‘Fit regimes to environment’

There is a need to ensure that capital regimes in the Caribbean fit our environment, our risks and the instruments that we have to address those risks.This is the view of Dodridge Miller, president and chief executive officer of Sagicor Financial Corporation.He said some regulators currently put a level of capital burden on companies that in his view is not sustainable. “We’re seeing regulators wanting to suggest that the capital on products and the capital for assets backing those products need to go up considerably,” he said on Tuesday during a teleconference to discuss the group’s financial results for the six months ended June 30, 2010.“If we really want these companies in the Caribbean to be able to compete internationally, they need to be competitive. Overlaying on them capital burdens that do not exist anywhere else in the world will certainly condemn them to a position where they cannot compete beyond the narrow geography they are in,” he added.Meet with directorsMiller said it was Sagicor’s intention to meet directly with regulators “at some point” to discuss the issue.He noted that the situation is similar to what happened in the United States of America prior to the Sarbanes-Oxley Act and described it as a reaction that is not going to be in the best interest of the current competitive environment. Miller declined to say which jurisdictions he found particularly burdensome.“I can tell you, coming out of the financial crisis in Jamaica in the late 1990s, they have a capital regime which is a derivative of the Canadian capital regime. But if you hold 150 per cent capital in Jamaica under that capital standard, you literally hold 200 per cent or more in Canada. “Jamaica has placed an additional burden on the environment . . . ,” he charged.The CEO went on to say that if a Jamaican company and a Canadian company were competing for the same business,  the Jamaican company would not be in a position to win.Miller noted that Sagicor is committed to working with the regulators. (NB)