The Rt. Hon. Hubert A. Ingraham
Prime Minister of The Bahamas

Presenting remarks at the Official Launch of the Royal Bank of Canada Trust Company’s US Private Wealth Group service in The Bahamas on June 7th, Prime Minister the Rt. Hon. Hubert A. Ingraham said such events serve to *”ignite enthusiasm and spark energy in the financial services sector and in the country as a whole.”*

The Prime Minister pointed out that financial services remains the second most important pillar of the Bahamian economy, with some 400 licenced banks and trust companies. These institutions, representing many of the world’s best-known and respected financial institutions, offer a wide range of banking, trust and administrative services to private individuals, corporations, investment managers and fund sponsors, from The Bahamas.

The financial services sector accounts, directly and indirectly, for the lucrative engagement of some of The Bahamas’ best trained professionals, said the Prime Minister, indicating that the Government not only shares the industry’s interest in the preservation, growth and development of this sector, but also seeks to facilitate its operations and maintain its integrity.

Prime Minister Ingraham emphasised that it was interest in the development and promotion of the financial services sector that led, especially during the last decade, to the updating and refining of the nation’s financial services legislation. *”We have sought to make, and keep, the sector internationally competitive; to make adjustments as appropriate; and to retain the efficient and effective services expected by our clientele,”* he said.

According to the Government Leader, the rules changed in the middle of 2000, when the international financial agencies of the G7 countries – the FSF and the FATF, and the OECD – determined that all ‘offshore’ jurisdictions engaged in the delivery of international financial services would be required to observe new standards and practices designed by them.

In order for The Bahamas to survive and prosper as an international financial centre, financial institutions licenced to operate in and from The Bahamas have to be able to conduct banking transactions with institutions in the major financial markets of the world – the United States, Britain, Canada, the European Union and Japan. Failure to respond adequately to the concerns of the G7 agencies was recognised as being – at the least – “reckless”, jeopardising the continued delivery of international financial services from The Bahamas, the employment of thousands of Bahamians engaged in the sector, and the economic spin-off associated with well-paying jobs.

*”Enlightened self-interest determined that we should meet expeditiously internationally recognised standards and practices for the conduct of international financial business. And, this we have done,”* continued the Prime Minister.

Noting that apart from the obvious need to meet the requirements of the FSF, the FATF and the OECD, The Bahamas believes that its laws, its supervision and regulation of financial services ought to be of the highest standard and quality, the Prime Minister stated that *”We have no interest in the operations of less than quality financial institutions. We can conceive of no reason that would excuse institutions operating here meeting the same standards in our country as they are required to maintain in their home jurisdictions.”*

Consequently, great care and attention were given to the exercise of consultation and drafting of new laws and amendments to other laws governing financial services in The Bahamas, during the months leading up to the adoption of the compendium of financial services legislation at the end of last year.

The Central Bank has had its authority strengthened and the new Financial Intelligence Unit has been vested with investigative powers. The new regulations covering enhanced financial reporting requirements, “know your customer” rules, and due diligence, which entered into force at the end of last year, place The Bahamas’ financial sector in an excellent position to attract quality new business, and thereby to ensure future growth and stability.

The Prime Minister noted the importance of dealing with matters for consideration or reconsideration arising from the implementation of any new regime, and the equal importance of dealing with such rationally and in a timely manner. *”The process of review continues, given our determination to be responsive to the changing needs and requirements of our financial institutional licensees, their clients and the international financial community,”* he stated.

Prime Minister Ingraham further reaffirmed the commitment of Government to stay the course with evolving international standards and practices. *”Bahamian licensed financial institutions and their clients may be assured that my Government is resolved to responsibly pursue policies that are in the best interest of the financial services sector and of our country. In this way we are able to ensure an environment in which professionals are comfortable to conduct business; an environment in which accusatory fingers in relation to any illicit activity will not be justifiably directed at either you or us.”*

Confidently maintaining that the financial services legislation, regulation and implementation structures now in place in The Bahamas will ensure a quality financial services sector, the Prime Minister extended appreciation to the Royal Bank for the confidence demonstrated in the financial services sector and in The Bahamas.

Expressing the view that the future of the financial services sector is bright, particularly given the innovative and positive response of financial services partners to the changing international environment, the Prime Minister felt that the challenge to Government is *”to remain focused and responsive to the needs of our major stakeholders in terms of infrastructure, legislation and supervision.”* The challenge to industry might be, he continued, *”to remain at the forefront of developments and to keep those of us in Government informed concerning changes in your sector internationally, to which we will be expected, indeed required, to respond.”*