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Barbados’ CLICO moves concern ECCU

Barbados’ CLICO moves concern ECCU


Eastern Caribbean Central Bank (ECCB) Governor Timothy Antoine says monetary authorities in the economic grouping are watching with ‘concern’ moves by the Barbados Government to restructure the failed CLICO enterprise.

The head of the bank governing financial affairs of the eight-member Organization of Eastern Caribbean States (OECS) said, during a lecture presentation in Barbados last week, that along with the Eastern Caribbean Currency Union’s alarm at CLICO-related developments on that island,{{more}} the CARICOM sub-grouping is bothered by the slow pace towards criminal action against that investment company, and the British American Insurance company (BAICO).

Antoine’s remarks came during a feature address at a function Thursday night, marking the 25th anniversary of the Cave Hill School of Business in that management school’s conference room.

Some seven years ago, CLICO and BAICO collapsed, costing millions of dollars in losses to thousands of policyholders and investors, some of whom had placed their life savings and retirement money into the companies.

The newly appointed ECCB Governor did not go into detail about the ECCU concerns with the Barbados move to restructure CLICO into a viable company that can eventually pay off policyholders and investors, but said briefly, “I know Barbados is starting something; we have some concerns; we’ll see how that goes.”

As regards citizens within the ECCU grouping, he said, “I am interested in economic justice for policyholders, to recover as much of their monies as possible.

“I’m not a lawyer; therefore I am not in the justice system criminally… The criminal justice system should deal with the criminal side.”

He added, “But it pains me and others, all of us, who been through this that there is no economic justice, or very little.

“We’ve made some progress with BAICO,” the banker said, indicating that some $100 million has been paid to 80 per cent of the policyholders, “but we still have a lot of people who aren’t paid.”

Antoine said the entire situation, “is very difficult when there is little or no economic justice, and on top of that, these people (CLICO and BAICO directors) are asking for large sums of compensation, asking back for companies.

The topic of Antoine’s lecture was ‘The Economics of Leadership: Keys for 21st Century Leaders’.

Touching on actions of unethical orgnizations, he spoke of a number of failed North American corporations, then zoomed in on the Caribbean with CLICO and BAICO.

“This is a very painful chapter in our history, and seven years on, the kind of hardship and suffering that our policyholders go through. I hear it every day, it really breaks my heart.”

Antoine said, “What is worse, [is that] the perpetrators of this tragedy have not been held accountable criminally or financially, but have the gall to come and ask back for compensation.”

He said these persons are also asking for their companies to be handed back to them.

Following his lecture, the former advisor within the World Bank group and Permanent Secretary in Grenada’s Ministry of Finance told the media that the region is learning from mistakes in financial governance, which allowed the CLICO/BAICO debacle.

“Part of the legacy of this very painful chapter in Caribbean history is ensuring that we have strong integrated regional regulations and supervision of not just our banks, but our non-banks.

“I feel a professional responsibility to work with colleagues around the region to ensure that as far as possible, we minimize the risk of a CLICO/BAICO fallout and disaster ever again by taking steps to strengthen, in this particular instance, insurance regulations supervision across the region.”

He added, “In the ECCU, we are very much on that journey. A number of our countries have passed new insurance laws to strengthen the ability to supervise, but more importantly, we now have a regional insurance law.

“Just as we have a uniform banking act with the Central Bank as the regulator, also [we are] very much promoting a uniform insurance law across the ECCU, and a regional regulator.”

He said that no one country in the ECCU is in a position to deliver the kind of supervisory regulation needed of insurance companies. “And so this new regulator will be for insurance, or insurers, pensions and other non-bank financial institutions.”

In relation to the wider Caribbean, he spoke of ‘colleges of regulators’ across the region, “where we look at systemically financially important institutions, whether they be in banking or in insurance.

“We look to see how they are performing and what regulatory steps may be required to improve their performance, to minimize the risk of that kind of this happening again.

“One of the lessons of CLICO/BAICO is how financially inter-dependent we are. I think we knew we were, but the extent was revealed when we faced this monster, this disaster.”(GA)