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Banks fail, causing ripple effects but what of the Turks & Caicos banking security
By Dana Malcolm with Deandrea Hamilton
Staff Writer
#TurksandCaicos, March 23, 2023 – The reputation of banking is taking a fierce hit now as some experts forecast a snowball effect for the sector with the recent collapse of three banking institutions; but the Turks and Caicos is not worried, at least not yet.
While Magnetic Media obtained confirmation that the TCI Financial Services Commission has held a debriefing with the industry, there is confidence the fallout will not befall banks in these islands.
“I don’t think there’s going to be any effect on the Turks and Caicos but certainly it would be remiss of us if we don’t monitor it,” said E. Jay Saunders, Deputy Premier and TCI Minister of Finance, Investment and Trade.
In fact, he explained that the FSC which oversees the sector had already given a brief update, maintaining that the effect on the country was negligible and he believed they would continue to monitor it.
In case you’d missed it, the global banking sector took a major hit last week with the collapse of three regional American banks and a mad scramble to save others costing about $318 billion, according to media reports. Now the US Treasury is taking out more even money to insure smaller banks, a strategy in order to undergird the banking system.
One Jamaican Investment banker explained the possible ripple effects of the collapse.
“I can’t say that it would be good for us but what would affect us is if there are any local banks that are holding bonds or securities from these institutions,” he said. “But the banks that have been collapsing overseas are not your global
banks,” he added.
The financer explained that these were regional banks which operated in small areas.
Still when you are speaking of billions of dollars, many lean toward the collapse being quite sizable as it crossed borders with Canadians also frightened that they’d lost it all in SVB’s failure.
Silvergate Corp went first, gutted by the upheaval of Crypto. Silicon Valley Bank (SVB) fell next (making the most noise because of its proximity to the tech Eden Silicon Valley) as clients drew out their funds in a panic, leaving the bank high and dry. New York Based Signature Bank followed.
Finance Minister, E Jay Saunders aimed to allay fears; reassuring the Turks and Caicos that its local banking ventures would likely be buffered from the effects.
“Our banks are not investment banks, they are commercial banks, and we have Canadian banks – they are very very conservative so I don’t expect – Scotiabank, RBC or CIBC FirstCaribbean – for this to be affecting them in any way.”
SVB is not an international bank and most of the people who banked there were super high net worth businesses or venture start ups. Most of the banks here would not be looking to invest in companies like those. Where we [in the Caribbean] would have an issue is if [for example] a- JP Morgan or Citibank- got pulled in,” the Jamaican explained.
US-based First Republic was saved by loans and Swiss bank Credit Suisse, bought out by a competitor UBS and thus saved by the skin of its teeth after multibillion dollar losses caused its borrowing power to dry up. The Federal Reserve, the Bank of Japan, Bank of Canada, Swiss National Bank, and the European Central Bank, had to step in, doling out loans and making currency easily available to staunch the bleed.
Our Latin American neighbours say the whole debacle could push growth down to zero if it spreads to the region. This from Inter-American Development Bank Chief Economist, Eric Parrado in a March 19 annual meeting, reports Reuters.
In any eventuality, analysts say the uncertainty could slow down lending globally, making it tougher to get loans for banks and in turn residents; for the TCI that could be dismal as borrowing for natives is already sized up as a game of mastery and curry favouring.
Nelson Mandela showed us the extraordinary difference one person can make in building a better world.
And as the theme of this year’s Nelson Mandela International Day reminds us – combatting poverty and inequality is in our hands.
Our world is unequal and divided.
Hunger and poverty are rife.
The richest one per cent are responsible for the same quantity of planet-wrecking greenhouse gases as two-thirds of humanity.
These are not natural facts. They are the result of humanity’s choices. And we can decide to do things differently.
We can choose to eradicate poverty.
We can choose to end inequality.
We can choose to transform the international economic and financial system in the name of equity.
We can choose to fight racism, respect human rights, combat climate change, and create a world that works for all humanity.
Every one of us can contribute – through actions large and small.
I join the Nelson Mandela Foundation in urging everyone to perform 67 minutes of public service on Nelson Mandela International Day – one minute for each year he fought for justice.
Together, let’s honour Madiba’s legacy and turn our hands towards building a better world for all.
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AfriCaribbean Trade and Investment Forum (ACTIF2024) set to strengthen Africa-CARICOM linkages
Speakers at ACTIF will include global superstars Viola Davis, Serena Williams, Didier Drogba and African and CARICOM Heads of States
Nassau, Bridgetown, Georgetown, May 28, 2024 – Excitement mounts as The Bahamas prepares to host the Afreximbank Annual Meetings (AAM) and the AfriCaribbean Trade and Investment Forum (ACTIF) from 12 – 14 June 2024 in The Bahamas. Themed “Owning Our Destiny: Economic Prosperity on the Platform of Global Africa,” ACTIF2024 is set to forge significant pathways for economic prosperity between Africa and the Caribbean.
Other distinguished speakers will include Heads of State from seven CARICOM countries, former Prime Ministers, Ministers of Trade,
Economic Development and Finance, Dr. Roger W Ferguson, Former Vice Chair of the Federal Reserve, USA, Prof. Andreas Klasen, Professor of International Business and Director of the Institute for Trade and Innovation at Offenburg, and many more.
Professor Benedict Oramah, President and Chairman of the Board of Directors, Afreximbank, said: “We are witnessing shifts in the global economic landscape and the trade strategies of major economies, making it imperative for African and Caribbean nations to unite for mutual prosperity. The Afreximbank Annual Meetings and AfriCaribbean Trade and Investment Forum in The Bahamas will serve as a strategic platform to enhance our economic bonds. These events indicate a vibrant assertion of our shared destiny. We are poised to harness the dynamic economic growth within our regions, enhancing our collective resilience and prosperity.”
The event promises to be a pivotal platform for high-level discussions on economic development and regional integration.
Building on the successes of the inaugural AfriCaribbean Trade and Investment Forum held in Barbados in 2022 and the gathering last year in Guyana, this year’s Forum in The Bahamas will further elevate and expand upon the discussions and initiatives previously set in motion. ACTIF2023, which focused on strengthening economic bonds and creating new investment opportunities, sets a precedent for meaningful collaboration between Africa and the CARICOM nations.
Afreximbank invites industry leaders, trade organisations and other stakeholders in the CARICOM region to participate and attend.
Registration is now open at https://2024.afreximbankevents.com.
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