Tag Archives: Banking

The Imperialism of the US Dollar and the Global Wars of the Banking Titans

Submitted by Pachamama
BRICS initiative to establish a US$100 billion multilateral bank to rival the World Bank has recently been a subject for discussions between Presidents Putin and Rosseff in Brazil and is sending shockwaves throughout the international financial community

BRICS initiative to establish a US$100 billion multilateral bank… is sending shockwaves throughout the international financial community”

After World War Two virtually all national economies were in ruins, except the United States, of course. These circumstances gave rise to the United States dollar as the medium of exchange between countries. In this process countries were forced to exchange their national currencies for US dollars to settle amounts owned to foreigners. And foreign countries were force to do the same to pay for goods and services. In both cases fees were charged, by predominately American banks, making the transactions more expensive than if national currencies or a basket of currencies could have been used.

This structure gave rise to United States banks as the leading financial institutions in the global economy. In addition, the post Bretton Woods architecture made the US dollar the reserve currency of the world. By 1971 the pretense of a ‘gold standard’ was removed as we entered the age of the supreme fiat currency. This monopoly by the major United States banks was later seen as a source of stupendous political power as the USA then sought to impose sanctions and USA law on world countries and other entities when it perceived that its interests were at stake. In recent times an overarching global grab for power has seen the USA imposing penalties on European banks for alleged violations of US law, for actions occurring outside of US territories. It’s a staggering development that although these competitor institutions never did anything in contravention of their national laws, that the USA could have the audacity to have determined that its laws had been broken. For the laws of Empire must have precedence over those of its colonies.

At the micro level, if a ‘shoemaker man’ from around dey by de bus stand went to Trinidad & Tobago for carnival and sent back 10 US dollars to his son, both the Trinidad and Tobago authorities and the Barbados authorities would have to inform the Treasury Department of the USA about that transaction.

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Is the Caribbean Canadian Dominated Financial System Headed for COLLAPSE ?

Submitted by M.R.Thompson
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CIBC announced in mid-May that it would take a $420 million goodwill impairment charge related to its Caribbean operation.  CANADIAN PRESS FILE PHOTO

It is generally recognized that the majority of the Caribbean Financial System is dominated by Large Canadian Banks. As the financial economy of the Caribbean slips every deeper into recession and the banking loses keep piling up what will be the reaction of the major Canadian Banks. They basically have three (3) choices: 1) stay in the Caribbean and make adjustments to ride out the LOSES, 2) Sell their Caribbean assets, 3) Write off their Caribbean Loses and abandon the market totally.

In all three scenarios the Caribbean Financial System is in for a rough ride or total collapse.

A recent news article outlined the situation form CIBC’s point of view…. Canadian banks get burned in the Caribbean.

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Some RBC Employees Feeling the Squeeze

Chief executive, Caribbean Banking at RBC, Suresh Sookoo in an interview on the sixth floor of his St Clair, Port of Spain office last week. —Photo: Mark Bassant

Chief executive, Caribbean Banking at RBC, Suresh Sookoo in an interview on the sixth floor of his St Clair, Port of Spain office last week. —Photo: Mark Bassant

The media across the Caribbean has been highlighting the matter of whether Royal Bank/RBTT employees are being marginalized. According to our source employees are disappointed about the deafening silence of the local media – see Trinidad Express article.  Our source opines that in local banking circles RBC has become a laughing stock, the merger has done nothing except hurled the bank to the doldrums.

BU is being told personal lending has all but dried as a result of increasing delinquency. It is alleged the lenders at the bank are being told to move away from the mass market and to concentrate on the professionals groups like doctors, lawyers for example.

Workers continue to await the outcome of union and management of the bank but it appears to be a ‘Mexican Standoff’.  During the stalled talks employees are being severed, ‘final warning’ letters are given to those especially in  lending who have gotten a ‘low performance’ appraisal for the last two years, with the ultimate action being termination if improvement is not shown.

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Prime Minister Urges Financial Institutions to Lend Money to the Hospitality Sector

Submitted by Due Diligence
Prime Minister Fruendel Stuart

Prime Minister Fruendel Stuart

Thanks David for the link to the PM’s testimonial for Ocean Two at  http://bajan.files.wordpress.com/2013/08/untitled1.mp3. Not being familiar with the Ocean Two property, I checked it out at TripAdvisor which confirms the PMs glowing report. It is great to read.

It is a bit confusing why the PM would single out one property for endorsement; but there has to be a reason. The PM’s remarks about its secrets of success being underpinned by “serious Investment” are obvious. His comments that “The splendour of the surroundings speak with moving eloquence of the commitment of the owners of this property to investment in the property” are indeed eloquent.

One should bear in mind that the amount of investment required for a property of this size is not “chicken feed”. If Peter DeFreitas’ motivation to make such a significant investment is to support the Barbados tourism industry, he is to be commended. If his motivation is to earn a Return on Investment, only he and his lawyers, accountants and bankers know if he has been successful.

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The Road to Sustainable Growth

Submitted by Due Diligence

We hear from the Minister o Finance (and others) that the road to recovery and

Royal Bank of Canada

Royal Bank of Canada

sustainable growth is constructed on such things as:

  • Increased Competitiveness
  • Increased Productivity
  • Increased Efficiency
  • Accountability

Sounds great; but the key is  in the execution. The same principles, of course, apply to both the public and private sector.

The article on Page 3 of Barbados Today illustrates an example of execution of those principles in the private sector.

According to the article, RBC is clamping down on those employees (mainly those  employees absorbed in the merger with the former RBTT) whose performance has been substandard – those who have performance gaps in meeting targets, deadlines etc.  Making them accountable for their lack of productivity.

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Scotiabank Bond a No Go

Submitted by Napolean Bonaparte
UWI, Cave Hill,Barbados

UWI, Cave Hill,Barbados

So what is the next move now? Starcom 5.30 pm afternoon news, (but not CBC TV) informed the listening public of the latest twist regarding a $190 million loan facility arrangement supposedly effected to the benefit of UWI …. to be repaid by the government of Barbados.

Scotiabank spokesperson informed  a big no way Hose` as the proposed arrangement was not within their required lending specs. So where has this idea originated from or should we say “floated”?

Could never really comprehend the meat of this matter totally, as details given were always rather sketchy. Matters of  a Jazz J Bonds must say or the likings of the kind. Egg and more egg on faces too will follow, but more importantly how will the UWI function this academic year, given an  additional 2000 students were said to be taken on the strength of this now hiccuped arrangement?  University staff too shall soon be dreaming up horrors and even bigger unsecured fright nights over the coming months if some new arrangement is not put in place before Halloween.

There again which worker in Barbados won’t be?

RBC Employees in the Bahamas Fear Job Losses,,,Next?

Nathaniel Beneby, head of RBC Bahamas

Nathaniel Beneby, head of RBC Bahamas

BU has been asked to highlight the fact that RBC has started to retrench workers in Bahamas. Ever since RBC acquired the assets of RBTT in 2007 interested observers have been waiting for the hammer to drop on staff as a result. When two business entities come together there is always an inevitable result.

The BU household sympathizes with those RBC employees who will likely lose jobs in this guava season BUT this is the way business (especially Big Business) operates. A recent example of significant restructuring which resulted in the loss of jobs is LIME formerly Cable&Wireless. The government of Barbados will not want to hear about RBC (banks) sending home employees at this time although there is hardly anything our banana republic governments can do to prevent it.

See link to article received from a concerned employee:

Canadian Government Continues to Hunt for Tax-Avoiders

Submitted by Not Taken
Canadian government has Cameco in its sights for $800 million

Canadian government has Cameco in its sights for $800 million – Photo credit: The Globe and Mail

Yet another interesting (scary for Barbados) article – Cameco’s $800-million tax battle. I have been sending these recent articles  as a public service so the Minister of Finance (MOF) and Governor of the Central Bank have a heads up on the attack on Canadian tax evaders/avoiders that is undoubtedly about to hit the Barbados offshore industry; if in fact it has not already hit – but unreported.

This is very bad news for Barbados revenue sources. While the Cameco case involves its Swiss subsidiary, it is probably just the tip of the iceberg in CRA’s efforts to collect taxes due to Canada. There must be hundreds, if not thousands, of  Canadaco (Barbados) Limited businesses doing the same same transfer pricing schemes (scams) in order to pay 2% income tax to Barbados, rather than 27% to Canada.

Even those Canadian companies not not already being audited for this this type of tax “management” may decide for close up shop in Barbados to avoid the publicity that a CRA audit will bring.

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Notes From a Native Son: Are We Seeing the Beginning of a Chasm Between the Ministry of Finance and the Central Bank?

Hal Austin

Hal Austin

Introduction:
We must all offer our congratulations to finance minister Chris Sinckler for having the bravery to change his mind about the management of the economy. One can only imagine the amount of pressure that was on him, mainly from the DLP’s private economic advisers and the central bank governor, to continue down the policy cul de sac of a stubborn rush for growth at the end of which was national destitution and even more street crime. His decision to launch a Bds$600m economic stimulus is brave, and right, even if it has come a little too late. However, it is better to be late than never.

The challenge now for the minister and his senior advisers is how are they going to source this $600m that is now urgently needed and, once it has been found, how is it going to be spent. He must not resort to posturing or rhetoric and doing dodgy arithmetic to arrive at the numbers. Of course, as I am often reminded, the government is not in need of economic advice from me, nor am I offering it; but, instead of borrowing from external agencies, and incurring even more debt, the minister should dig in to the $1.2bn in foreign reserves which is money left idle, similar to old ladies putting their life savings under the mattress. This would be a much better and prudent strategy than robbing future generations of pensioners by taking it from the national insurance scheme.

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Notes From a Native Son: Before Voting, think with your heads and not your hearts

Hal Austin

Hal Austin

Introduction:
When the voters of Barbados enter the polling booths on Thursday, it will be an enormous challenge for them to abandon old political tribal loyalties and objectively put the nation, future generations and their own futures before irrationally supporting a party or candidate they have always supported, while suspending reason. The harsh truth is that this is the most testing general election, not only since November 30, 1966, but since the early 1950s and the introduction of internal self-government.

In the new globalised world, there is no turning back for small nation states such as Barbados. New global organisations, such as the World Trade Organisation and the newly re-energised International Monetary Fund, now have power over small states, mostly wrapped up in international treaties, that they have never had before. At the same time, rich and powerful nations are subsidising their farmers and industrialists, such as car manufacturing and farming in the US, farming in the EU, and a long list of state-owned or controlled industries in China, which put further pressure on small states. But we are not just economic people, as a nation we are rounded with equal value given to our social relations, our civic and moral responsibilities and our cultural and creative environment.

Increasing Government Productivity:
One of the biggest drags on growth in Barbados is public sector efficiency, from improvements in technology, competent management to output per person. One only has to read the annual report of the auditor-general to see the extent of public sector incompetence. Take a simple, but important example, uncollected VAT. Value added tax is a sales tax paid by consumers and collected by trades and service people. For convenience, that money is paid to the government at pre-set dates – monthly, quarterly etc. However, in Barbados, there is a huge backlog of payments, of business people failing to handover to government monies collected on its behalf.

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