Could More Banking Regulations Be on the Way in The Bahamas?

• In the Bahamas, a debate between the ruling Progressive Liberal Party (PLP) and the opposition Free National Movement (FNM) parties has started as a result of different proposals to regulate banks in the country. Banking regulation became a hot topic of political debate after different social groups complained about excessive charges levied by banks to customers.
• FNM leader Michael Pintard seized the moment to say that if his party wins the next election, it will implement sweeping reforms to the banking industry geared towards “making it more cost-efficient … and truly serving Bahamians”. He added that while the FNM will not propose any measure that undermines the viability of the sector, it is concerned about unchecked fee increases that are not related to better service or improved access to financial services.
• The FNM proposes to strengthen the regulatory mandate of the Central Bank to validate fees and streamline banking protocols. The goal would be to lower costs and make the system more inclusive and competitive, with the entry of qualified Bahamians seeking commercial banking licenses.
• Pintard also said that banks should expand their presence in the Family Islands, which are currently underserved. However, some members of PM Philip Davis’ administration have expressed similar concerns, especially Foreign Affairs Minister Fred Mitchell who suggested more government regulation.
• Bahamas Clearing Banks Association (and Fidelity Bank chairman) Gowon Bowe reacted by saying that regulating bank fees “is a slippery slope … the country would be moving towards communism”. He suggested that any serious banking reform proposal should require a prior empirical analysis to assess the impact of the changes. Last year, Central Bank Governor John Rolle said that capping fees would create problems if the structural problems of the banking system were not tackled first.

(Source: Oppenheimer)