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by pltm
(PLTM) - The territory's main economic pillar, Financial Services Industry has seen a drop in revenue figures this year, according to Premier and Finance Minister Hon. Dr Orlando Smith.
However, Dr Smith did not provide the figures to show the exact loss the industry had this year.
Speaking last evening, December 6, during an Address to the Territory, Dr Smith, who spoke extensively about the challenges facing the industry, said that following the 2008 great depression, financial services institutions that do business in the BVI were particularly hit hard as the global flow of investment slowed down sharply.
"...So the bottom line is simply this – As a result of these challenges to the sector, in 2016 the revenue our Territory has taken in from our financial services industry has declined somewhat. But in the face of these challenges, we are not standing still – we are responding on all fronts," the Premier said.
He said as the global economy began to recover, a new shock to the system was felt as regulators in the United States of America, United Kingdom and European Union all began to crack down hard on banks and other financial institutions.
Premier Smith said that billions of dollars in fines were imposed upon these companies.
"Suddenly, the banks that do business here in the BVI were concerned not just about serving their customers and clients but also about “de-risking” their operations – which is another way of saying they wanted to make sure they do nothing to offend their regulators."
He explained that in this context, banks began reconsidering how they do business here in the BVI and in other jurisdictions and some banks began exiting the region entirely.
"That situation became significantly more difficult with the publication of the so-called “Panama Papers.” Despite the fact that these papers were illegally hacked from a law firm; Despite the fact that these papers produced much smoke, but little fire," he asserted.
"Still, the media sensation they caused, coupled with the fierce attacks of certain NGOs and politicians have created even more fear among the banks and other businesses that support the BVI financial industry. All of this is having an impact."
The finance minister said that indeed, these trends as they relate to derisking are so serious that the Deputy Chairman of the World Bank was moved to issue a warning that they threaten the stability of the entire Caribbean region.
The Premier who outlined the efforts being made to keep the industry moving, noted that the BVI is fighting with all of its might to protect the financial services industry and to put it on course for sustainable growth long into the future.
"First, we are defending the reputation of our industry against all those who would besmirch it. Let me say to you clearly – the financial industry of the BVI is among the world’s best regulated and most transparent. And it is an industry that provides an essential and valuable service to the entire global economy," Dr Smith stated.
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