WILD COOT: Wool over eyes
Old talk that the powers that be are now looking into the latest actions of the banks in user fees and arbitrary changing of banking arrangements does not make sense. If it is so, well, we are in a sorry state.
The banks could not do what they are proposing to do without the understanding of either the Government or the regulatory authorities. The coucou needs okra slush to make it palatable. On the issue of third party services, the Fair Trading Commission says: “This would also be an unfair contract term.” However, not paying Mr Al Barrack is also unfair, yet . . . .
The Wild Coot saw at first hand what transpired with Barclays Bank in Jamaica. As a matter of fact, he was the general secretary of the bank’s trade union liaising with the late Hugh Shearer of the Bustamante Industrial Trade Union. When Barclays was forced to sell all operations in Jamaica, it assessed its dealings in the Caribbean and although the area was most profitable, without Jamaica the profits were not enough. We are going to find ourselves in an impossible position. RBC sold out in Jamaica. You need to understand how a commercial banker thinks in satisfying the requirements of shareholders.
Now I believe that Government may want to deny that the banks confronted it with the inadequacy of the interest that they were offered (because of the limited resources) on Treasury bills, debentures and so on, something I have been talking about ad nauseum. Banks may have presented the Central Bank and Government with a scenario in which they needed to make sufficient profit to satisfy headquarters and justify staying in Barbados.
Maybe we are feeling what transpired. The fear is that like Barclays, they will up and leave if the operation only brings chicken feed. No matter how long or short that they have been here, the world around us is changing. I am still awaiting an explanation from Central Bank about the billion dollars transaction that appeared in the island’s records.
If we had a national bank, maybe chicken feed would suffice until the lean times are over, since we would not be accountable to overseas interests, save to ourselves. Bad decision!
Banks in addition to being forced to acquiesce to the FATCA obligation (belatedly signed in the papers recently although this was in the works since 2010), have taken the opportunity to tighten their expenses by farming out operations in a cheaper way to a cheaper source. The staff and customers in Barbados pay the price while staff and firms abroad reap the sweetness. The Wild Coot came across an old banker the other day and we thanked heavens or the Rosetta Probe that we had already been beneficiaries of a surfeit of sweetness.
To say that the banks per se have total control over what can be disclosed may not be totally true. Staff of a banking institution are obligated, irrespective of the actions of those in charge, to disclose to the relevant authorities any signs of money laundering that obviously come to their notice. They are held personally liable under the act. Does this also apply to staff of partners to whom data is contracted? If so, what rules are the partners governed by?
It is high time for banks and regulatory organisations to be candid with the public that supports 80/90 per cent of banks’ balance sheets. After all, they are not the only vessels of knowledge.
It gives Barbadians little comfort to see that their economic leaders would borrow a loan to pay a loan that would facilitate a loan to pay back the first loan that includes conditionalities that any further downgrade of the country would increase the interest rate on the first loan, when the loans possibility does not even give any immediate advantage. Increasing interest on a bad or recalcitrant debt is one aspect of banking that I think is immoral.
The excuse is that it compensates for the risk. Is not the customer/island in a less position to repay? This conditionality is being imposed by an institution that garners profit daily from the very country. We the citizens contribute to this usurious imposition. Shame on us! We are our worst enemy. What makes it detestable/ludicrous is that our leaders are reduced to this.
It is time that we do like Jamaica and tell these banks that we want a share in the commanding heights of the economy just like Tom Adams did. But Wild Coot, we had a bank. According to a lady recently, damn foolishness!
• Harry Russell is a banker. Email firstname.lastname@example.org