Caribbean banks – shot in the foot

THE EDITOR, Madam:

My brother in Belize shot himself in the foot while trying to kill a snake that was minding its own business. Shooting oneself in the foot has a sister expression, ‘cutting off your nose to spite your face’. The first expression, oft used in corporate scenarios, is behaviour that makes things worse for yourself as you attempt to accomplish something else, often mundane.

This phrase has useful application in the distorted world of bank deposit insurance in the Caribbean. To be clear, some island nations with a priority on protecting citizens and visitors, have some degree of protection of the customers’ bank deposits. Surprisingly, one of the biggest tax havens in the Caribbean, has absolutely no deposit insurance for bank customers.

Forewarned is forearmed.

Distracted by such lesser matters as the grey list, more expensive oversight bodies, know your customer policies and other bureaucratic growth industries, Cayman policymakers have dropped the ball on safeguarding the financial future of voters. The local regulator, Cayman Islands Monetary Authority or CIMA has failed miserably, despite the early tremors from the Silicon Valley Bank disaster.

Some of the Caribbean country deposit insurance amounts in US dollars are:

British Virgin Islands $100,000

Bahamas $50,000

Trinidad $30,000

Jamaica $7,500

Cayman Islands $0

For all its limitations, Jamaica is head and shoulders above so-called financial centres with regard to bank deposit insurance and hurricane insurance, so much so that there are calls to copy their leadership. They have failed miserably in financial oversight in cases such as Usain Bolt’s missing millions in the Stocks and Securities Limited (SSL) scandal.

There will also be cries of greater priorities, under discussion, consultant reports or other political side stepping. The world is changing, not in a good way, with policy often being set in Washington.

Perilous times command greater protection of the pocket.

Governments have a duty, not only to cover the hard earned savings of people, but to ensure that coverage is of a substantial amount.

Luckily, the country has had decades of solid service from the Canadian banks that have

$100,000 coverage in their home country as well as that invaluable advisor reputation. The Cayman National Bank –recently acquired by Trinidad– will have to make its own way.

A stitch in time.

PETER POLACK