This was according to former Central Bank governor and former minister of finance Sir William Allen.
Sir William defended the move by the former government to make such laws as the one that saved the nation’s reputation in the global financial-services sector, because many companies did not want to do business with any country that was blacklisted.
Sir William and current Central Bank Governor Julian Francis, and the bank’s first governor, T. Baswell Donaldson, were guests on the radio show Parliament Street on Sunday.
Show host Fayne Thompson asked whether the country went too far in passing such legislation, to which Mr. Donaldson responded: ” The question of whether we’ve gone too far depends on who’s looking at it. How far is too far? When you look at regulations and regulators, they are put in to place to protect the reputational risk of a country and to protect the country’s integrity as a whole.”
He said there are minorities whose interest may have been affected by the law, but they have a right to challenge the decision through the legal system.
“But I think any government worth its sword has the right to pass legislation which it feels, having been given a mandate by the people, to do something or some things which are in the best interest of the people as a whole.”
Sir William said he rejects the notion the banking system has suffered a loss of some 20 per cent as a result of the legislation and said if it were not put in place, the nation would have lost more than that.
“We would have lost substantially by now and much of that would have the business that you would not want to lose, that you can’t afford to lose.”
He said that one has to recognise that given the world situation in relation to terrorism, financing terrorism, money laundering and other serious crimes with a detrimental impact upon global economies and safety, there has to be a way to establish whether a relationship is being used to jeopardise society.
“That is all the law is seeking to do. One might argue whether this tradeoff between the welfare of the group and the privacy of the individual has gone too far. I don’t think so. I think as society has become more complex, that tradeoff might have to go even a little further for the welfare of society,” Sir William said.
Mr. Thompson asked Sir William whether other professionals in other countries are put in the same situation, and did the government overreact by passing such legislation so soon.
Sir William said that the former government was put in an unfortunate position.
“You might say that the boys with the big stick have wielded it too freely and they have been unfair. But the fact is, they were fully prepared to bring us to our knees. In fact, they had already taken action to do so. We were blacklisted and we knew what that blacklisting meant. The banks were telling us ‘I am not going to be able to operate in a blacklisted country.’ We knew that.”
He said that in 2000, the government recognised the need to have a far more robust system to regulate the financial-services sector because of the heightened level of demands on the sector, and the increase of criminal activity around the world.
Mr. Francis said that institutions such as the Central Bank need to know how to modernise themselves, stay current and have the resources needed to do their jobs.
“That is really the challenge. It is a really demanding task. It does requiring looking very carefully at what it is we’re doing and looking at what our colleague institutions are doing around the world and seeking to be at pace with that.”
Mr. Donaldson said the world and The Bahamas is a different place than when the Central Bank first opened nearly 30 years ago.
He said that as in any dynamic institution, it must adapt.
“I think that the Central Bank has been challenged and has been rising to the challenge in terms of doing what is expected of it as both the Central Bank and a regulatory institution. I think this challenge will continue because things will continue to change. We have no control over that. We have factors going on in the world beyond our control and we will be constantly responding to things out there; if we don’t change, we’re going to get completely left out of the equation,” Mr. Donaldson said.
Sir William said The Bahamas is already integrated into the global economy whether the Free Trade Area of the Americas, World Trade Organisation or the Caribbean Single Market Economy comes into the mix or not.
“That is the nature of our economy. It is very open and we are exposed to the rest of the world economy. So The Bahamas has got to recognize this, and one recognition of this is that we’ve got to do things as good as the rest of the world,” he said.
“We are already integrated in the global economy whether we like it or not.”
By Vanessa Rolle, The Nassau Guardian
