Despite being a service-based economy in a very competitive world, The Bahamas is and for the foreseeable future, will remain strong in private banking.
This, according to Financial Services & Investment Minister, Allyson Maynard-Gibson who affirmed that The Bahamas will succeed in two major sectors of the economy which include tourism and financial services.
Minister Maynard-Gibson was addressing the members and guests of the Bahamas Institute of Chartered Accountants (BICA), annual ‘Accountants Week’ held at the Wyndham Nassau Resort, Cable Beach.
In her address on Friday, she said that by recognising, embracing and nurturing what she described as two simple operation principles – that of providing value for money and top quality service, The Bahamas will be well on its way to success.
Making it clear that The Bahamas is a financial services centre and not an offshore financial centre, Minister Maynard-Gibson said the distinction is crucial as “the financial services sector’s main goals are to sustain a successful, blue-chip, well-regulated, co-operative financial centre that desires to expand and diversify the economy.”
The Financial Services Minister said that the public and private sectors as well as the financial sector, wish to be seen as competitive going head-to-head with financial services in countries like London, New York, Singapore and Switzerland.
Furthermore, she said in a global environment where OECD countries are pursuing ways to remove trade barriers, The Bahamas should welcome the opportunity to compete along side them on what she called, ‘a level playing field’.
“In my consultations, the private sector told me that The Bahamas is and for the foreseeable future will remain strong in private banking,” Minister Maynard Gibson said. “However, the realities facing OECD nations relating to their tax base and the realities facing the world financial system that can only be strong if all participants join the fight against money laundering and terrorist financing, means that the way that private banking has been conducted in the past, will rapidly change all over the world.”
She said that while most developed systems respect privacy, there is also a certain anticipation of transparency in the mode of operations and a way in which persons who seek to abuse the system can be prevented, quickly detected and quickly punished.
For this reason, Minister Maynard-Gibson said new legislation will be tabled to ensure that The Bahamas is provided with new and better services and products such as e-commerce, captive insurance, foundations, protected cell companies, pensions legislation (domestic and external), aircraft registry and arbitration centre.
Asking the members of BICA what is expected of them in a 21st century Bahamas, Minister Maynard-Gibson said their personal attributes should include insight, good professional judgement, project management, skills, integrity and ethics. Likewise, leadership qualities should include strategic thinking, planning and a cross-functional perspective.
The areas of their profession, which the minister stated should be focused and refocused on, are firstly, commerce and industry. She said with industry chiefs around the world worried about the skills of their financial managers to adapt to a changing global environment, accountants working in commerce and industry now have the opportunity to become the key source of business advice within their various organisations.
Encouraging those present, the minister said in order for them to become successful in this challenge, they will need to diversify their skill base beyond traditional financial analysis into areas like technology, non-financial performance measurement and general management.
Another area of focus the Minister said is on electronic commerce. She noted that today’s developments in e-commerce has and continues to pose a big challenge to traditional business systems and the accountants that assist them. Moreover, she said the Internet would play a vital role in the dissemination of business and financial information as it removes the international barriers on information and brings an expectation of up-to-date information and timely reporting.
“E-commerce will change forever the way accountants work,” the minister said. “Very clearly, accountants will also have to become more active players, perhaps pursuing more skills in non-traditional areas…in more developed countries, accountants regularly participate in a number of these areas in preparation for changes anticipated in the world economy. In my view, Bahamian accountants are quite capable of accepting this challenge.”
Thirdly, Minister Maynard-Gibson said the role of the professional association as the future role of the accountant changes. According to the minister, there will be changes in the role of the professional association in servicing its members.
She advised that this issue would have to be influenced and facilitated by the association members in order to meet the demands of the market through continuing development programmes such as professional development on-line.
Additionally, the minister said the role of the professional association is so vital especially when those in the accounting profession and indeed the world financial system was dismayed by the Enron, Arthur Andersen and then WorldCom sagas.
“We rely on accountants to ensure compliance with corporate disclosure rules, the effectiveness of various securities laws and the responsibilities and accountability of boards of directors and audit committees,” she said. “A sound global financial architecture depends upon an independent, competent and ethical accounting profession supported by the highest professional standards of all involved, an effective regulatory framework, and strong corporate governance.”
She said that regulation of the sector must remain strong and become more transparent. Currently, there are four primary regulators – Central Bank, Securities Commission, Registrar of Insurance and Inspector of Financial Services & Investors; and one supervisory body – the Compliance Commission.
Stating that there have been complaints about a lack of conformity among the regulators, the Minister said this has resulted in red tape, unnecessary expenses and inconvenience. To combat this, the regulators have executed a ‘Memorandum of Understanding’.
The memorandum enables coordination with an on-site inspection with single team of regulators conducting inspections rather than separate teams following each other. There is also an acceptance of due diligence competed by other regulatory bodies.
The acceptance by one regulator that other regulators will accept an investor or subject of its jurisdiction as a fit and proper person, in the normal course of events. The minister said if an application requires the attention of several other regulators, common information requirements once accepted by the lead regulator, will be accepted by all and only additional information specific to the other regulator will be required from the other regulator.
“Long term sustainability of the industry means that The Bahamas is prepared to deliver internationally accepted standards of service and internationally accepted levels of productivity,” she said. “We recognise that today’s realities require high quality, common standards of global application to ensure comparability of financial information around the world.”
By Lisa Albury, The Nassau Guardian
