, Barbadians could grow the bank, just as they grow foreign banks. There is no magic.
I applaud Dr Don Marshall for espousing the idea that the Barbados National Bank represents more than an asset to be sold for the narrow interest of money. That sale and the unwise closure of the Development Bank were irredeemable mistakes.
Absorbing the Barbados Mortgage Finance Company into mainstream banking further reduces national options. How will it look now to international investors if we try to nationalize the bank?
To sell the balance of shares, remove the miniscule toehold we still have on the bank? Are we that stupid or are we? Are we so desperate or are we?
An old lady phoned me to complain: “You think it is right for somebody to suggest that banking is something only to do with the management of risks in a volatile market? We have a volatile market in Barbados or a depressed one?”                                                                                                                                       
The world breathed a sigh of relief last Tuesday night when Mr Obama retained the presidency of the United States. Bajans were ecstatic, and rightly so.
But we must not be too hasty in endorsing Mr Obama. That rum issue is a serious one for the Caribbean and will possibly bankrupt the industry. That foreign accounting information-giving is a serious requirement that the banks have to agree on. It will affect our international business.
It is questionable whether giving Government the information breaches bank secrecy, knowing that the Government is obliged to give the information to the United States.
One of the reasons for Mr Obama’s past difficulties is the catastrophic failure of the European market. It has not been available to American exporters – a subject hardly mentioned in the election as a reason for the slow growth in job creation.
• Harry Russell is a banker. Email

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