Finance Minister confident in nation’s financial sector

By VonDez Phipps
Reporter-SKNVibes.com

BASSETERRE, St. Kitts – DESPITE a ‘global economic recession’, Minister of Finance and International Trade Hon. Dr. Timothy Harris has maintained his confidence in the stability and security of the financial sector in the nation and in the region at large.

Harris, in an exclusive interview with SKNVibes, opined that the financial downturn in the US and UK has resulted in stark global impacts in other countries with regard to reach and dimension. He however noted that as it relates to St. Kitts-Nevis, based on consultations with the Eastern Caribbean Currency Union, he is comforted that the financial sector remains stable and attributed it to four major factors.

“Firstly, our banking sector has not engaged in the type of lending and mortgage investment seen in the US. Our banks have very strict commercial criteria in terms of granting loans. In the US though, the values underpinning the loan sector were deteriorating as persons who did not qualify for loans were encouraged to take more than can be afforded.

“Secondly, our banks do not practise a lot of inter-banking; they are conditioned to live within their own means. Thirdly, most of our banks are Canadian and the Canadian banking system has been recently adjudged the safest in the world.

And, in the same way, the banks here insist upon maintaining a high degree of financial security and safety. Finally, the Eastern Caribbean Central Bank has been ensuring that proper regulation of commercial banks is carried out; every bank has to maintain a particular deposit.”~~Adz:Right~~

Dr. Harris stressed that concern should not be placed on the country’s banking system but on “the real economy”. He projected that one of the areas that will be challenged is foreign direct investment, an area which he said is being continuously monitored, adding that all of the major investment projects in the country are considered long-term.

On a separate note, Harris pointed out that the level of foreign remittances received by the country will be considerably less.
“It is obvious if people are being financially pressured then they would have less disposable income”.

Commenting on the impact of the US economic crisis on local tourism, the Minister informed that since the country’s principal market for tourists was the United States, those experiencing “financial squeeze” would forego travel which in turn would have far-reaching impacts on the economy.

“In spite of any grim market outlook, our economy is still financially secure and I want to encourage our citizens to save, and practise wise spending and continued investment which  remains a safe move.”