Up Front
Banks Steady, Co's Down
There issome good news to refute alarms about banks leaving this jurisdiction.This is borne out by the figures available to date from the CaymanIslands Monetary Authority (CIMA), the regulatory body chargedwith the responsibility of overseeing Cayman's still much respectedoffshore financial centre.
Following up on some reports that quitea few banks are making their departure, Cayman Net News contactedCIMA and was supplied with the most up-to-date details on thenumber of banks and trust companies licensed to do business inthe Cayman Islands.
There were 31 Category "A" Banksat the end of December 2000 and that figure remains the same asof the 27 June 2001. "B" Class banks number 409 today,a mere drop of 26 from the last December figure of 433 and therewas a loss of only one Trust Licence, from 116 to 115.
Mrs. Anna McLean of that Authority confirmedthat while there has been an actual reduction in the number oflicensees: "this is a reflection of the global markets wherefinancial institutions are merging for greater synergies."
"This results in the consolidationof banking activities of financial groups worldwide as the numberof players in the market are reduced" the CIMA response concluded.
One financial analyst, who requested notto be quoted directly for this report, when contacted for a commentsaid: " With the further drop of another quarter of one percent,with possibly of more to come in the prime lending rate in NewYork and the fact that the Cayman Islands has been removed fromthe FATF's blacklist, it is a given that we will see an increasein more sound financial operations being relocated here, becausethey will not be under heavy scrutiny as they may have been before"
Further good news for the players in thelocal financial industry is that the Immigration Board under theChairmanship of Mrs. Sherri Booden-Cowan, herself an Attorney-at-Law,is pressing ahead with their proposal to formalize a BusinessStaffing Plan, whereby businesses who have filed such plans withthe Board, will be able to get much faster responses inas little as ten days has been suggested - to their applicationsfor support staff.
Cayman's financial industry has always hadthe support of Cayman's Immigration authorities, when it comesto the acquisition of staff on Work Permits, as it is recognizedthat this very important pillar of the economy must have as littleas possible hindrance of their business operations
Some of these entities, besides grantingseveral scholarships annually, are also now allowing a significantnumber of their local staff time off for studies at the CommunityCollege, so that they will become certified to undertake seniorresponsibilities demanded for compliance and continued good orderin Cayman's the financial community.
Meanwhile at the Companies Registry, therehad been a significant drop of 33 percent in incorporations forthe first quarter of this year. However, it was learnt that themonth of May has seen a resuscitation of new registrations. Shouldthis trend should continue, the second quarter for this year willmost likely experience a reduction of the previously anticipatedshortfall.
It is also known that with the "waitand see" attitude adopted by many investors who already havefunds here, is the reason for the present slump in real estateactivity.
With the Residences at the Ritz Carton slatedto go up vertically in about ten weeks, and the Dart billion dollarproject waiting to take off as soon as it clears the hurdle ofan appeal by the National Trust and businessman Billy Adam, itis expected that another round of construction activity will re-startin another twelve to fourteen weeks.
With renewed confidence in the Cayman Islandsfollowing several months of "waiting to see what happens"by investors and their local financial advisers, there is nowevery indication that the financial sector will continue to holdsteady and there will be a resurgence of offshore business pickingup with the now dormant real estate industry benefitingfrom the expected new business on the way.