Tourism Minister Charles Clifford accused commercial lending banks of operating like a cartel on Friday during his contribution to the budget debate.
Mr. Clifford also suggested that the Cayman Islands Development Bank could one day take on the role of a central bank, dictating interest rates to commercial lenders.
He said it was important to draw a distinction between the role of a development bank and a central bank, but added ‘perhaps one day it can grow into that role (of a central bank).’
Mr. Clifford was responding to comments by opposition leader MeKeeva Bush that, having opposed its creation in 2001, the Government was now unprepared to take advantage of the CIDB to provide cheaper loans to Caymanian businesses and individuals.
Mr. Bush said the PPM should arrange additional funding for the CIDB so it could bridge the gap that exists for businesses and individuals in relation to interest rates and access to funds.
‘The PPM has had two years to organise the additional funding and it is time this was done.’
Mr. Clifford defended the Government’s management of the CIDB, noting that between June 2004 and December 2006 the bank recorded asset growth of 164 per cent. Its loan portfolio grew by 169 per cent over the same period, he added.
Mr. Clifford said the CIDB had initially been hamstrung because Mr. Bush’s government failed to put in place operational and lending policies; something the PPM government had since implemented.
Mr Clifford defended the Government’s track record of encouraging small business.
‘I don’t think there has ever been a time when a government has placed such an emphasis on small business,’ he said.
In addition to the role being played by the CIDB, the Cayman Islands Investment Bureau was also helping to stimulate economic development through the growth of the small business sector, he said.
Mr. Clifford’s comments came after Bodden Town MLA Osborne Bodden’s suggestion that the country enact antitrust laws to help curtail the high cost of living.
Speaking last week in the Legislative Assembly, Mr. Bodden said bank interest rates and fuel costs were two of the major culprits for Cayman’s high cost of living.