Five Vincentian Economists consulted before sale of NCB

Before deciding to divest the shares of the National Commercial Bank, Prime Minister Dr. Ralph Gonsalves said that he sought the advice of five prominent Vincentian economists.{{more}}

Dr. Gonsalves, speaking at the opening of the now Bank of St. Vincent and the Grenadines’ new headquarters at the Reigate Building in Kingstown, told those who came out to witness the occasion on Sunday, November 13, that he had been advised by Governor of the East Caribbean Central Bank Sir Dwight Venner; former Deputy Governor of the ECCB and current Chairman of the Bank of St. Vincent and the Grenadines Errol Allen; local Director General of Finance and Planning Maurice Edwards; former Chief Executive Officer of the National Commercial Bank Andre Iton, and former fiscal adviser to the government C.I. Martin, whom Dr. Gonsalves claimed was a part of the move to develop a modern, competitive economy for St. Vincent and the Grenadines.

“I always say to the people of St. Vincent and the Grenadines this: I was advised on the necessity and desirability of divestment; not because the bank was weak or failing, but the bank possibly could have ended up with real difficulties, if you had the continuation of the economic crisis which is uncertain; and who I get this advice from? Vincentians.”

“They came to the conclusion that it would be in the interest of financial stability in St. Vincent and the Grenadines and in the Currency Union to strengthen this financial institution.”

“And I said if I was going wrong, I was going wrong with that five.”

The Prime Minister in his address pointed out that he, at some point in his life, had worked with these men both a personal and professional level.

“In any event, we had all sat down together at the Monetary Council in the OECS and we had adopted an eight point growth and stability program as the government pointed out that we must go towards amalgamation of our financial institutions, including the banks….”

According to Dr. Gonsalves, the survival of smaller financial institutions, such as the then National Commercial Bank, would have been difficult to impossible, given the current global situation.

He pointed out that larger institutions had also sought to remain viable by joining with other institutions for survival.

“Barclays had to sell to Canadian Imperial Bank of Commerce in the Caribbean region… interestingly… the chairman of FirstCaribbean said something which is of great interest; he said ‘Given the challenges in the global economy and the knock on effects in the region, FirstCaribbean has to leverage on the strength of its parent institution in Canada.”

“You have to bear in mind that the capital base is still small, and small banks with small capital bases, combined with an international crisis which puts pressure on your liquidity, both of them combined would spell danger for you if you do not reform and if you do not seek to strengthen that small stand alone bank.

Earlier this year, the National Commercial Bank became the Bank of St. Vincent and the Grenadines, when 51 per cent of its assets were sold for EC $42 million to St. Lucian company East Caribbean Financial Holdings Ltd.