Snagg: We are in this together, for better or for worse

Chairman of the Financial Services Authority Leon Snagg last week begged members of the St Vincent Building and Loan Association (SVBLA) to support a proposed recapitalization plan, in order to keep the doors of the Association open.{{more}}

As he gave the opening remarks at the 71st annual general meeting of the SVBLA on August 29, at the Methodist Church Hall in Kingstown, Snagg said if the Association were allowed to go down, it could take with it other local financial institutions.

On February 1, 2013, the FSA took over management and control of the SVBLA after a 10-day, $9 million run on the institution. The run followed the publication in the Vincentian newspaper, on January 18, of a letter written by economist Luke Browne, which questioned the management and financial health of the 70-year-old institution.

At the time of the takeover, Snagg said the decision to intervene in the Association was to stem an “imminent collapse” of the building society.

At last week’s AGM, Snagg said while the Association is not yet on “solid ground”, he believed it could be, but it depended on the members.

“It would require your continued, solid commitment and support which would be put to the test once more, this evening and in the coming months,” he said.

“We are in this together, for better or for worse,” he said, to the derisive laughter of those present.

“As it stands now, for better,” he quickly added.

Snagg then shared what he said was a “gut feeling” with members.

“I hold an abiding suspicion, perhaps underpinned with a little degree of logic, that if we allow the Building and Loan Association to go down, the institution will take with it the remainder of the non-banking financial institutions,” he said somberly.

“… if we feel that curently we have a crisis at Building and Loan, that crisis could well metamorphose into a full blown financial catastrophe of untold consequences, coming in the wake of the BAICO, CLICO debacle.

“I do not want to witness another Vincentian losing their hard-earned money. So I ask you to support the recapitalization plan that will be unfolded later on this evening. Let us decide today to keep the doors of the Building and Loan Association open, I beg you. and I thank you in advance,” he said.

Later on in the meeting, after approximately 90 minutes of heated debate on the plan, members voted to support the $39 million recapitalization plan, on the condition that the FSA look at the members’ suggestions in relation to the conversion of delinquent Redeemable Shares into Permanent Shares.