More should be done to foster the growth of local banking and financial institutions, Exumas and Ragged Island Member of Parliament Chester Cooper said yesterday, decrying the way foreign banks have traditionally been treated more favorably than local institutions.
Cooper, who made the remarks during debate on a compendium of financial sector bills in the House of Assembly, commented on the change made by the Protection of Depositors (Amendment) Bill 2020, that protects through deposit insurance, credit union accounts up to $50,000.
“Under section five of this bill, the inclusion of credit unions is a welcomed addition,” said Cooper.
“This is something that has been called for, for quite some time by the industry, the public and would be celebrated by credit union clients.
“Credit unions are home-grown institutions that deserve a level playing field to compete in The Bahamas.”
Cooper insisted that more must be done to grow locally-owned financial institutions, as this will domicile wealth in the country, unlike foreign banks that export their profits. He said if institutions like credit unions were afforded a level playing field, their chances for growth could increase.
“We often roll out the red carpet to the foreign banks, allow them to export profits, then wring our hands when they move their head offices, increase fees and hold back on lending domestically,” Cooper said.
“The big banks want to do business in The Bahamas without adapting to the culture and archipelagic nature of this country. We have seen mass and heartless branch closures in the Family Islands, leaving some islands like Long Island bank-less.
“If credit unions are given a chance to compete, we could capture more of the wealth in this sector domestically. We support the expansion of the banking industry to include more Bahamian owned and regional banks.”
He added that the inclusion of more regionally domiciled banks would also galvanize local ownership in the sector, guard the country from shocks and foster greater commerce.
“I would ideally like to see Bahamian and regional players as the buyers of bank portfolios that become available in The Bahamas for both domestic and international banks,” Cooper said.
“We have successfully transitioned the insurance sector to almost full Bahamian ownership. We can and must ultimately do likewise in banking.”