The Tribune

By YOURI KEMP

Tribune Business Reporter

ykemp@tribunemedia.net

A senior Bahamas Financial Services Board (BFSB) chief executive yesterday said she anticipates wide-ranging talks on “overall structural reform” to make the economy more resilient will take place shortly.

Tanya McCartney, the BFSB’s chief executive and executive director, told Tribune Business that such discussions will likely go beyond tax reform and the implications of the G-7’s 15 percent minimum global corporate tax agreement as she hailed the financial services industry’s resilience amid the COVID-19 pandemic.

“The Central Bank’s Quarterly Economic Report (QER) indicated that the overall sector remained relatively stable and we concur with that view. The sector has shown tremendous resilience during this pandemic,” she said in responding to the findings of that document.

The Central Bank report said the financial services industry had lost almost 160 jobs in 2020, with the banking sector suffering multi-billion dollar declines in “balance sheet” and “fiduciary” assets. It added that the “business footprint of the sector remained structurally challenged” with the COVID-19 pandemic adding to the ever-escalating regulatory pressures on the international segment.

However, Ms McCartney said: “The Bahamas is still an attractive IFC (international financial centre). We continue to engage with international advisers and service providers to inform as to why The Bahamas remains a jurisdiction of choice for international financial services.

“In so doing we speak to the progress that we have made to implement global regulatory requirements, we emphasise our strengths as a jurisdiction, which include our location, expertise in trust and fiduciary services as well as our ability to innovate.

“BFSB continues to use multiple channels to promote the jurisdiction, even during the pandemic. We have undertaken a number of marketing and promotion initiatives for the year 2021, and we have several planned for the remainder of the year. BFSB is already looking at marketing and promotion initiatives for 2022.”

Ms McCartney continued: “We concur with the informed outlook and conclusions made by the Central Bank of The Bahamas in its quarterly economic review, which was published last week. The financial sector has been quite resilient in the face of the COVID-19 pandemic with firms leveraging existing contingency/business continuity plans, resulting in relative stability.

“As 2021 progresses, we look forward to engaging with policymakers on the various international initiatives impacting the sector, including but not limited to the proposal for a global minimum corporate tax. We would anticipate that very shortly there will be broad-based engagement with all relevant stakeholders inclusive of, but not limited to BFSB, AIBT (Association of International Banks and Trust Companies) and the Chamber of Commerce on the need for overall structural reform to augment not only the international financial services sector but the economy as a whole to withstand economic shocks and respond to changes in the global regulatory environment.”

Asserting that the Bahamian financial services industry still has a “real opportunity” to “increase competitiveness” as an IFC, Ms McCartney cautioned that this can only be done “provided that key enablers are implemented, refined and leveraged”.

“Industry stakeholders have made recommendations to policymakers through the economic recovery committee (ERC), and a recent industry policy action summit hosted jointly by BFSB and the Ministry of Financial Services, Trade & Industry and Immigration,” she added.

“We have highlighted the opportunities to improve our competitiveness and realise returns from potential growth areas. Ultimately, this has to be driven largely by policy action. BFSB will continue to execute on our primary mandate of promotion of the jurisdiction and advocacy for and on behalf of industry stakeholders.”

Ms McCartney was also optimistic on the value that financial technology (Fintech) can bring to financial services as it allows for “innovation” as opposed to replacing established asset management, trust administration or other traditional services offerings.