By NEIL HARTNELL
Tribune Business Editor
The Bahamas must “not cry over spilt milk” due to Julius Baer’s imminent exit, a former attorney general warned yesterday, and should instead focus on remaining “relevant” as a financial centre.
John Delaney, principal of the Delaney Partners law firm, told Tribune Business the jurisdiction needed to make itself “the most desirable place from which to conduct financial services” after Julius Baer announced the closure of its Bahamian business with the loss of 30 jobs.
While the Swiss-headquartered institution’s decision to depart was “not welcome”, Mr Delaney said it was presently unclear whether there was a wider message or “implications” for The Bahamas as an international financial centre (IFC) in its decision.
Rather than dwell on the past, he called on The Bahamas to instead look to the future and ensure its financial services legislative and regulatory framework were aligned with international best practices and standards.
Mr Delaney added that besides continuing to develop its product menu, The Bahamas also needed to embrace Fintech (financial technology), digital assets and blockchain technology to attract “the most modern type of financial services”.
Warning that the jurisdiction had to prioritise remaining “relevant” in a rapidly-evolving global financial services industry, he added that it needed to keep attracting high net worth individuals and companies to domicile in The Bahamas in compliance with recently-passed economic substance legislation and also ensure the judicial system provides swift commercial dispute resolution.
“Rather than cry over spilt milk and what has been lost, we need to be focused on remaining relevant going forward,” Mr Delaney told Tribune Business. “What are we doing to ensure we remain a desirable place from which to do financial services?
“We know there are things we should be looking at, and trying to look at, to ensure we be the most desirable place for financial services. We need to focus on doing those things. We’re constantly looking at legislative reform and it needs to happen.
“We have looked, and still continue to look at, things that make it convenient for high net worth individuals and companies to redomicile in The Bahamas consistent with economic presence. We need to look at the resolution of commercial disputes so that can happen efficiently and in good time. All these things are ingredients that are fairly well-known. They are things we need to continue to focus on and address.”
Julius Baer said the decision to close its Nassau “booking centre” was part of a strategy designed to slash its global cost base by 200 million Swiss francs, and was a “purely commercial decision based on future growth potential” - indicating that it did not see its Bahamas unit generating the profitability it was looking for.
However, Mr Delaney said change was taking place at many levels across the global financial services with the regulatory landscape just one element in this process. Pointing to the disruptive effects of new technology, he added that The Bahamas had little choice but to embrace digital assets such as crypto currencies and related processes such as blockchain.
“We know that the whole space in international financial services is evolving on many levels,” he told Tribune Business. “It’s important that we make sure we are doing what is necessary so that the most modern type of financial services and mechanisms by which they are conducted can be done in this jurisdiction.
“The Bahamas, as an IFC, has to be aligned with international financial systems for things to work. We need to have international access for there be a frictionless transfer of funds. Whatever lessons may come from this [Julius Baer] in due course, we must make sure we are aligned with the international system in terms of standards.”
Describing Julius Baer’s imminent exit as “regrettable”, Mr Delaney added: “A financial centre such as ours would not welcome the news that a player with the brand and status of Julius Baer is exiting.
“I’m sure most in the financial services industry would wish that was not so, that they are staying here, and that there will be more arrivals. It bolsters our brand as an international financial centre to have players of that calibre here.
“To see them go is not a good thing, but at the same time these things happen. Knowing that, and that the space is very dynamic at this time, from the perspective of the financial services industry and the future, the question is: What are we doing to position ourselves to remain relevant as an IFC?” Mr Delaney continued.
“That, at this point, is the most relevant question. Some may go and some may come, but others coming depends on whether we remain convenient and relevant as a jurisdiction from which to conduct international financial services.”