Former banking execs defend sector’s integrity

An­drea Perez-Sobers
Se­nior Re­porter
an­[email protected]

Two for­mer se­nior bank­ing ex­ec­u­tives are de­fend­ing the in­tegri­ty of Trinidad and To­ba­go’s bank­ing sec­tor, warn­ing that al­le­ga­tions sug­gest­ing crim­i­nal ac­tiv­i­ty is be­ing fa­cil­i­tat­ed through the fi­nan­cial sys­tem could dam­age con­fi­dence in one of the coun­try’s most im­por­tant in­sti­tu­tions.

The com­ments come in the wake of Wednes­day’s par­lia­men­tary de­bate on the ex­ten­sion of the State of Emer­gency (SoE), where At­tor­ney Gen­er­al John Je­re­mie sig­nalled the Gov­ern­ment’s in­ten­tion to in­ten­si­fy its crack­down on or­gan­ised crime and white-col­lar crim­i­nal ac­tiv­i­ty.

Dur­ing his con­tri­bu­tion, Je­re­mie said au­thor­i­ties would pur­sue in­di­vid­u­als who fa­cil­i­tate crim­i­nal en­ter­pris­es re­gard­less of wealth, in­flu­ence, or so­cial stand­ing.

He al­so ref­er­enced the so-called “one per cent,” a term of­ten used in ref­er­ence to mem­bers of the Syr­i­an-Lebanese busi­ness com­mu­ni­ty, stat­ing that those in­volved in crim­i­nal con­duct would face the same treat­ment as gang mem­bers.

In de­fend­ing the AG’s com­ment the fol­low­ing day, Prime Min­is­ter Kam­la Per­sad-Bisses­sar claimed mem­bers of the bank­ing fra­ter­ni­ty were as­sist­ing elite mem­bers of so­ci­ety in fun­nelling for­eign ex­change to for­eign crim­i­nal car­tels.

Ad­dress­ing the claims yes­ter­day, for­mer ANSA Mer­chant Bank man­ag­ing di­rec­tor and Re­pub­lic Bank man­ag­ing di­rec­tor and CEO Robert Le Hunte said the fight against crime is im­por­tant, but cau­tioned against mak­ing state­ments that could un­der­mine con­fi­dence in the bank­ing sys­tem.

“The bank­ing sys­tem is one of the most im­por­tant in­sti­tu­tions in any mod­ern econ­o­my. It fa­cil­i­tates the move­ment of funds, sup­ports com­merce, en­ables in­vest­ment, and, above all, de­pends on pub­lic con­fi­dence,” Le Hunte said.
He not­ed that con­cerns about crim­i­nal ac­tiv­i­ty and the fi­nanc­ing of il­le­gal en­ter­pris­es should be ad­dressed care­ful­ly.

“The Prime Min­is­ter is en­ti­tled to ex­press con­cerns about crim­i­nal ac­tiv­i­ty and the fi­nanc­ing of il­le­gal en­ter­pris­es. How­ev­er, state­ments sug­gest­ing that il­le­gal ac­tiv­i­ties are be­ing fa­cil­i­tat­ed through the bank­ing sys­tem are se­ri­ous and should be made with great care,” he said.

Le Hunte point­ed to the ex­ten­sive reg­u­la­to­ry frame­work gov­ern­ing com­mer­cial banks in T&T.

“Trinidad and To­ba­go’s bank­ing sec­tor is among the most heav­i­ly reg­u­lat­ed sec­tors of the econ­o­my. Com­mer­cial banks op­er­ate un­der ex­ten­sive an­ti-mon­ey laun­der­ing reg­u­la­tions, know-your-cus­tomer re­quire­ments, com­pli­ance pro­ce­dures, and con­tin­u­ous over­sight by the Cen­tral Bank. Over the years, our reg­u­la­to­ry frame­work has been re­viewed favourably by in­ter­na­tion­al in­sti­tu­tions, in­clud­ing the IMF,” he said.

Draw­ing on his ex­pe­ri­ence as a bank­ing ex­ec­u­tive, Le Hunte said the sys­tem con­tains mul­ti­ple lay­ers of safe­guards de­signed to de­tect and pre­vent sus­pi­cious ac­tiv­i­ty.

“Hav­ing served as an ex­ec­u­tive in two ma­jor com­mer­cial banks, I have first­hand knowl­edge of the ex­ten­sive con­trols and safe­guards that ex­ist with­in the sys­tem. While no fi­nan­cial sys­tem is im­mune from crim­i­nal at­tempts at abuse, it would be un­for­tu­nate if state­ments made at the high­est lev­els of Gov­ern­ment cre­ate the im­pres­sion that the bank­ing sec­tor is fa­cil­i­tat­ing wide­spread il­le­gal ac­tiv­i­ty with­out ev­i­dence be­ing pre­sent­ed.”

He warned that such claims could have im­pli­ca­tions be­yond the do­mes­tic bank­ing sec­tor.

“Con­fi­dence in the fi­nan­cial sys­tem is crit­i­cal, not on­ly for do­mes­tic busi­ness ac­tiv­i­ty but al­so for main­tain­ing cor­re­spon­dent bank­ing re­la­tion­ships, which are es­sen­tial for in­ter­na­tion­al trade and fi­nan­cial trans­ac­tions,” he said.

“Across the Caribbean, we have seen the chal­lenges that arise when cor­re­spon­dent bank­ing re­la­tion­ships come un­der pres­sure. T&T has worked hard to main­tain strong re­la­tion­ships, and con­fi­dence in the in­tegri­ty of our fi­nan­cial sys­tem re­mains a crit­i­cal na­tion­al as­set.”

He added that if ev­i­dence ex­ists, it should be placed be­fore the rel­e­vant au­thor­i­ties.

“If the Prime Min­is­ter pos­sess­es cred­i­ble in­for­ma­tion that il­le­gal ac­tiv­i­ties are be­ing con­duct­ed through the bank­ing sys­tem, then the ap­pro­pri­ate re­sponse is to en­sure that the rel­e­vant reg­u­la­to­ry and law en­force­ment au­thor­i­ties in­ves­ti­gate and take ac­tion.”

Le Hunte al­so stressed the im­por­tance of bal­anc­ing crime-fight­ing ef­forts with pro­tect­ing con­fi­dence in na­tion­al in­sti­tu­tions.

“How­ev­er, in the ab­sence of such ev­i­dence, pub­lic state­ments that cast doubt on the in­tegri­ty of the bank­ing sys­tem risk un­der­min­ing con­fi­dence in one of the coun­try’s most im­por­tant eco­nom­ic in­sti­tu­tions.

“The fight against crime is es­sen­tial. Equal­ly es­sen­tial is the pro­tec­tion of con­fi­dence in the in­sti­tu­tions that un­der­pin eco­nom­ic sta­bil­i­ty, in­vest­ment, and growth. As lead­ers, we must en­sure that in ad­dress­ing one chal­lenge, we do not in­ad­ver­tent­ly cre­ate an­oth­er.”

For­mer Sco­tia­bank­TT man­ag­ing di­rec­tor Richard Young al­so de­fend­ed the bank­ing sec­tor’s pro­ce­dures sur­round­ing for­eign ex­change trans­ac­tions.

“As far as I am aware, any cur­ren­cy trans­fers, for­eign cur­ren­cy trans­fers, would have been done un­der prop­er and cor­rect doc­u­men­ta­tion, and the banks would have been sat­is­fied with the bona fides of those trans­ac­tions,” Young out­lined.