Total value of international deposits seems murky
San Francisco, CA -- (SBWIRE) -- 01/18/2013 -- Gaston Brown is leading an opposition movement against the requirement of international banks to hold a percentage of deposits in government bonds. He states that the move could expose banks to more risk to a single operator.
Chairman and Chief Executive Officer of Global Bank of Commerce, Brian Stuart-Young, stated that international banks have to be considerably more wary not to cross lines with domestic currency due to foreign exchange risk.
“The clients that are with the international banks have brought their money into those banks not in EC dollars,” he said. “So if you go and you invest in an EC dollar instrument and… the EC dollar gets devalued, then that would have a risk against the depositors.”
Stuart-Young did admit that devaluation of Eastern Caribbean currency was “unfortunate and unheard of,” he also emphasized the Brown's points must be added to the discussion.
At the Budget Debate in Parliament on Monday, the MP suggested that banks that were offshore and international should be made to invest anywhere between 5% and 10% of their deposits into government bonds. The act would work as a revenue raising measure, according to Browne.
“With US $3 billion in deposits they should be required by legislation to invest a small portion of their deposits here in this country,” Browne said. “It’s important for them too. It’s also a good marketing tool as it shows that they have a stake in the country.”
Financial Services Regulatory Commission CEO John Benjamin stated to the OBSERVER Media that as of the end of 2011, international banks who were registered in Antigua made $1.79 billion in deposits in total. That was nearly a 40% drop compared to what Brown had stated.
“At the moment each offshore bank keeps with the commission US$500,000 as part of its statutory deposits,” Benjamin said.
The chief of the FSRC stated the amount is fixed. He noted that the amount was not tied to any deposits.
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