21st July, 2010
Mr. Speaker, according to former British Prime Minister Benjamin Disraeli there are three kinds of lies: “Lies, Damned Lies and Statistics!”
The more and more that I listen to the side opposite I am convinced that statistics have become a brand of makeup. They use them loosely. Selective statistics are used to paint rosy pictures without telling the full story.
In my opinion, they have attempted to cover up and hide the real deep-rooted issues facing our financial services industry all in an egotistical attempt to beat their own chest. No matter how much we dress it up our financial services sector is not as vibrant and competitive as it used to be. We have lost ground and lost business. We can throw around statistics all we wish. The Government can spin all it wishes (and they are definitely good at that). I am not convinced.
The Hon. Member for Marco City in his contribution spoke of how well the financial service industry has been doing since major legislative changes in 2000. He used those good ole statistics. Is the increase in employment that he boast about in the sector due to increased business or the increase in the number of compliance, legal and other officers necessary in order to do business today? What about salaries? What about the number of Bahamians holding top positions in these major banks and financial institutions?
Is the decrease in the number of banks and trust companies due to the requirement to have a physical presence in the jurisdiction? Are we to solely believe the words and “statistics” of the Honourable Minister?
How does he explain the departure of significant financial services providers from the jurisdiction?
Since 2000, Lloyds TSB Bank and Trust has closed its doors locally.
Cardinal Bank has closed its doors.
Citibank has closed its commercial bank arm.
Fortis is no longer in the jurisdiction.
Oceania Bank is gone.
Meespierson and others have sold their portfolios and left the Bahamas.
McDermott has left the country.
My understanding is that BNP Paribas will be gone by the end of the year and Butterfield Bank will be following closely behind.
Information coming to me suggest that Pearl Investments, a division of Credit Suisse may be a thing of the past locally by the end of the year. What is the Government’s position on this? What are we doing to save this business? Will there be more people on the unemployment line due to the fact that this Government is paralyzed and unable to act?
When I last checked all of these banks were major players and had a physical presence in The Bahamas. We need to really determine why they are leaving the jurisdiction and address the root cause. We have to drop the stats at the door, wash off the makeup and agree that we are challenged with regards to our competitiveness.
The real statistic that the Government ought to be discussing is the number and value of deposits held in Bahamian financial institutions. I am advised that deposits have declined considerably over the past 10 years. According to one law firm website, www.panamalaw.com (http://www.panamalaw.org/jurisdictions_to_avoid_bahamas.html)
which promotes the benefits of financial services in Panama, there has been a decline of 45% in deposits held by Bahamian Banks. While it is doubtful that the percentage decline is this high we must really look at issues such as this. The website further goes on to highlight disadvantages of banking in The Bahamas and refers to our jurisdiction as a Tax Haven to avoid. Regardless of the motives of the website, we ought to be very concerned about the impact on the image of our financial services industry.
While we support the amendments put forth today and agree with the need to strengthen and improve the regulatory regime, we must begin to look at the bigger picture and realize that we are losing ground. If our financial services industry fails we will all be affected. The need to act and do all necessary to attract deposits, and top notch bona fide and legitimate clients is now. The world and our competitors will not wait on the Bahamas. It’s a rat race!
Finally, Mr. Speaker, I want to inquire about the Government’s commitment to signing on to the International Organization of Securities Commission as an ‘A’ Signatory. My understanding is that this has been on the table for some time. The Government knows that the fund industry is under considerable international pressure due to this Government’s inability to act.
We cannot brag about some things and leave out others! Are we serious about the fund industry and financial services? When are we going to become an ‘A’ Signatory to IOSCO? The financial services industry wants to know!
While we support the amendments today, the focus is not where it also ought to be. Should we continue to be fooled by selective statistics and fail to address the real concerns and challenges facing the financial services industry we won’t have much of an industry to regulate. It is time to wash off the make up and deal with the real problems.