Know your customer and anti-money laundering are phrases that won’t be heard at this year’s Cayman Islands Bankers Association conference, according to the Association’s President Eduardo D’Angelo P Silva.
Mr. Silva said these two terms have been beaten to death.
Instead, the focus of this 10th biennial conference, which began Monday at the Ritz-Carlton, Grand Cayman, will be about growing banking business in Cayman and highlighting how this specific sector provides the backbone for other financial industry sectors.
Governor Stuart Jack said government is determined to support the industry and highlighted his own involvement in the banking industry, which included a stint at the Bank of England during the early 1980s when the hot topic of the day was highly indebted countries, as well as working with Japanese banks in the 1990s during the Japanese banking crisis.
Mr. Jack said today’s upcoming banking issues include the EU Savings Directive and Basle II. He said these issues could prove to be opportunities for the industry as well as perceived as threats.
Timothy Ridley, chairman of the Cayman Islands Monetary Authority gave a detailed speech on international regulatory initiatives Cayman’s banking industry should watch, as well as the approach CIMA is taking to keep on top of these initiatives, both internationally and domestically.
Mr. Ridley said that Basle II was the single most important initiative that will affect the banking industry here, but that Cayman would be making sound judgments on this issue based on careful determination of what would be best for Cayman.
‘It is encouraging to see the Basel Committee recognising that jurisdictions may exercise national discretion and tailor the Basel II framework to fit their banking system and may set their own implementation timetable. Major jurisdictions such as the US are exercising this discretion. This matches our approach that, before we introduce any international standard here, we must be satisfied it is appropriate to our industry,’ Mr. Ridley explained.
Mr. Ridley ended his presentation by straying off his prepared speech, focusing on three areas he said are of grave importance to the industry. He endorses government’s move to review the subject of immigration, saying that this issue affected not only the industry but CIMA itself, as it struggled to attract the best employees.
Mr. Ridley also said the idea of introducing a fee on international banking transactions would be highly dangerous and fail miserably. Although the $1.2 trillion under management in Cayman’s banks may look attractive, levying a fee on these amounts would mean that the figure would simply move to another jurisdiction where such fees were not levied.
Mr. Ridley also mentioned the controversial subject of interest rates, saying that CIMA does not control what interest rates Cayman banks set.
Interest rates are driven by the US and as long as the Cayman Islands dollar is fixed to the US dollar, if the US sneezes Cayman inevitably catches the cold. He sees no reason to change this.
See the June edition of The Cayman Islands Journal for an in-depth look at Basle II and more of the speech by Tim Ridley