T&T: What will Caricom do without T&T?

Loans of hundreds of millions of dollars to Caricom governments are the real reason for the recent tightness of foreign exchange in the banking system

This was confirmed yesterday by president of the Bankers Association, Richard Young, who said Trinidad and Tobago's financial sector had emerged as the place to raise large sums of capital in the Caribbean.

Young said: "Oh there is no question that the recent tightness in the availability of foreign exchange has been caused by loans to Caribbean governments and also large borrowing by some regional business."

Young said last year alone half a billion US dollars was loaned to Caricom governments and regional businesses.

He said: "While I have no independent way of knowing, I trust what the Central Bank Governor has said. And, he has indicated to us that of the $700 million loaned last year by private commercial banks, $500 million was loaned to regional governments or businesses and I am talking about US dollars here."
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Young said: "The reality is that over the last four years, this country has certainly emerged as the financial centre of the Caribbean and, as the financial centre, one has little leeway in discriminating on who loans are made to. One simply has to judge each application based on the bank's policies and the strength of the application process. So, you cannot say we will only lend to businesses operating in Trinidad and Tobago or not to particular governments unless you can show that there is an undue risk. So this is simply part of growth and becoming the place to do business in the Caribbean."

He added that Trinidad and Tobago has been particularly attractive because of the ready availability of foreign exchange, unlike the situation in many other regional economies.