Continued Sound Economic Growth
The Rt. Hon. Hubert A. Ingraham, Prime Minister of the Bahamas, spoke at the recent opening of the Bayside Executive Park, a $30 million commercial property housing four international banks. He affirmed that the government “is keenly interested in the growth and development of our financial services sector, an important and treasured pillar of our economy, and in the continued availability of employment for qualified Bahamians in the sector”.
The Prime Minister took the opportunity to comment on developments in the banking industry, pointing out that for some 30 years prior to the enactment of the Bank and Trust Companies Regulation Act 1965, large numbers of banks (and financial institutions passing themselves off as banks) conducted business from The Bahamas. After 1965, this number was reduced as a result of the new regulations, and today of the 400 banks, 200 maintain a physical presence. The Prime Minister expressed confidence that the financial services sector and the government share a common objective — that is, that banking and trust business must “be here to stay”. Since 1965, The Bahamas has had uninterrupted growth and development, underpinned by the commitment of long-term partners. The presence of the many international corporate partners in The Bahamas was credited as giving encouragement of a bright and prosperous future over the next 30 years.
The response to recent global challenges was the creation of a legislative regulatory and supervisory system consistent with the best standards in operation and/or contemplated in other jurisdictions with which The Bahamas was familiar in the conduct of financial business. The Prime Minister further pointed out that the nation sought to act prudentially in addressing issues, and in this exercise the Government took advice from the financial services industry, and most particularly the banking sector. The Bahamas, has acted appropriately, he said, “to enhance the financial sector and to make The Bahamas once again the undoubted financial services jurisdiction of choice outside of North America and Europe” for discerning, discriminating and reputable financial service providers.
Included in the package of new industry legislation enacted at the end of 2000, were the Banks and Trust Companies Regulation Act, 2000 and the Central Bank of the Bahamas Act, 2000. The former enhanced the role of the Central Bank’s Governor; expanded the licensing criteria for banks and trust companies; provided enhanced supervisory powers for the Inspector of Banks and Trust Companies; provided for cross-border supervision by foreign regulators; and increased the number of expressed exceptions to the statutory duty of bank confidentiality. The Central Bank Act provided for improved supervision, including an appropriate level of on-site inspection of banks, full cooperation on cross-border supervision of banks, and enhanced cooperation between the Central Bank and overseas regulatory authorities; provided extensive information gathering powers for the Central Bank; and provided additional expressed exceptions to the duty of confidentiality upon the Central Bank.
It is essential that The Bahamas cooperates with all who seek to fight money laundering, fraud and other serious crimes. “We must be wedded to the belief that persons and entities have a right to privacy and confidentiality with respect to the conduct of their affairs”, said Prime Minister Ingraham. With specific regard to OECD initiatives on harmful tax competition, The Bahamas must ensure that this right to privacy and confidentiality may be only be successfully questioned in the observance of an agreement which commits all OECD jurisdictions, and all those non-OECD jurisdictions not subject to OECD-threatened sanctions, to exactly the same conditions and obligations. Further, such conditions must be consistent with the laws of The Bahamas.