||Central Bank Of Barbados
Central Bank of Barbados Governor Dr. DeLisle Worrell commended the Financial Stability Board for incorporating small open economies in the decision making process on de-risking. Governor Worrell’s comments came at a meeting of the Financial Stability Board in London on November 17.
“We must compliment the FSB for having opened an avenue for small international financial centres like Barbados to participate in the process of decision making on this matter of vital importance to the growth of our international business and financial services sector,” the Governor stated.
De-risking strategies, at the centre of which is the severing of correspondent banking ties by international banks, has resulted in unwanted dislocation of banking relationships internationally.
Dr. Worrell pointed out that international business in Barbados has been hampered by a complex web of international regulations and strictures, even though Barbados has an enviable reputation as a competitive, well-regulated, transparent country, which provides financial services of high quality. He noted that the de-risking strategies adopted by banks operating in Barbados have been introduced very reluctantly, and only because they see no other way to ensure that they are not the victims of some sensational news item. What makes their situation difficult is the fact that damage is done, and their share price may fall, even if the news proves to be unfounded.
A second item of interest to Barbados on the FSB agenda was financial technology. The meeting was told that the innovations most likely to affect how business is done are the distributed ledger technology (of which Bitcoin is an example), arrangements for small business to raise funds from many small contributors via the Internet, online lending by financial institutions, "digital wallets" where one can store and spend money, and financial advice from computer algorithms. These services could affect consumer banking, transfers of funds, payments, investment, and the financing of small business.
The potential benefits of financial technology include increased competition for traditional financial institutions, greater access to finance, more diverse financial services, and possibly an overall increase in the efficiency of the financial sector. However, there may be potential drawbacks because there could be a growing number of less well supervised financial institutions.
Governor Worrell attended the plenary meeting of the Financial Stability Board meeting in his capacity as co-chair of the Regional Consultative Group for the Americas (RCG_A) for the period 2015-17. The FSB, which is chaired by Dr. Mark Carney, Governor of the Bank of England, brings together central banks and financial regulators of the world's most powerful nations to oversee the process of international financial reform. The RCG_A is one of six affiliate groups established by the FSB. The members of the RCG_A are Canada, Barbados, Argentina, Bahamas, Bermuda, Bolivia, Brazil, British Virgin Islands, Cayman Islands, Chile, Colombia, Costa Rica, Guatemala, Jamaica, Mexico, Panama, Paraguay, Peru, Uruguay, and the United States of America.
FSB Plenary Press Release.pdf