||Central Bank Of Barbados
The encouraging prospects for Canadian banks in Barbados, mirroring the turnaround in the economy, was the main topic of discussion during the annual visit to Toronto and Ottawa by a delegation of Barbadian financial officials, headed by Central Bank Governor Dr. DeLisle Worrell and Financial Services Commission CEO Randy Graham. In the wake of the 2008 international financial recession, banks saw an increase in the volume of loans that were not serviced fully and on time; arrangements have been made to resolve this problem, and a proportion of nonperforming loans has declined. In addition, banks have become more profitable, although the Caribbean operations of the three Canadian banks in Barbados still yield a lower return than in Canada. The liberalisation of interest rates by the Central Bank has allowed banks to manage their portfolios more flexibly in circumstances where international interest rates are very low, and the banks have large amounts of liquid funds, over and above private borrowers' needs.
The actions taken by Canadian banks to limit their exposure to risks associated with dealings that may increase the overall cost of compliance or become the subject of media attention, was another major concern. Governor Worrell made a presentation at Carleton University on this topic, entitled "De-risking in Barbados: the unintended consequences of international financial reforms", in which he concluded that international banks in Barbados (and elsewhere) have been divesting themselves of business and severing customer accounts as a result of a complex web of pressures, including measures they have to take against money laundering and terrorist financing, information they are required to have on customers' taxes, and other information requirements. Banks are adopting these de-risking strategies very reluctantly, only because they see no other way to protect their reputations, and to avoid the risk of large fines that are out of proportion to the profitability in small financial markets.
In discussions with bankers and officials, the Barbados delegation expressed confidence in the future of our international business and financial sector, which attracts most of its investment from Canada. Canadian banks, insurance companies and businesses are able to improve their international competitiveness through their subsidiaries in Barbados, and in the process they employ Barbadian skills and professional services. There are benefits for Canada, in the expansion of global companies headquartered in Canada; for Barbados, in the value added and jobs created here; and for the global consumers of the products and services of our international companies, because they get better value for money.
The Barbados delegation provided an update on the country's economic performance and prospects, noting the recovery of tourism, new initiatives in alternative energy and the improvements in inflation and employment. They mentioned the ongoing challenges, including medium-term deficit reduction and the need to increase labour productivity.
Fruitful discussions were also held with the Canadian Chapter of the International Business
Association and other tax professionals during which strategies to bolster the Barbados brand
were explored and suggestions shared on the particular professional skills necessary in
Barbados to continue the sector’s organic growth.
Meetings were held with Governor Stephen Poloz of the Bank of Canada, Deputy Governor
Carolyn Wilkins, who is co-Chair with Dr. Worrell of the Regional Consultative Group for the
Americas, Timothy Sargent, Associate Deputy Minister and G7/G20 & FSB Deputy for Canada
and senior officials of the Bank of Canada, the Ministry of Finance, the Canadian Office of the
Supervisor of Financial Institutions (OSFI) and senior management of banks and insurance
companies. Meetings were also held with staff of the Barbados High Commission in Ottawa and
the Barbados Consulate in Toronto. Governor Worrell also addressed meetings of the diaspora,
investors interested in Barbados, and Commonwealth High Commissioners to Ottawa.
Barbados Delegation Visits Canada.pdf