The Tribune

The UK's decision to leave the European Union (EU) could have a significant impact on the Bahamas' financial services industry, the Chamber of Commerce's chairman urging this nation to be an "interested observer" of what unfolds.

“I think if we are serious about being an international financial centre, and we are not paying attention to events taking place in Europe, which is the largest base of our private wealth management clientele, then we are naive and we're kidding ourselves,” said Gowon Bowe, who is also a PricewaterhouseCoopers (PwC) Bahamas partner.

In last week's referendum, which saw a 71.8 per cent voter turnout, the British people voted in favoor of leaving the EU, an economic and political partnership involving 28 countries.

“If you ask all of the international bank and trust clients, they're watching it very closely," Mr Bowe said. "The reason being is while we may not have the UK as a major source of clients, the whole turmoil that this is going to cause could have a significant impact to us in our private banking industry.

"We have targeted European clients, whether that was the Swiss clients, whether that was previously the Italian and French clients, and the like. What it was focused on was moving as different events took place.

"As the Italians and French cracked down from a tax perspective, there was greater movement away from those type of clientele. When we think about what the potential is for the referendum results, the questions is what is that going to do for the currency markets?" he added.

"Is that going to have no impact on the US dollar, meaning it will be the British pound and the Euro that will effectively react to the US dollar, or will it be the US dollar reacting to those and becoming more expensive. That could make things like European exports and revenues take a tremendous turn.”

Mr Bowe continued: “One can also look at our banking relationships. The UK is a major correspondent banking environment, which would have been an alternative if we have the continued US de-risking.

"The European Union as a whole has tremendous strength with the UK in it. While we are not of the size and scale to influence their decision, we have to be prepared and understand the fall-out or what will come.

"The stock markets are going to have a field day over the next few days because our trading volumes and potential client losses in terms of those who are in the market could have a knock-on impact, although maybe temporary, in our current wealth management environment. We are what I would call interested observers that need to ready ourselves for every eventuality so we make sure we don't get caught for lack of attention.”