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Open Letter to Financial Institutions – What is the COVID-19 Plan?

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As the COVID-19 cripples world transportation, many areas will be severely affected…. these include Food, the opportunity to work & earn money, etc…… I would like our PM & her Government to engage the business sector/others and begin planning on methods to reduce the economic impact on the population:

  1. Banks, Credit Unions, etc. to reduce/suspend for a period of time, Loans/Mortgages/etc. payments
  2. Credit Card companies to do similar
  3. Food Importers, Supermarkets, etc. to NOT increase prices

and other transactions/processes that ordinary people have to bear daily. We are not asking to ‘wipe-off’ these agreements ……. just suspend them until (we hope) the virus is under-control and the World begins to get back to normal.

ks, BU commenter

The comment quoted connected with an online article Caribbean Banking Association Says It Can’t Be Business as Usual as Coronavirus Spreads the blogmaster read yesterday. The impact COVID-19 is having on the world spans the gamut – Italy on lock down to other countries  at various stages of executing a containment strategy. Unfortunately it translates to the global economy projected to slip into a ‘recession’. This is not good news for Barbados given the current state of the local economy. There will be some more pain Barbadians have to endure bearing in mind it is a country already suffering from economic fatigue.

Why should the comment by ks be of interest to all of us?

We are observing local financial institutions mobilizing to protect the health of staff and customers. A good thing all agree. What we have not heard so far – is how financial institutions plan to react to rising unemployment because of the economic slowdown. Global commentators are ominously forecasting that this recession will be worse than 2008. How will financial institutions commit to foregoing revenue to support economies like Barbados about to crash and burn?

Many businesses in Barbados are experiencing a significant drop off in sales, especially in the hospitality sector. If Barbados has to move to stage 2 and 3 of the Covod-19 disaster plan the situation will get worse. The ‘haircut’ Barbadians had to suffer  would have been in vain. Barbadian households and businesses will default on loans. The government does not have a Stabilization Fund like Trinidad and Tobago or the capacity to print money for stimulus like the USA.  The greenback is still considered the world’s reserve currency.

The question for the financial institutions in Barbados is –  What is the plan? We are in this together right?

 

 

 

 

 

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315 responses to “Open Letter to Financial Institutions – What is the COVID-19 Plan?”

  1. Mariposa Avatar
    Mariposa

    A few days ago Ralph Gonslaves implemented a plan of zero vat on all household essentials
    Might not seem much but it took some economic pain off the backs of many
    Here in barbados govt only goal has been to look like greedy captalist grabbing at every dollar
    By now given the global economic outlook and the many policies international countries having to resort methods of staving off the virus eg lockdown
    Barbados govt should have plans birthed readily on hand which can be of help to household most vulnerable from sinking further into poverty
    The effect of saving for a rainy day has reached our shores long speeches not going help now

  2. WURA-War-on-U Avatar
    WURA-War-on-U

    That should be the plan, easing INCREASED POVERTY and SUFFERING on the population as a whole.

    not some harebrained nonsensical idea to fill infected hotel rooms with black bodies.

    One way or the next that cycle WILL BE BROKEN.

  3. David Avatar
    David

    Before this topic also goes down the rabbit hole note that ALL economies whether service, commodity or combination are projected to experience recession given the nature of covid-19. The US is whispering about 20% unemployment. This is not to say small island economies like Barbados should not do more to nurture other productive sectors. The only business flourishing in the current environment is the internet and telecoms businesses based on global commentators.

  4. WURA-War-on-U Avatar
    WURA-War-on-U

    You have a UNIQUE SITUATION in Barbados, you cannot compare yourselves with other economies, it will never work…for the simply reason…LACK OF PROACTIVENESS, critical thinking skills and basic intelligence in your leaders.

    How many years have both governments been told that they MUST DIVERSIFY…they ignored every suggestion and not only from bloggers, but from FOREIGN credit rating agencies and everyone else over the years…if they maliciously refused to do it then for selfish reasons…and are still INTELLECTUALLY INCAPABLE…what makes you think they will be able to do it now, when they CANNOT even think straight at this time.

  5. Freedom Crier Avatar
    Freedom Crier

    As a BTW…

    Interferon Alpha 2B, Successful in Treating COVID-19

    This molecule has been used for different purposed against conditions of hepatitis A and B also all kinds of leukemia, dengue, explained the professor in an exclusive interview with teleSUR.

    Published 17 March 2020

    For 40 years, Cuba has been using a molecule named Interferon Alpha 2B , which has successfully been used to combat the new Coonavirus in China and elsewhere.

    “The world has an opportunity to understand that health is not a commercial asset but a basic right,” Cuban doctor Luis Herrera, the creator of the Interferon Alfa 2-B medication, one of the most successful medications in the fight against COVID-19 told teleSUR Tuesday.

    Interferon has been known for more than 40 years: first, it was produced from original sources in local sites, then nationally and later in the United States and even Finland…

    https://www.facebook.com/teleSUREnglish/videos/1107413969608473/

  6. John A Avatar
    John A

    The problem we have is that we live in a country with little financial wriggle room. Trump and places like France can do much to help their people in terms of grants etc, we on the other hand are cash poor and tied in an IMF program.

    What we can do though is assist those that want to start agricultural projects. Government has acres of good arable land in their land bank. We have tractors that can plough and we have a government owned facility that can propagate plants and supply seeds.

    We actually are not as bad as many in terms of feeding ourselves. All that we need is a plan and a proactive approach to get things started.

  7. David Avatar
    David

    @John A

    Your suggestion is understood however the pandemic has created an immediate problem for people outside of your suggestion.

  8. WURA-War-on-U Avatar
    WURA-War-on-U

    Lets not forget that Barbados’ business people have always operated on one business model, outright THIEVERY…OPPRESSION and SUPPRESSION OF THE MASSES……enabled by BOTH governments

    .let’s be pleasantly surprised if they make this an exception to doing the right things .. rather than their rule….now that they are FACING TOTAL and permanent destruction themselves….in this situation they have MORE TO LOSE than anyone else….the poor are already resigned to their manmade poverty and hardships.

  9. Hants Avatar
    Hants

    6 Canadian banks to allow deferral of mortgage payments by 6 months

    CIBC, , , RBC Royal Bank and Scotiabank say their plans will help those effected by the financial consequences of COVID-19.

    https://toronto.citynews.ca/2020/03/18/6-canadian-banks-to-allow-deferral-of-mortgage-payments-by-6-months/

  10. Vincent Codrington Avatar
    Vincent Codrington

    @ John A

    @ David BU

    The GoB has met with the stakeholders and have already put measures, as they perceived them, in place. What about them do you not like?
    Finance is not a solution. It is practical risk management measures that we need. We are in danger of pressing the panic buttons. Please desist.

  11. David Avatar
    David

    @Vincent

    See Hants comment.

  12. Wily Coyote Avatar
    Wily Coyote

    Asking the BANKS for ease in this COVID 19 times mat fall on DEAF EARS. Remember these are the same banks the GOVERNMENT just recently SCREWED with a IMF/BERT PLAN. As the saying goes once bitten twice shy.

    Barbados government and populace are in for a ROUGH RIDE down the cane road in the donkey cart to put it mildly. BERT and existing IMF PLAN is basically off the table,. Remember there are Debt Payment consequences/obligations in the plan that was agreed to by the offshore financiers which are coming DUE. Unforeseen economic downturn is not covered in the agreement, only natural disasters.

    The Financial Hole for Barbados just become bottomless.

  13. whiteHill Avatar
    whiteHill

    @David, unfortunately there will be no magic wand here, what john A has offered should have been in the works for decades by both Governments B and D. Those of us in Barbados with half a brain knew and have been preaching for a very long time; what if something like this virus should come upon us? As one drives around this island it brings a sad sickening feeling to my soul to see so much land given over to the growing of non edible River tamarind and bush, then I go to the grocery stores…the cost of imported fruits and vegetables. Our size does not permit us to compete with others, Christ but it is a start.

  14. David Avatar
    David

    Financial institutions in Barbados are still fuming from the haircut on government securities held delivered by BERT. We will see if the foreign banks share their domestic Covid policy with us.

  15. PoorPeacefulandPolite Avatar
    PoorPeacefulandPolite

    “By the pricking of my thumbs
    Something wicked this way comes” (Wm. Shakespeare – Macbeth)

    There will be winners and losers emerging from this crisis and by far the sector that is certain to be among those winning, is agriculture.

  16. John A Avatar
    John A

    @Wily.

    Agree with you 100% going back to the financial institutions that we just caused to lose millions will not be a workable solution. We must help ourselves out of this one to a large extent.

    My first concern would be to become more self sufficient on food as that is something we can control. We then need to put a freeze on unnecessary spending. In other words no more demolishing buildings to make parks etc. Also has their been a directive given to all ministries to cut back spending by say 10% with the exception of health and agriculture?

    My worry is that based on the estimates there was a $200 billion deficit and that was before the Virus hit. If we don’t cut expenditure significantly and we lose say $200M on budgeted income, we will be running a $400M deficit by year end!

  17. Mariposa Avatar
    Mariposa

    We can start by building a Carribbean based Community dependable on each other resources buying and selling amongst ourselves
    The experiment of having a global community has failed world wide

  18. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU

    I have read Hant’s comment. I am sure the Canadian banks are applying a policy relevant to their situation. This blog is about the Barbadian situation. I am sure that local banks have been forced to apply that and similar solutions since the advent of BERT. No financial institution has to disclose how it deals with their clients who are unable to meet their loan obligations. Each case is dealt with on merit. It is not a public relations exercise.

  19. Vincent Codrington Avatar
    Vincent Codrington

    @ Wily Coyote at 9:24 AM

    Is not Convid-19 a pandemic ? And , therefore , qualifies as a natural/national disaster? I am sure that there was a saving clause somewhere. If not, BE TWIXT, I going to behave like an old hat.

  20. Mariposa Avatar
    Mariposa

    America Treasury to give every adult household 1,000 dollars to stimulate the economy
    Barbados has 1.5 billion in reserves if money is to dolled out it should start at the bottom end of the spectrum where spending begins till it reach the top
    The tourism industry has sucked from govt nipples in good times
    They wouldnt loss much by waiting

  21. John A Avatar
    John A

    @Vincent.

    I don’t think any bank or loan agreement would of thought of a clause that would of dealt with a case like this for default. What has happened in the USA is that Trump stepped in and mandated banks to implement eases in loan collection as he is empowered to do. I see no bank coming forward and “offering” to ease anybody, not those vultures! Does our PM have the power to do the same here? These are the questions we need answers to.

  22. Vincent Codrington Avatar
    Vincent Codrington

    John A

    There are subtle differences between the law and practice of banking between the USA and British Commonwealth countries. Not every law or every practice in the USA is worthy of adoption/emulation. Banking practice is one of them. There is a rule of thumb applied in my early days in the Financial Sector…. “force de majeur”. If a natural or national disaster takes place that affects the borrower then the agreement cannot be enforced. Perhaps we should review the BERT document. I recall such a phrase was included.

    I have already dealt with the personal banking issue. That is my understanding of local banking practice. Banks do not like bad publicity and borrowing and lending is a private undertaking based on trust.

  23. Sargeant Avatar
    Sargeant

    Here we go again appealing to the community spirit of others who will have their focus elsewhere. Of the banks listed one is on the verge of leaving and the other two have signaled that a departure date is on the horizon. At the risk of beating a dead horse the sale of BNB meant we exchanged short term gain for long term pain, we were never masters in our own house but we did gain a foothold in the building now we are back to square one on the outside looking in.

    The PM’s remarks “many hands make light work” are going to be put to the test as those hands in the Min. of Finance are going to have to perform some Houdini type magic to stave off an economic tsunami.

  24. John A Avatar
    John A

    @ Vincent

    We will see what unfolds but remember we will not be the only people beating on their doors both here and abroad begging for an ease. In my view they will ease their biggest and best customers from their major markets first. As far as the foreign banks are concerned, most want out the Caribbean Anyhow. Who knows this may be what it takes to hasten their departure.

  25. Vincent Codrington Avatar
    Vincent Codrington

    @ Sargeant at 10 :49 AM

    The Capitalist System is operating and evolving as it was designed to. Banks have to manage their risks and make profits. They also have to behave in such a way as to not cause collapse of the financial system. Banks enter and leave markets when threats are on the horizon. They left and they returned and they are leaving again. Nothing surprising here.

  26. Freedom Crier Avatar
    Freedom Crier

    CORONAVIRUS WILL BANKRUPT MORE PEOPLE THAN IT KILLS — AND THAT’S THE REAL GLOBAL EMERGENCY

    “Something is really bothering me, kept me awake last night, yes indeed we all have to be careful re the Coronavirus but it’s recover rate is 98% or thereabouts.. old people like me at 76 need to be careful. But what I find truly bothersome…nay worrying … is the rate at which politicians and the powers that be have CLOSED the entire world down!! My God they have invaded our privacy, our homes, our lives everything. Cities and countries are on total lockdown… no travel, no assembling, no work , (those who can MUST work from home) , schools closed … the list goes on and on. Just goes to show the power that these people have, it is terrifying… for God’s sake the mortality rate is 2%… it is not Bubonic plague. May God help us if evil people come into power and decide to close us all down, it is frightening!!! Thank God for Mia who apparently at moment seems to possess a modicum of common sense!”

    WE MAY LOOK BACK ON CORONAVIRUS AS THE MOMENT WHEN THE THREADS THAT HOLD THE GLOBAL ECONOMY TOGETHER CAME UNSTUCK

    Coronavirus’s economic danger is exponentially greater than its health risks to the public. If the virus does directly affect your life, it is most likely to be through stopping you going to work, forcing your employer to make you redundant, or bankrupting your business.

    The trillions of dollars wiped from financial markets this week will be just the beginning, if our governments do not step in.

    Worldwide, Covid-19 could economically cripple millions, especially since the epidemic has formed a perfect storm with stock market crashes, an oil war between Russia and Saudi Arabia, and the spilling over of an actual war in Syria into another potential migrant crisis.

    Just as important as fighting the virus — if not more important is Controlling—our economies against the incoming pandemic of panic. Human suffering can come in the form of illness and death. But it can also be experienced as not being able to pay the bills or losing your home.

    SMALL BUSINESSES IN PARTICULAR ARE STRUGGLING

    All this makes it even more worrying that GOVERNMENTS CONTINUE TO SEE THIS AS A HEALTH CRISIS, NOT AN ECONOMIC ONE. It is time the economists took over from the doctors, before the real pandemic spreads.

    It is difficult to imagine Italy not entering a recession (the world’s ninth largest economy is now on lockdown). It is also difficult to imagine that failing to affect Europe and its largest trading partner, the United States. AND IT IS IMPOSSIBLE TO SEE HOW ANY OF THIS WILL NOT ADD UP TO A GLOBAL DOWNTURN, UNLESS GOVERNMENTS STEP IN FASTER AND HARDER THAN THEY DID 12 YEARS AGO DURING THE LAST FINANCIAL CRISIS.

    THE POINT OF THE MEME IS WHILE WE SHOULD BE CAREFUL IN NOT GETTING THE VIRUS, AS WE SHOULD BE DOUBLY CAREFUL ABOUT THE POWER WE HAVE GIVEN GOVERNMENT TO CONTROL OUR VOLUNTARY ASSOCIATIONS.

    https://www.facebook.com/FrederickDouglassAmericanHero/photos/a.343955075743727/1646539425485279/?type=3&theater

  27. Tron Avatar
    Tron

    @ Wily Coyote March 18, 2020 9:24 AM
    @ John A March 18, 2020 9:43 AM

    Whether force majeure exists depends on the concrete definition. So we would have to see the clauses.

    I stand by my assessment that the government is doing the right thing in the Corona crisis. It is a fact that many territories in the Caribbean have massively sabotaged the return journey of tourists. In future, many tourists will ask themselves whether they will be able to leave the country alive at all when on holiday in Jamaica or Tobago or only in a body bag after six months.

    Barbados manages the crisis completely different. In a few months, scientists will find out that the virus can only spread to a very limited extent at 30 degrees and high humidity. We have gained a lot of trust from European tourism companies during the “Airlift Campaign” this week.

    I must also say quite openly how shocked I am by the insults here on BU. All over the world budgets are now being cut, jobs are being cut, but in Barbados the (former) voters of the DLP are shouting at you as slave driver and racist when you demand that society should adapt to the changed circumstances.

    Has anyone ever reflected on what is happening now with Hyatt, Sandals and the Chinese investments in Barbados? That would be a point of discussion, my dear David.

  28. WURA-War-on-U Avatar
    WURA-War-on-U

    “Remember there are Debt Payment consequences/obligations in the plan that was agreed to by the offshore financiers which are coming DUE. Unforeseen economic downturn is not covered in the agreement, only natural disasters.”

    they are the ones who were uppity and rude using their fake professor, let them eat crow.

    “In future, many tourists will ask themselves whether they will be able to leave the country alive at all when on holiday in Jamaica or Tobago or only in a body bag after six months.”

    the tourist would have gotten home one way or another, with or without Barbados, their governments would not have left them stranded and would have come up with a solution with any country…that is not the point, not even jumping in front to score cheap points is the point…but exposing the people on the island to thousands of potential corona infected tourists for an extended period which is going into the second week….that is the problem, who cares about cheap political points scoring, it still will not get yall anywhere.

    Hyatt…ha, ha

    Sandals…should not even be in Barbados to begin with.

    “At the risk of beating a dead horse the sale of BNB meant we exchanged short term gain for long term pain, we were never masters in our own house but we did gain a foothold in the building now we are back to square one on the outside looking in.”

    you NEVER had leaders with vision, only fast talkers and hustlers…welcome to the pain.

  29. John A Avatar
    John A

    @ Tron

    All over the world jobs and budgets are being cut because anyone can see that revenue to the state will be drastically reduced as a result of a lack of public spending and tourism arrivals.

    To proceed to run on a budget based on the pre corona economy would be no less than economic suicide. If you remember in the estimates in the pre corona economy, we were budgeting a deficit of $200M. If we don’t cut our spending and end up with a $300M short fall on budgeted income where do you think that will leave us?

    When I was at school 200+300=500!

    That would be taking us to where we were in the sinkler years if we do not adjust our spending promptly.

  30. de pedantic Dribbler Avatar
    de pedantic Dribbler

    @Vincent, to your point it would be legal negligence of the most high that contracts of the type u described DID NOT contain “force majeure” clauses .

    That’s essentially a de facto clause in most commercial contracts…because you cannot contract to complete your obligations if there is ‘an unforseeable act of nature (God).

    Of course you can also hedge your bets with an insurance contract but to a variance of @Tron the specifics of that insurance rider would be crucial.

    All in all what the banks suffered as a result of BERT should have not one jot to do with current expectations or strategies.

    If practically the entire nation falls into default on loans and indeed tax obligations then how can a government (of the people) NOT step up and legislate/fiscally engineer a fix!

    We have seen this in several other jurisdictions and our govt has their own tools to use judiciously to save our economy.

  31. John A Avatar
    John A

    @de

    I agree with you that government must step in for example now and formally Instruct commercials banks that foreclosure on properties and vehicles must not be permitted say for the next 90 days.

    Right now every port taxi driver, vender and jet ski operator between the Harbour and Bay Street beach will be sucking salt as we say. The state must step in and protect these people from losing their Taxi or Jet Ski for example, along with other things simply because they can’t make their April or May payment.

  32. Hants Avatar
    Hants

    Canada-U.S. border closing, $82 Billion in direct aid and stimulus coming: Trudeau

  33. Dullard Avatar
    Dullard

    In a few months, scientists will find out that the virus can only spread to a very limited extent at 30 degrees and high humidity.

    Based on what evidence?

    @blogmaster nice job deleting my comments.

  34. David Avatar
    David

    @Dee Word

    The same banks and others will toss about initiatives under the cloak of a commitment to corporate social responsibility? These financial institutions are also stakeholders in the market they make money. What is their responsibility in a market buffeting in the forces of extraordinary times? It cannot be just transactional.

  35. Donna Avatar
    Donna

    John A March 18, 2020 12:08 PM

    @ Tron

    All over the world jobs and budgets are being cut because anyone can see that revenue to the state will be drastically reduced as a result of a lack of public spending and tourism arrivals.

    To proceed to run on a budget based on the pre corona economy would be no less than economic suicide. If you remember in the estimates in the pre corona economy, we were budgeting a deficit of $200M. If we don’t cut our spending and end up with a $300M short fall on budgeted income where do you think that will leave us?

    When I was at school 200+300=500!

    That would be taking us to where we were in the sinkler years if we do not adjust our spending promptly.

    +++++++++++++++++++++++++++++++++++

    Everyone with an iota of common sense expects all of us to make some sacrifices. Tron is only proposing sacrifices for those who can least afford them. This is because he blames only black people/workers for the state of affairs. But the measures he is proposing would send all black people back into slavery where they would have no employment rights whatsoever. However, it is really just a matter of proper application of the existing laws that is required.

    Most cases are fought because correct procedure isn’t followed both in the Civil Service and the private sector. This is what the top union officers have told me and this is what I have observed. When one follows due process one can rid oneself of any employee that deserves it without repercussions. That is also what said union officials told me. One of them also expressed frustration with employers who refused to follow the procedure and thus get rid of the unproductive and difficult employee. In one instance they told one worker that even if due process was not followed they would not be acting on his behalf again. He was later fired and they did not show up.

    https://barbadostoday.bb/2020/03/18/doc-must-compensate-dismissed-employee/“

    Gollop said the tribunal found that Shildene Alleyne, who had worked as a receptionist for family physician Dr Jasmine Crump for some 30 years before being terminated in 2013, was unfairly dismissed.

    The evidence reveals that the employee was never accorded her right under the Employment Rights Act to a fair hearing. The provisions of the Fourth Schedule of the ERA set out the process to be followed in this regard,” he ruled.

    The former employee had been accused by her employer of various acts, including mistreating other staff, being unprofessional and bad-talking her boss, allegations which were denied.

    ++++++++++++++++++++++

    Black people this is time to work for yourselves and make do with whatever you make for a while. One cannot withdraw big time from a business until it is well established and thriving.

    Black people it is all in the mind. That is why my son has already styled himself an entrepreneur and is making money at sixteen years old. He is following his dream and even though at first I was skeptical, when he showed me his work I realized he had something. Then he showed me the money he had made and I eased up off the book stuff and now I am backing him with ALL MY RESOURCES because no parasite is sucking his blood if I can help it.

    Black people arise!

  36. Dullard Avatar
    Dullard

    I stand by my assessment that the government is doing the right thing in the Corona crisis. It is a fact that many territories in the Caribbean have massively sabotaged the return journey of tourists. In future, many tourists will ask themselves whether they will be able to leave the country alive at all when on holiday in Jamaica or Tobago or only in a body bag after six months.

    @ Tron

    You need to stop trolling and insulting the intelligence of the blog.

    Life is about more than rolling out the red carpet for some “tourist”.

    The current approach of the govt is reckless, ill thought and either they tighten up immediately or the island will pay a heavy price via extreme pressure on the health system.

    If tourists have to be inconvenienced so be it. Tough. Aren’t the same tourists being inconvenienced back in their home countries with curfews, lock downs severe movement restrictions?

  37. Donna Avatar
    Donna

    As I said before, this is the time for all of us to take stock of ourselves and dial up a notch or two or three. This is an opportune time to break bad habits and replace them with the new, One such habit would be to exercise more and thereby reduce the budget necessary for the Ministry of Health which is astronomical due to Type 2 diabetes, a controllable lifestyle disease.. That one act would go a long way. It would be even better if we did it in the “ground” than in the gym. That would be doubly beneficial because we would have healthy food to eat and would therefore reduce the budget requirements even further.

    So that would only require a sacrifice of time on social media and in front of the television and according to doctors would make you naturally happier as well. So really it’s no sacrifice at all.

    PS. Sorry David! This should be on the other blog but it just was following on from my comment above..

  38. Dullard Avatar
    Dullard

    They also have to behave in such a way as to not cause collapse of the financial system

    False! Asian crisis late nineties, recent 2007/ 08 financial crisis, Russian rouble crisis, LTCM crisis late…

    Banks behave in a way as to maximise profits. They dont worry about the system. That is the regulators job.

    You view of the financial world is quite quaint.

  39. WURA-War-on-U Avatar
    WURA-War-on-U

    “The current approach of the govt is reckless, ill thought and either they tighten up immediately or the island will pay a heavy price via extreme pressure on the health system.”

    ya forgot the scams, one known undesirable who has a private hospital and at least 3 or 4 private clinics, one at coverley, one at St. James, then there is diagnostic and Bayview already sent out a directive that no corona patients should be turned away, the fix is in, the extortion/contortion/bribery.corruption has already started and ya can guarantee this dishonest government is at the centre, since one of their ministers has shares in one of the clinics, 3% or 5% or some such.

  40. Hal Austin Avatar
    Hal Austin

    Government should introduce an immediate mortgage payment holiday – for a minimum of three months, preferably six months.

  41. de pedantic Dribbler Avatar
    de pedantic Dribbler

    @David, absolutely correct re “… their responsibility in a market buffeting in the forces of extraordinary times […] cannot be just transactional.”

    And in times of national financial crisis the govt ENSURES it isn’t, as @John A and others have said.

    The blogger above said it succintly: “Banks behave in a way as to maximise profits. They dont worry about the system. That is the regulators job.

    My only contrary remark is that a bank can’t take money from a ‘bankrupt’ client… And neither can they deliberately push several clients into bankruptcy all about the same time in order to pick off their assets.

    The market forces – Govt, legal and consumers – would rebel against that.

    Let’s recall the discussion here re COB and their CEO’s alleged acts to deliberately bankrupt a local minibus entrepreneur in order to pilfer his assets … On its face, were that to happen in the midst of this economic downturn it would garner much higher red flags of unfair victimization because the operator ostensibly was caught unable to meet commitments due to the national economic major shutdown.

    My point here is that although there may be preceding problems for any client a/c that in these times the banks will be hamstrung from acting in normal capitalist ways.

    A recent MarketWatch article captured that thought well:

    “One essential 2008 comparison we tend to overlook was that during the Lehman crash outside the financial sector, life went on. In essence, restaurants took bookings; taxis took rides, shops were still bustling. This time around, the entire world is on the precipice of shutting down,”

    One modification: the entire world (major western economies) have shut down!

    I gone.

  42. John A Avatar
    John A

    @ De

    That last paragraph is critical for Bajans to understand. In the 2008 crash the people were not on lock down. Those with money still travelled, some even bargain hunted for second homes etc. What we had then was suppressed activity based on market uncertainty. What we have now is literally a cease of all consumer based public economic activity. So this time the rich, the poor and the middle class have all been forced to stay home. What we have today is a global economic shutdown. Now the wealthier countries will throw cash at their economy, but that will only help the domestic markets. Remember there is no foreign travel in and out of many countries between major markets.

    I really hope that the public and powers that be understand the depth of the water we are entering. They need to offer help to those that need it the most, while ensuring banks put a freeze on repossessions due to missed payments for at least the next 90 days.

  43. Silly Woman Avatar
    Silly Woman

    @John A March 18, 2020 10:30 AM “I don’t think any bank or loan agreement would of thought of a clause that would of dealt with a case like this”

    That is because the boys and girls who went into banking/finance/economics etc. left their natural science classes way, way too soon. Like “if i don’t want to be a doctor what I have to study biology for?”

    I bet that neither GP nor robert is surprised by COVID19, and neither am I.

    Mother nature has worse in her arsenal. Far, far worse.

    This teaches us the value of a broad liberal education. Education not for a job, but education for life.

  44. Silly Woman Avatar
    Silly Woman

    I am not a terribly religious person, but it is time that all the world beat its swords into ploughshares.

    Why do we need weapons when Mother Nature has zillions of l’il soldiers (viruses) willing and able to kill us.

    If the world was spending even half the weapons money on agriculture, health and education,,,we may well have reached the promised land by now.

  45. Hal Austin Avatar
    Hal Austin

    @ John A
    2007/8 was a demand shock; this is a supply shock. What will be the impact on our tourism sector? Are visitors cancelling their bookings? How about hotel and restaurant jobs?
    How many ICUs does Barbados have? What is our epidemiological modelling? This is when the maths department at UWI should come in to its own. Where are they?
    Why are they not on the platform with the acting CMO and the minister? We need to hear from medical scientists (the people who doing the research), not doctors (applied scientists) and politicians. Why has @Robert Lucas not been co-opted in to advise the government?

  46. Mariposa Avatar
    Mariposa

    The ones that need the most help are the barbadian people who suffered and help raised the reserves to 1.5billion dollar
    Now the time has come for govt to step up to the plate and send a peace offering in the form of a monetary stimulus
    Monies which govt had promised barbadians in a ten year of being in opposition

  47. John A Avatar
    John A

    @ Hal

    Yes I agree with you that this is a unique case for sure. I mean the USA had the great depression and the UK had the war, but no one has ever had a case where the economic activity was hit for all classes at the same time. Lets take Paris for example, regardless of your wealth you will still be locked away in your home tonight. In other words the wealthy and middle class this time can not help us if they can’t get out to spend, eat, travel and generate business.

    Tourism cancellations for example are now rolling in here like everywhere else in the world. How much revenue will we lose between now and October in this sector? What plan do we have to trim expenses based on this? These are the issues I would like to hear discussed.

  48. Hal Austin Avatar
    Hal Austin

    @ John A

    The pound sterling has plunged, its worst in 35 years. That is our tourism market. Put another way, at a time like this the Bajan is appreciating. Should we decouple?
    When a re we going to get a revision of BERT?

  49. kflinter Avatar
    kflinter

    If a butterfly flaps its wings can it cause a typhoon not sure but a Chinese dude eating a pangolin arse in Wuhan can cause a financial sunnami

  50. David Avatar
    David

    Italy is the extreme case but…:

    According to Serra, regulators and Italian banks, as elsewhere in Europe, will have to allow borrowers to suspend debt repayments, without it automatically meaning they must reclassify the loan as non-performing. At the same time, the government will guarantee the debt of borrowers in the most affected regions and sectors, making the debt moratoria what he calls “economically neutral” to the banks. Nevertheless, this will merely stave off an immediate banking crisis, rather than entirely remove the economic damage of the coronavirus on the banks, says Luigi Tramontana, analyst at Banca Akros. “It is only a way of delaying the recognition of non-performing loans, to see how things will evolve, and if it’s a more profound crisis,” he says, discussing debt moratoria.

    Full article: https://www.euromoney.com/article/b1kq42s3yscx9g/coronavirus-italys-banks-and-smes-face-crisis-if-shutdown-persists?copyrightInfo=true
    Visit http://www.euromoney.com/reprints for additional distribution rights. For more articles like this, follow us @euromoney on Twitter.

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