“For all sad words of tongue or pen/ The saddest are these ‘It might have been’ ” – John Greenleaf Whitlier
AS EVERYONE who has been living in Barbados since Independence would know, Barbados had the opportunity to enjoy a formidable bank in 1979. I am sure that our Democratic Labour Party supporter writing in the Monday, June 6 DAILY NATION knows – unless he has forgotten. The opportunity was lost and many other countries and institutions benefited.
How can you be calling now for a bank “to replace BNB (Barbados National Bank) to guide Barbados out of its financial challenges”? This is not the area that needs guidance. Have you not heard of the serious issues of late facing indigenous banks? Even our governor of the Central Bank has publicly expressed concern both here and abroad. Don’t you realise the issues now confronted by the indigenous banks in the Caribbean today? Any financial consultant should be aware of the “stranna” on which indigenous banks are tethering.
Are you calling for a new bank, or are we going to buy an existing bank? Is any bank willing to sell now that it has the ability to pay 0.25 per cent for savings, can buy lucrative Government paper with cheap money, and is replete with savings? Are any existing banks complaining about reduced profits to that extent that they are willing to leave? Banks are dealing with issues beyond if they want to sell or leave. There are issues about capitalisation (de-risking, some banks are struggling to find the new capital requirement); there are issues about inadequate due diligence and demand for more due diligence; there are public issues about when the Central Bank will wake up and do something about the iniquitous charges that propel profit in commercial banks. There are issues about FATCA (Foreign Account Tax Compliance Act) and the extraordinary fines that one mistake can trigger. This will affect doing business in Barbados. Even the Canadian banks are treading carefully when customers who normally bank with an indigenous bank wish to change horses.
The call at this time for a replacement of BNB is an empty exclamation that Shakespeare referred to as “a tale signifying nothing”. It is consistent with the puerile litany of inanity that is politically spouted in recent days. Barbadians have found themselves in a plethora of issues, both political and social, that have never been seen before. We are getting no problem-solving answers from our leaders, simply rhetoric of which this banking recommendation is an example.
The most that we can do is to try to save what little we have now as pressure mounts on indigenous banks of which Barbados has three.
I have spoken about money coming into the country surreptitiously from other Caribbean sources where the issue of foreign citizenship may provoke questionable intentions. The contamination of this expensive money in Barbados is the worry of correspondent banks. Do you want us to take our seat at a banquet table of banks with this Damocles sword hanging over us dangling by a thread?
This report exemplifies the kind of sophistry that has characterised the mouthing of some politicians. It tends to mask the real position of the country.
The best that I can do is to say that the reported speaker is right about having a catalyst in the financial system, about the retention of profits and foreign exchange, about the preferential use of the National Insurance funds, but the horse has already left the stable.
Actually the Wild Coot woke up the late Prime Minister, David Thompson, one morning indicating to him that Butterfield Bank was up for grabs, but . . . .
This is a different moment in time and it is better that we sit out this over of “googlies” until we see how the ball is playing. Even if we had the capital to set up a bank and we persuaded Barbadians and Government to support it (National Insurance and debit and credit balances), we still need the bank to relate to the outside world. When we initially set up BNB, we travelled far and wide to get foreign correspondents. We even got a bank to send a senior officer to help us set up our foreign exchange department. I am afraid that little use is made now of the expertise transferred, much to the disappointment of small entrepreneurs and export business possibilities.
• Harry Russell is a banker. Email: quijote70@gmail.com