29 September, 2009

Banking



I heard a lie on the Chief Minister’s press conference today.  He said that the only way our two local banks can compete on the regional scene is if they amalgamate.  The local banks he was talking about are the National Bank of Anguilla and the Caribbean Commercial Bank.  The suggestion from the Hon Chief Minister (and, by the way, active Chairman of the Board of Directors of the Caribbean Commercial Bank) was that there is a need for the NBA and the CCB to come together.  We should get rid of the NBA and CCB as separate entities.  Somehow, this coming together of these two sprats will make them big mackerels and more capable of resisting the present financial crisis. 

In my opinion, there is nothing that is further from the truth.  Would our two small fry together be bigger than the American giants that failed and went bankrupt this year?  Absolutely not!  Size is no guarantee.  Competition and carefulness wins out every day.  The integrity and caution of the Boards in dealing with all the wonderful-sounding applications coming forward from the loans committees was what counted.  I want to know, what is the Chief Minister/Chairman of the Board hiding from us ignorant little people?

What we know for certain is that the CCB and the NBA working separately over the past 25 years have done wonders for the Anguillian people.  Competition has been good for the Anguillian consumer.  We have done well having these two banks competing with each other.  The consumers have been the ones to benefit.  That is you and me.  The two banks themselves have stayed lean and mean.  That was good for their shareholders.

Have you travelled by air recently?  Since Stanford’s airline went under and was bought by LIAT?  Service by the remaining monopoly provider sucks.  Prices have risen astronomically, and service has dropped precipitately.  There is no doubt that the absence of competition in the local airline service has been hard on the consumer, that is, you and me.  It will always be the same whatever the service industry.

God help us all in Anguilla if NBA and CCB should amalgamate.  The consumer, ie, you and me, will be the victim.  We will be at the mercy of avaricious, dangerous monopoly.  The shareholders of the strong will buy out the losses of the weak.  Naught times one always equals naught.

I kid you not!

Is the truth that one of the two local banks made too many bad loans?  Is one of them about to go under?  Well, so be it.  What is left after the bankruptcy will have to be bought out by someone.  Fire the Chairman and the Board of Directors of the bankrupt company.  But, no amalgamation between a failed bank and a successful one should be allowed while pretending it is a joining of equals, please.  Just my opinion.








14 comments:

  1. Don,

    If you follow the news you should have seen that calling someone in high office a lier isn't acceptable in our society. Please in the following refer to a lie as " I respectfully disagree with your interpretation of the facts".
    It will avoid you having to defend yourself in court and also avoid hard line supporters of the CM from slandering you in return.It is also more civil.Trust me, anyone that reads your blog would understand what the implication is without you spelling it out so crassly. Just a suggestion.

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  2. These comments by our chief are very disturbing and could easily cause a run on the banks ( NBA and CCB )
    Why would he say these things?
    We need to hear from the board of directors from each bank immediately regarding comments from our chief minister.

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  3. As a CCB customer, I totally agree. Competition is the best thing. I see no need for a merger of our 2 home-grown banks. I remember a time when Barclays was the only game in town. In those times, only the "big" fish could play. As a small "fry" myself, I would much rather have competition, so that my "kind" have a chance!

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  4. A merge of CCB and NBA sounds like a good deal for ScotiaBank

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  5. We don't need a merger between the banks, we need new blood on these boards.

    Its amazing how the same names or groups of people keep ending up on these boards, NBA, CCB, Anglec, Social Security and the likes.

    I can bet my bottom dollar it is the same people on these board who are advising the AUF and look where it has gotten us.

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  6. If the CCB and NBA are sound financially then there is no need for a merger.

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  7. I agree that the comments sound disturbing. Personally I withdrew most of my deposits from on of the banks months ago. If almost 100 banks have failed in the US so far just this year, I reasoned, is it possible for our banks to fail here? I was told that the ECCB has much more stringent deposit requirements for banks in the Caribbean than the FDIC has in the US, and therefore the caribbean banks were much safer. Better safe than sorry, I reasoned and now am wondering if I did the right thing.Interest on deposits at our indigenous banks is much higher than in foreign banks.Isn't that also a dangerous thing though, when the economy tanks???

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  8. A merger of CCB and NBA is like two drunks leaning together for support.

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  9. "We don't need a merger between the banks, we need new blood on these boards.

    Its amazing how the same names or groups of people keep ending up on these boards, NBA, CCB, Anglec, Social Security and the likes."

    Good luck. Those "same names" think that they own Anguilla...

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  10. The source of the "Merger" idea is the Central Bank which acts like it is a Dictator. The CM is just echoing what Venner said to them.

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  11. There needs to be full disclosure in the Public Domain on the investing of millions of our dollars bythe Social Security Board in the US Stock Market and in British American CD's.

    The Director and the Minister need to face the Public and explain exactly how much of our money was lost on these illadised ionvestments. They also need to disclose what, if any, commissions were paid on making those investments, and to whom.

    They need to disclose exactly who the persons were who made those decisions.

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  12. CCB and NBA need to tell us how much money they invested in the US stock market and British American CD's and how much money they lost on these investments.

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  13. LIke Milton Friedman said, regulation kills competition.

    The "very stringent requirements" mostly foisted upon Anguilla from outside, but piled on from the gov.ai, are the things that prevent banks on Anguilla from surviving.

    All done in the name of preventing terrorism, child pornography, drug trafficking, etc., but mostly to "enhance" tax revenue for the "Group" of 20 socialist "democracies". gov.ai attempts "enhance" its revenue as well, trying to slipstream behind the G20 peloton, pedaling as fast as it can to keep up.

    Welcome to the world of a unipolar, and increasingly socialist, superpower, folks.

    It's hungry, and it wants your money. All of your money, at this rate.

    How's that hope and change workin' out for ya, folks?

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  14. LIke Milton Friedman said, regulation kills competition.

    But...it was the LACK of proper regulation that led to the WORLD economic crisis. When those who control the financial institutions (& by extension, the financial institutions, themselves)have no ethics or conscience and are only after the almighty Dollar, then regulation is necessary.

    In a perfect world, those who oppose regulation might have reason to argue against rules and regulations.

    The world we live in is not perfect and is becoming ever more imperfect the more those who think they are better (either by intelligence or birth) than others and thus should not be constrained by mere rules and regulations find ways to bypass said regulations.

    The Regulations are not evil. More government becomes necessary when ethics fail.

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