It comes as no surprise that Moody's Investors Service has
slashed its rating of the Caribbean Development Bank (CDB) from AAA
to AA1 and Standard & Poor's has issued warnings of growing
debt concerns in the Caribbean region.
What is surprising is that this rating was not lower given the
sovereign debt and economic performance issues in the region
following the collapse of Stanford's empire, IMF country
management and the on-going spectre of more expropriation of
The financial ministers of Antigua & Barbuda would like to
pretend that this is an external matter that will have little
consequence. The reality, however, will undoubtedly be reflected in
higher borrowing costs for any development in Antigua and the wider
Caribbean region, with greater risk adversity and increased
Whilst Antigua & Barbuda has never had a credit rating of
its own, because its lacks the political will and declines the
light of scrutiny on its financial affairs, Moody's action
signals a growing impatience amongst investors to tolerate risk
without transparency and adherence to accepted good international
In fact, it is precisely reasons such as Antigua's serious
shortcomings that negatively influence the confidence of depositors
and investors in the Caribbean Development Bank itself, resulting
in reduced capital to lend to these higher risk zones and
The spiral, if unchecked, becomes self-perpetuating
Dr Warren Smith, President of the Caribbean Development Bank
informed his board of governors that the downgrade was not
surprising in today's "environment of
Adding, "We are undertaking an in depth examination of our
risk management framework and we will implement appropriate
recommendations as we build resilience to the more dangerous world
which we now occupy."
Time will tell if the officers of CDB will make Antigua's
future access to capital more contingent on economic prudence and
adherence to constitutional commitment, in order to ensure its own
survival and ability to lend to the other, more responsible nations
in the Caribbean.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
The Miami-based Offshore Alert Conference has become a regular draw for representatives of Cayman’s financial services industry in recent years, and this year’s event is no exception with the Cayman Islands lending strong support through the provision of speakers from both the financial services industry and Government’s Ministry for Financial Services.
The Organisation for Economic Co-operation and Development recently published a report in which the Cayman Islands was commended for the "streamlined, efficient and responsive procedures it has is in place to facilitate the exchange of information for tax purposes".
On 1st April the new UK "Twin Peaks" regulatory regime was launched. The much criticised FSA was replaced with the Financial Conduct Authority ("FCA") and the Prudential Regulatory Authority ("PRA"). Martin Wheatley, the FCA’s chief executive has publicly criticised the approach of the former FSA as "robotic" and a more challenging UK regulatory climate is widely anticipated.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”