While lauding the Central Bank’s decision to allow the market to determine the interest rate on most deposits in commercial banks, a private sector leader says attention should turn to another pressing issue facing businesse when it comes to the banking sector.
John Williams, chairman of the Barbados Private Sector Association, told BARBADOS BUSINESS AUTHORITY on the weekend that businesses wanted the establishment of a system that made it easier for companies and individuals to move their loans from one financial institution to another.
Williams said: “The business community feels strongly that there must be the ability to transfer loans, whether they be mortgage loans or other secured loans; it must be made easier because right now it is very difficult.”
He said the cost to transfer loans “to take advantage of a better rate at a different institution” was prohibitive.
Williams said that while the Central Bank alone could not achieve the change on its own,
“We have certain processes and I agree it is not something that is a Central Bank responsibility but, given their efforts to make the market more efficient, that is usually part of a responsibility of an overarching body like the Central Bank.”
Regarding the interest rate policy change announced by the Central Bank on Thursday, the Private Sector Association chairman said “generally speaking, as a private sector organization we are in favour of market-driven rates”.
Williams said businesses not only held deposits but had loans as well and there was an expectation that the cost of servicing loans would fall.
“The important thing is that once the market is allowed to work properly, then we see it as a positive for a market economy,” he added.
Regarding the Central Bank’s plan to actively intervene in the Treasury Bills market, Williams said: “We are going to have to wait and see how this works.
To the extent that that intervention facilitates the market and makes it more efficient, then we see it as a positive.”
Williams is also chief executive officer of Cave Shepherd & Co. – a financial services and retail conglomerate.
