ST. JOHN’S, Antigua – Following the financial breakdown of Trinidad-based C L Financial Group in January, the unfolding Stanford empire demise in Antigua has significantly shaken regional consumer confidence in the financial sector.
On February 23, Governor of the Eastern Caribbean Central Bank (ECCB) Sir K. Dwight Venner addressed the people of Antigua-Barbuda and of the larger region, advising that it is critical for the region to remain calm and understand the breadth of the situation.
“We are in the midst of a financial and economic crisis of which it is said that no comparable circumstances have occurred since the Great Depression of 1929-1933. Economic growth has declined dramatically in all advanced and emerging economies and the value of global markets has shrunk by some $30 trillion.
“The rate of growth in Antigua-Barbuda and in the Currency Union has also declined due to the fall in tourist arrivals and expenditure, foreign direct investment and remittances; the demise of CLICO which has had a marked impact on the confidence of financial markets in the Eastern and Southern Caribbean; the difficulties being experienced by Bank of Antigua on account of an external factor and an impending election in Antigua and Barbuda.”
Sir Dwight described the situation in Antigua as a “very unstable and volatile environment and not the most conducive for conducting such a delicate exercise as we are now embarked upon”. He underscored that if citizens remain calm, it allows the necessary authorities to address the matter in a “smooth and expeditious” manner to return the situation to its normal state.
“We also pointed out that the nature of any banking system is such that all the deposits that are in a Bank cannot be withdrawn on the same day. If this were the case the bank would simply be a place for warehousing money. It is virtually impossible for a bank to ask a businessman or house owner to pay back the loan instantly so that it can repay its depositors.
“Banking and finance therefore is about trust, confidence and credibility. Trust accumulates slowly over time and facilitates financial progress. If it falters or is betrayed it can destroy financial institutions and economic systems.”
Venner indicated that the financial experts at the ECCB are working closely with all the relevant stakeholders to ensure that the stability of the Currency Union is protected, stressing the need for “calm, good sense and the absence of speculative statements” as they may pose unnecessary distractions to the Central Bank’s efforts.
Antigua News