It is anticipated that as a result of the supervisory regime being implemented, there will be a reduction in the number of managed banks operating in The Bahamas. Of the 400+ companies licenced to conduct banking and/or trust business, it is estimated that some 125 operate as brass plates, i.e. with no physical office or employees in country.
Since the enactment of new financial services industry regulations, and the Government’s announced intention not to encourage such operations, some of this number have decided not to remain in The Bahamas. Importantly, however, it is estimated that approximately half of the managed banks will remain and comply with local regulations – effectively establishing a physical presence in The Bahamas and expanding their operations.
A recent interview with Governor Julian Francis of The Central Bank of The Bahamas revealed that there have been no new licences granted for “managed banks” over the last 2 years, and that it has been the Government plan to phase out this category of bank licence in due course. Banks will be able to operate under “management agent” arrangements, but subject to strict conditions relative to management contracts and senior officer staffing, records being maintained in The Bahamas, and physical presence requirements.
Participating on a local radio Talk Show, the Prime Minister of The Bahamas recently confirmed his belief that there will be no net loss of jobs resulting from this initiative but, rather, the creation of new employment. “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 also has stated that in seeking to act prudentially in addressing issues resulting from various international initiatives, the Government took advice from the financial services industry, and most particularly the banking sector.
Central Bank Governor Francis in recent interviews also has projected that some 60 erstwhile-managed banks will be providing jobs in both senior and non-managerial positions. A move in that direction is anticipated to increase the demand for office space. The Governor also has stated his firm belief that The Bahamas is doing the things necessary to ensure that it continues to be seen as a serious jurisdiction, one that is perceived to embody those things that are attractive to legitimate business — businesses which want to be in a mainstream, solid, well-regarded jurisdiction.
Since 1965 (introduction of banking regulation), The Bahamas has had uninterrupted growth and development, underpinned by the commitment of long-term partners. Economic stability and a strong partnership between the government and the constituents of the financial services sector have contributed to this success. The presence of the many international corporate partners in The Bahamas has been credited by the Prime Minister as giving encouragement of a bright and prosperous future for The Bahamas, particularly as a thriving international financial center.