A New Course For Caribbean Banks?

Above: the Eastern Caribbean Central Bank

By the Caribbean Journal staff

There are more than 36 banks listed across the Organization of Eastern Caribbean States region. Each individual holds the responsibility of licensing banks in its respective territory.

But is it time to amalgamate the region’s banks?

That’s the idea put forth by Sir K Dwight Venner, Governor of the Eastern Caribbean Central Bank, who said a strong case could be made for doing so.

“Legally we have forty banks in the OECS and that is to say that because each country licenses banks separately the Bank of Nova Scotia for example which has seven branches in the Eastern Caribbean Currency Union is regarded as seven banks, so we end up with twenty six foreign banks and fourteen local banks,” he said this week. “For a population of six hundred thousand based on all the arithmetic these are too many banks.”

The Eastern Caribbean Monetary Council has examined the possibility of amalgamating the region’s banks, and there is reportedly consensus that “steps must be taken to advance this initiative,” according to the ECCB.

But Venner cautioned that any move toward amalgamation must be “undertaken carefully.”

“Banks are not like supermarkets, if so they could be closed down with impunity,” he said. “Banks hold the deposits of citizens and therefore must be treated differently.  There is also the payment system where cheques are exchanged not only within countries but between currencies and any unraveling of that system could be chaotic so one must proceed in a very measured way and that is what is taking place.”