Mr. Evans McNiel Rogers and Mrs. Cora Richardson-Hodge
The main focus of the Anguilla Government’s press conference on Tuesday afternoon, November 10, was the Banking Bill designed to give the Eastern Caribbean Central Bank greater control of the indigenous commercial banks in Anguilla and the other member territories.
Media representatives were hinted by the Chief Minister as to why the Government attempted to give the first reading to the Banking Bill. He indicated that the move was to enable the Anguilla Government to move swiftly, if necessary, to pass the legislation to effect a resolution of the banking crisis acceptable to the UK Government, rather than the UK imposing a solution.
Mrs. Cora Richardson-Hodge, Minister of Home Affairs, was asked by Chief Minister and Minister of Finance, Mr. Victor Banks, to lead the discussion on the issue and other related matters. She began by giving a background outline about what she saw as the UK Government’s intentions. She referred to the Draft Order in Council given to her by Mr. Tim Colley, Deputy Director of the Overseas Territories Directorate in London.
“That Draft Order in Council had provisions in it where they would appoint a Financial Adviser here in Anguilla,” she stated. “It also had a number of provisions identical to the Turks and Caicos Constitution. What I was beginning to see was a similarity between what happened in the Turks and Caicos, in terms of what the UK Government was implementing and what they are seeking to do in Anguilla. At the same time, in Executive Council, the members of this Government were presented with four pieces of legislation that we were requested to sign off on. They were the Financial Services – an amendment; an Insolvency Act; a Banking Resolution Act; and a Banking and Trust Companies Act. These Acts were presented to us by the Attorney General…What those Acts collectively did was to take the control of the governing of the two indigenous banks from under ECCB and place them under the control of the Governor through the Anguilla Financial Services [Commission]. What that means is that if those Acts were passed, it would essentially mean that ECCB would no longer be our regulator, but the Financial Services Commission would be our regulator.”
She said the four pieces of legislation were presented to the Government about four weeks ago – in Executive Council – to approve. The Minister continued: “Suffice it to say we have not approved or agreed to any such legislation; but the important thing is that those documents are saying to us – the UK Government is interested in regulating our indigenous banks.” She recalled that in 2010 the Financial Services Commission in the Turks and Caicos closed down a bank – a Turks and Caicos Bank – partly owned by a number of banks in the region, which she named. Available information states that the bank was closed down after “it suffered a significant number of withdrawals of funds which left the bank unable to operate normally and meet its obligations on a timely basis”.
She said another TCI bank was also closed to protect depositors. “Looking at the closure of these two banks by the Financial Services Commission, which is controlled by the UK Government, through the Governor, it is clear that what is happening in the Turks and Caicos could very well happen in Anguilla,” she opined.
The Minister continued: “Match that against the ECCB’s Banking Act which Mr. Hughes signed off or agreed to in February 2015. I have also looked at the ECCB’s Banking Act and there are some provisions in that Act that I don’t like. In fact, initially when it came out I looked at it – I put it aside because I said I don’t like what it is saying. But having gone through it… and having seen the Draft Order in Council, and having seen the draft pieces of legislation that we are being requested to sign off on, really and truly we are in a difficult situation. We are in a situation where we are really between the devil and the deep blue sea – if I might [use] that phrase.
“What that means is that you have the ECCB Banking Act which has stringent provisions which take the control of licensing of our local banks from the hands of the Chief Minister and put in the hands of the regulator in the Central Bank…They can decide when they open or close a bank; they have much wider powers and there are a number of other things they can do under the law.
“The difficulty is that the ECCB Banking Act is a piece of legislation that is a unified [Act] that applies to all of the territories the same way. So any changes that would be made to the ECCB Banking Act would have to be done in agreement with all the other territories that are part of the Eastern Caribbean Currency Union. When we do our consultations, and when the comments and concerns come, they would have to be taken to the Central Bank and all the members of the Monetary Council would have to agree to the Act being amended.”
The Minister of Home Affairs further said: “We are here today because, in the short term, from my understanding of what the Chief Minister has indicated,…there is an urgent need to move forward. This is because the UK Government has indicated that if we do not move forward on a resolution then they are prepared to make a decision for us…The elected representatives of the Anguilla Government are of the view that we would like Anguilla to be in a position similar to the BVI where the BVI regulate their own banks and it is somewhere [like that] we want to go. The difficulty is that we are now in trying times where the banks are in conservatorship as a result of our previous Government deciding to ask the Central Bank to come in. I am not making a comment as to whether or not it was good or bad. In my view, it has allowed the banks to remain where they are for two years and so there are some good points and bad points.
“The point is that the banks are still operating. What I gathered from the people of Anguilla is that they would like to see the indigenous banks continue to remain opened. What that means is that if we sign off on the ECCB Banking Act, then the Central Bank would assume the control as set out in the Banking Act; but we would have an indigenous bank that comes out of the resolution. The recent resolution that they have come up with has indicated that they are willing, and are able, to secure deposits up to four million dollars in each account. This was initially up to two hundred thousand dollars per account. The capitalisation for the bank would be forty-five million dollars as opposed to sixty to seventy million dollars per year you would have seen in a letter which came to the Chief Minister from the UK. It is a one off figure of 45 million dollars…and it would be a loan from the CDB.”
She said the situation was at a stage where the people of Anguilla were now to make a decision. “Do we want to go under the ECCB, for however long, because under the Central Bank we can always decide at some point in time that we can leave and become our own regulator… That is one option. The other option is to leave the banks as is and allow the UK Government [through] the Financial Services Commission, by an Order in Council, or otherwise, to assume control of our indigenous banks.”
Mrs. Richardson Hodge added: “We need the people of Anguilla to be fully on board. We need to hear the views of the people of Anguilla and if at the end of the day we decide collectively – the majority of the people of Anguilla [decide that we] do not mind the Financial Services Commission and the UK Government assuming control of our banks, then so be it. My view is I think we should save our banks…If the banks close today each depositor would get three hundred EC dollars per account… The proposal of the Central Bank is to protect up to four million dollars, so there is a big difference going the ECCB way and allowing our banks to close at this point in time.”
Chief Minister Banks said his Government was being faced by a set of emergency British legislation “in case things don’t happen in a reasonable period, to be passed in the House of Assembly in one day or by Order in Council,” he said at the press conference. “This is the option that is open to us, and if you think you need to be concerned about what is in the Banking Bill or the Asset Management Company Bill, you would be scared out of your wits if you see what the options are by that imposition.”
“The Chief Minister continued: “I was told that if the Government of Anguilla does not arrive at a solution – by mid-autumn apparently between the 15th of November and the end of November – that fits our issues, and one that is affordable, and make a case to the British Government, then the British Government has indicated that they would use the nuclear option of making a decision for us. That is where we are.”
He denied he was going to pass the Banking Bill at one sitting of the House and intended to proceed with the second and third readings on the same day. “Why it was important to move forward with the first [reading] is simply because it is not good practice to have three readings in one day,” he explained. “If for whatever reason it is necessary for us to move swiftly to pass the Banking Bill to effect the resolution that we believe will be accepted by the British Government, as a viable resolution, we would need to know that we have put down our marker and we can come back to the House at another sitting and pass the Bill. That is my position. That is our position. That is our strategy.”
