ST. JOHN’S, Antigua – IN light of the recent developments surrounding the Stanford Financial Group legal plight and the consequent alarm that has set in within the nation’s financial sector, Minister of Finance and the Economy Hon. Dr. Errol Cort has declared “there is no need for panic” as all necessary policymakers are working assiduously to maintain stability.
The nation’s financial sector spun into turmoil following the US Securities and Exchange Commission Feb 17 announcement that the Texas mogul Robert Allen Stanford was being charged with massive, ongoing fraud.
Stanford Financial Group has several subsidiaries in Antigua including the Stanford Bank of Antigua and Stanford Investment Bank.
During a February 18 address to the nation, Dr. Cort informed that he met with the Governor of the Eastern Caribbean Central Bank (ECCB), Sir K. Dwight Venner along with the country’s Attorney General, representatives from the Bankers Association and various senior managers of domestic banks to review the current state of affairs in respect of the financial stability of the country.
“Cognizant of the critical nature of the current state of affairs at the Bank of Antigua Ltd and in an attempt to stabilize the situation, participants collectively agreed on a plan of action to maintain and preserve the viability and stability of the financial system here in Antigua and Barbuda.
“Depositors can be assured that every effort is being made to expeditiously execute the plan of action in order to safeguard and preserve their financial interests. I say to depositors here in Antigua and Barbuda that there is no need to panic. Based on the plan that has been agreed upon by all parties, deposits in the banking system are safeguarded,” Dr. Cort said.
The Minister of Finance said given the support from the ECCB and the Government of Antigua and Barbuda together with the support from the nation’s commercial banks, “depositors, at Bank of Antigua or in any other commercial bank here in Antigua and
Barbuda should have no fear. There is no need for panic. The matter is well under control”.
A representative of the Antigua-Barbuda Bankers Association Everett Christian echoed similar sentiments stressing that the authorities have arrived at a “workable and amicable situation”.
“The Antigua-Barbuda Bankers Association is of the view that if customers continue to withdraw funds from Bank of Antigua, this could destabilize not only Bank of Antigua but the entire financial system. We discussed a contingency mechanism to assist
Bank of Antigua in the event the need arises. Details of this mechanism are still being finalized. “The Antigua-Barbuda Bankers Association wishes to advise that all banks operating in Antigua will continue to honour all Bank of
Antigua cheques subject to normal clearing house rules and processes. We take comfort in the fact that the banking sector continues to be highly regulated by the ECCB with notable success over the years.”
Although Christian worded his hopes for confidence in Bank of Antigua and the financial sector on a whole to be regained, many depositors have indicated that they are not comforted by the statements. Some opined that it was made in too short a time frame for any real assessment and comprehensive, sustainable contingency action-plan to have been put into effect.
Meanwhile, there has been no visible reduction in the lines at the Bank of Antigua as hundreds of depositors are still making attempts to withdraw funds even though the Bank was not one of the three companies named in the US fraud charges.
In Panama, it was reported that bank regulator stepped in and took control of Stanford Bank as similar depositor panic caused a rush for cash withdrawals.
Government assurance may have little or no impact on depositors and investors since according to Rose Romero, regional director of the SEC office in Fort Worth, Texas, “We are alleging a fraud of shocking magnitude that has spread its tentacles throughout the world.”
