MINISTER OF FINANCE and Economic Affairs Chris Sinckler says credit unions were not instructed by the Financial Services Commission (FSC) to pull their investments from non-bank financial institutions. However, Sinckler says credit unions were told to follow the law regarding where they invested members’ funds.
Addressing members of the Barbados Chamber of Commerce and Industry last Wednesday at Hilton Barbados, Sinckler said the law provided that credit unions should invest their money in commercial banks.
However, he said the Financial Services Commission and the Supervisor of Cooperatives had given credit unions some flexibility in where they placed their funds.
According to a letter addressed to credit unions on March 14, the regulator pointed out also that according to the law, credit union investments “shall not exceed in aggregate ten per cent of the statutory reserve of any credit union”.
Sinckler pointed out that when investments went beyond this threshold, “the Financial Services Commission, as the regulatory body, has responsibility under the law to ensure that it gets back down below that”.
He said the legislation had not kept pace with the changes in the financial system and it would have to be revisited.
“There is no conspiracy [by] the Government, contrary to popular belief, to force credit unions to take their money out of other institutions and put them in commercial banks so the banks would buy treasury bills,” Sinckler asserted.
He said the FSC was a reputable body which was “prescribed and asked for many years ago”.
“We now have it in place. It is going to be very robust in protecting the interests of all Barbadians and the deposits which we make in various non-bank financial institutions and I think that is something to be lauded,” he said.
Recently, Steve Belle, head of the island’s second largest credit union, City of Bridgetown Co-operative Credit Union, said the FSC wanted credit unions to remove millions of dollars deposited in certain non-bank financial institutions and shift them to banks, as the law insisted. (NB)
