Bermuda news: signs of resistance to the Finance Curse?

In Bermuda there are signs that politics may be trying to reassert itself over finance, according to a recent article in the Royal Gazette:

“Bankers have declined an opportunity to reply to an attack by Finance Minister Bob Richards on their lending and interest policies as a drag on Bermuda’s recovery from recession.”

The Minister said that the banks were “at odds with Bermuda’s national economic interests.”

“Mr Richards highlighted that the banking sector provided “ultra-easy” credit during the boom years — but resorted to “debilitating, ultra-cautious lending during economic weakness.”

“We have stated repeatedly that in order for Bermuda to move forward, all oars must be pulling in the same direction.”

He added: “Attaining such forward momentum is much more difficult to achieve when such an important economic driver as the banking sector is pulling in the wrong direction.”

“Bermuda Bankers’ Association chief Brendan McDonagh, the chairman and CEO of the Bank of Butterfield, refused to comment.”

There is also interesting debate in the comments to this and related articles. For example a commenter called “Buggy FunBunny” asks:

“And how, exactly, does engaging in a race to the bottom, i.e. ceding ever more moolah to faux corporations, help Bermuda?”

For context, Bermuda’s economy has not grown in five years and youth unemployment is at 36 percent. Please see the Tax Justice Network for more analysis of the Finance Curse.

At the same time, the offshore financial sector in Bermuda continues to actively promote itself. At a recent conference a UK expert on trusts told the audience that Bermuda is “well-placed to attract Chinese super-rich”. Meanwhile, an upcoming seminar on compliance will host the former CFO of Enron – who was jailed for six years following Enron’s collapse – as a keynote speaker. Andrew Fastow will “make observations about how the ambiguity and complexity of laws and regulations breeds opportunity for problematic decisions and will discuss what questions corporate directors, management, attorneys, and accountants should ask in order to ensure that their companies not only follow the rules, but uphold the principles behind them.”


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