Local expert says OECS Banking System sound

By Melissa Bryant
Reporter-SKNVibes.com

BASSETERRE, St. Kitts – ANTHONY GALLOWAY, Senior Manager in the Internal Audit Division of the St. Kitts-Nevis-Anguilla National Bank, has assured Kittitians of the stability of the local and regional banking system.

These remarks were rendered at a Central Basseterre Town Hall meeting on Thursday, October 30 at the McKnight Community Centre, where discussions were held on “The impact of global financial crisis on the lives of the people of St. Kitts and Nevis”.

According to Galloway, although “there is much anxiety on the effect of the global credit crunch in St. Kitts, rest assured that our banking system is sound. The meltdown is a result of the multitude of practices in the US and other developed countries relating to their housing market”.

Malpractices outlined by Galloway included speculation, high risk mortgage loans and lending practices, and inaccurate credit ratings.

He further stated that regulators in the US who had the responsibility to ensure that market abuses did not occur didn’t do their jobs, but that Caribbean banks are very prudent when giving out loans because they are giving out people’s deposits.

In response to whether banks would tighten their credit controls, Galloway told the gathering that presently the OECS is liquid and once liquidity remains high and loans that are applied for meet the criteria of a good loan, loans would continue to be dispersed.

“Real estate in the OECS has been stable. Our banks assess an individual’s ability to pay a loan so there is no speculative borrowing. Regional banks verify income, taking into account the applicant’s expenses, and they rely on the surplus of the loan before giving it out,” said Galloway.

“I am confident that the OECS banking system is sound, as our banks are well capitalised, well-regulated and we do not get involved in malpractices. Our regulators are not asleep at the switch,” he concluded.