Antigua Observer:-International Banker and Jamaican Senator, Aubyn Hill has made a case for remedying the dismal losses of the Eastern Caribbean Central Bank (ECCB), urging it to encourage commercial banks to lend in the wider Caricom and Caribbean Forum (CARIFORUM) states.
He contends that the performance of the ECCB, indicative of the performance of regional banks, means the lending market in the Eastern Caribbean Currency Union (ECCU) is contracting.
“If you look at how banks grow, many grow by taking very careful steps overseas. Many Trinidadian banks have done that. I see (banks) doing that from Jamaica. It might be time for the central bank to allow local banks – especially the strong ones – to maybe broaden their lending market,” he said.
He charged that the market that the ECCU lending market was “shrinking rather than growing”. Hill’s suggestion was sparked by the recent report that the ECCB made another loss of EC $10 million in the last fiscal year.
The Jamaican senator was speaking on this week’s Big Issues programme along with Dominica-based economist, McCarthy Marie, who countered that overstepping the boundaries of the present lending market “incurs greater risk”.
He pointed to an example of a Dominican bank that reported a loss within the last year and cited a poor overseas investment as the cause.
At the same time, Hill maintained his position saying that there is less risk within the wider Caribbean but excluding the global market.
“Overseas cannot be defined as lending to Bulgaria or going and taking on Argentina’s risk … Overseas in my view is expanding gingerly to one or two of the better economies in Caricom or CARIFORUM and the central bank would have to monitor it very tightly,” he advised.
The senator also said that he did not believe the central bank was solely the cause of its losses.
“The central banks are not the ones hired to manage an economy – it’s the government. The central bank has an important role in managing the currency in that economy but it is the government’s policy that hindered growth or is not encouraging growth enough,” he said.