Deputy Prime Minister K Peter Turnquest.
By NEIL HARTNELL
Tribune Business Editor
nhartnell@tribunemedia.net
The deputy prime minister yesterday admitted there may be “some initial contraction” as the Bahamian financial services sector adjusts to its new regulatory regime, but expressed confidence it will ultimately “come back stronger”.
KP Turnquest told Tribune Business there would inevitably be some shake-out as the industry adapts to the “economic substance” requirements imposed by the European Union (EU) and Organisation for Economic Co-Operation and Development (OECD), and the elimination of “ring fencing”, but argued that The Bahamas’ “quality” reputation will see it re-emerge again.
Speaking as the prime minister met with senior EU officials to reaffirm The Bahamas’ intentions to meet its demands, Mr Turnquest voiced optimism that this country was “in good shape” to avoid the 28-nation bloc’s “blacklist” that is due to be announced later this month.
“Our regime is pretty much benchmarked with all jurisdictions of like size and scope, so we believe we will be competitive in our sphere,” Mr Turnquest told this newspaper of the new financial services supervisory framework.
“We anticipate that while we may find some initial contraction, as we always do when there are changes of this nature, at the end of the day clients return to quality and there is no doubt that The Bahamas is a quality jurisdiction. We anticipate we may have a bump in the road, but we expect the industry to come back stronger and adjust to the regulations as required.”
While expressing confidence that The Bahamas has done everything necessary to avoid the EU “blacklist”, Mr Turnquest said: “We had outlined to the EU last year a timeline for implementation of various initiatives and we have met all our targeted deadlines. As far as we’re concerned we’re in good shape. We have addressed all the follow-up questions put to us, and await the final assessment by the EU’s Code of Conduct Group.
“We certainly expect to have a favourable review but, at this stage, it’s in the hands of those who will be the judge, jury and executioner. We’ve certainly complied with all the standards, the supporting paper that was presented to us, and believe we have done enough.”
Dr Hubert Minnis, together with Carl Bethel QC, the attorney general, met in Brussels with top EU officials to press the case for this nation to avoid any “blacklist”.
Yesterday’s meeting saw the Bahamian delegation meet with Stephen Quest, director-general of the directorate generale for taxation and Customs union. Many in the financial services industry, though, are still trying to interpret what Dr Minnis’ trip to Brussels means and if it represented a last-ditch effort to persuade the EU not to include The Bahamas on its “blacklist”.
A government source, though, said the prime minister’s presence was intended to show the EU that The Bahamas “takes this very seriously at the highest level”, and is putting major weight behind its compliance.
Comments
ThisIsOurs 5 years, 3 months ago
We started bleeding accounts in the offshore industry after the 2008 financial crash and it's never stopped, why he believes were going to "rebound" quickly from another nail in the coffin, only God one knows
Well_mudda_take_sic 5 years, 3 months ago
Here we have one of our most untruthful politicians at it again....LMAO
DWW 5 years, 3 months ago
Is he blind or just low mental acuity?
DWW 5 years, 3 months ago
27 bloc
TalRussell 5 years, 3 months ago
Yes, or no comrade KP, the 1970's operate out briefcase with corporate shingle nailed front building Sir Stafford's Bay Street law offices building ain't about do comeback.
BahamaPundit 5 years, 3 months ago
The key is sovereignty. The Bahamas has completely lost its sovereignty with financial services. Unless and until it can regain its sovereignty, its brand is dirt in the international market. Financial services look for either small regimes with strong sovereignty or colonies attached to powerful countries, such as Cayman. The Bahamas is now piggy in the middle, and "luke warm" is never a strong selling point. Either the Bahams grows some balls or becomes a colony of the US or UK, or it can kiss financial services bye bye.
banker 5 years, 3 months ago
It's the other way around. The Bahamas has stood firm and not adapted and as a result there is massive shrinkage of the financial services. Cayman (which is not a country, but still belongs to Britain), has always done a yes-sir, no-sir, three-bags-full-sir and has always complied (albeit in ways that the OECD and FATF haven't fully liked an appreciated) but they make it work. In December the Cayman parliament enacted a bill for Economic Substance (no implementation yet, they are figuring that out), but they appear to comply, and all the while, diversify their economy into technology. They just had a 4 billion dollar influx with a blockchain startup. The Central Bank would salivate to see $4 billion in cash show up on our shores, It would bolster the reserves like nobody's business. If Kwasi hadn't been such a dumbass and actually established Grand Bahama as a tech hub, that could have been us. Instead, they sittin' on their hands wondering what to do next. The other point that contrasts us to Cayman, is that they see the Economic Substance Act as a business opportunity to grow the economy. If the OECD wants more than a brass plate, how about these companies doing HR in the Cayman, with Cayman staff, as an example. They make lemonade out of lemons, but the bozos in our government is too stupid and uncreative to see that.
BahamaPundit 5 years, 3 months ago
Cayman is still succeeding in offshore finance mainly because it is a colony of a G8 country as I said. You didn't disagree with me. A country either needs big balls or a big brother; The Bahamas has neither.
banker 5 years, 3 months ago
The real problem is that we have done nothing for too long. The most sensible Central Bank Governor that we have ever had, once stated that if we had migrated to commercial or merchant/mercantile banks, our financial services industry would have prospered, mainly because we are not American banks. They would not have been exposed to the toxic asset scandal of 2008. Plus if we had done wealth management on the up and up, there is a huge field of international financing. The wealth under management would contribute to the world economy and hence the Bahamian economy instead of just hiding from the taxman. The reason why we are in this pickle, is that when the wealth management paradigms started showing their face, most Bahamian financial institutions would have had to shed 90% of their business to comply. That would be unpleasant, so they did nothing. The longer that you do nothing, the worse that the problem begins. It was a hard pill to swallow. I guess for their own self interest and preservation, the most logical path was to carry on for as long as possible, and that's what we did. I probably would have done the same thing. But the end of the road is near. As an independent small country with a Black majority, if we grew a pair of balls and told the world to suck it up, well .... we would have had a regime change the way Grenada did. The way I see it, is that the decline of financial services was ultimately inevitable. The criminal Prime Minister Swindling had no ambitions for the Bahamian people other than to enrich himself and build the odd school in the Family Islands in case Jesus came early. It is very hard to disrupt oneself when times are good, and not many nations or people can do it. If you do, the prize is prosperity and if you don't, you get mediocrity.
The real showing of Bahamian balls, would have been to see the signs and portents and change before it is too late. That takes true vision, but we are most comfortable with our heads up our azzes and the resultant tunnel vision. Let's face it -- dere een no hope fer us. Eventually I see us swirling into a morass of social disorder as more and more Bahamians cannot live in dignity.
BahamaPundit 5 years, 3 months ago
There is no clear answer how this fiasco could have been avoided. Even Switzerland was caught with its pants down, and they are much more on top of things than us. Even Cayman appears to have its days numbered. The big winners will be places like Delaware, Signapore and London, due to the removal of competing jurisdictions.
bogart 5 years, 3 months ago
"Financial Services To... 'Come Back Stronger'"......after... "some initial contraction".....perfectly plaisible...comes to tink bout it......BUT.... depemds how low you dropping first....years ago country had over 500 Financial Offshore entities....today 200...???....Country had commercial banks....CHASE...CITI...GULF UNION...WORKERS....BARCLAYS....BANK OF MONTREAL....CIBC...RBC...BNS...COMMONWEALTH ...BANK OF THE BAHAMAS.........TODAY......there is CIBC/FCIB....RBC....BNS...COMMONWEALTH ....BANK OF THE BAHAMAS....latter bring govt majoroty owned operating i.competiting in private sector with remaining banks......PLUS we jus know Banking industry shrinks be $200,000,000,000....dats $200 billion plus workforce done conttacts by some...650 jobs....domestic banks asset base falls over 80%...So for it to contract some ...and ...come back stronger is.....(than the lowest point yet to be reached)...is quite possible...AND EVEN IF REBOUND......current lack of investigations...no Financial Ombudsman as checkpoint to correct egregious wrongs...(if a customer is wronged like they needs to.....STILL have money and finds one lawyer who is willing to take dem on)..bank policies using indemnity insiramces...decades old lending ratios...lending close or full price...(equity financing)....is jus a matter of time before hurricane disaster...wiping out island ...bigger disaster....NEED CRITICAL ANALYSIS SOLUTIONS.....not talk bout moving goal posts if hurricane climate change can take goal post one sweep...
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