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

  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: Banks, Credit Unions, etc. to…

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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?

 

 

 

 

 

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

  1. Vincent Codrington Avatar
    Vincent Codrington

    @ John A

    @ dpD

    I think both of you have a deeper appreciation of the systemic crash to which we maybe headed if we and our trading partners all close shop/lock down. A call to give a mortgage payment holiday would not be necessary. The mortgagor simply will not be able to pay.There will be no need for a directive or GOB intervention. In any case the banks nave this covered. In a economic downturn,who will they sell the property to?

  2. David Avatar
    David

    @Vincent

    They are always players in the market with deep pockets. Look st the players for example in the US market who are buying shares on the dip read Mark Cuban et al, billionaires.

  3. John A Avatar
    John A

    @ Hal
    @ Vincent.

    If it was to reach a total meltdown the banks would not want the properties either that is true. What I speak to though is a 25% percent fall in business across the board both tourism and local base for example. So we would still be trading but way off previous highs. For example workers will work, but maybe day on and day off. It’s at that point the vultures would move in. We would have a case where the rich can ” bottom fish” on properties and other assetts kmowing full well they will have to hold them . It is that which we must protect against. We must for example protect the Harbour taxi driver who may miss payments for the next 3 months from losing his car.

  4. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU

    Where were these players with deep pockets during the 2008/2009 Meltdown?

  5. Vincent Codrington Avatar
    Vincent Codrington

    @ John A

    You are quite right. Banks are not in the real estate business.

  6. Hal Austin Avatar
    Hal Austin

    @ John A

    Cash is king. If you have access to the cash you can pick up bargains. The housing market will collapse, so will restaurants, hotels, bars.

    By the way, more men are dying than women. What is our national resilience? Our oxygen supplies?

  7. de pedantic Dribbler Avatar
    de pedantic Dribbler

    @Vincent , absolutely @John A has a comprehensive handle on the depth of this crisis as his posts suggest…. me, just an illiterate, dumb fella plodding along.

    In that vein I completely agree with @JohnA re his 6:58PM…

    I get your thrust that “In a economic downturn,who will they sell the property to?”.
    … I alluded to that scenario when I spoke of too many properties on market at same time… But @JohnA is right: unless there is a moratorium of sorts the banks can still pluck prize assets, repossess and sell…based on supposed standard loan practices.

    The govt directive prevents that.

    2.David is also right, deep pockets folks in 2008 made out like bandits.

    Let’s be clear most folks who are wealthy achieved that by being ahead of the curve … so today there are still wealthy, deep pocketed folks who will take Covid19 as the financial opportunity it is…

    Nothing wrong with that with stock market speculation, puts and shorts and so on but if regular folks like that taxi driver can lose their means of a livelihood because of a stringent bank officer and this complete economic downturn then that’s wrong.

  8. ad@ad.com Avatar
    ad@ad.com

    Where were these players with deep pockets during the 2008/2009 Meltdown

    In the USA for example they were scooping up assets at a canter. Just like they will do during this crisis and all the rest.
    Crisis time is fortune time.

  9. John A Avatar
    John A

    @Hal

    The cash strong International money would probably go after bargains in the Dow, FTSE and S&P. The rush for real estate bargains would be for specialty reality like beach front etc. But as usual the cash rich will become richer. Look at what some stocks have lost in the last 3 weeks alone! It’s crazy what fear can do.

  10. Hal Austin Avatar
    Hal Austin

    @ John A

    You are looking at the end. Ordinary residential homes will come on the market because owners may be made redundant , businesses close or state employees sacked.
    Government must move now to stop banks from foreclosing on residential homes.

  11. Vincent Codrington Avatar
    Vincent Codrington

    @ dp D at 7 :24 PM

    Banks are managed by fellow citizens. Sale of the means of earning an income or selling the homes of a client is rare occurrence. A bank officer does not repossess property by a whim. There is a committee which oversees this process.

    What is worrying about this statement is the notion that the regulators/ GoB have to be involved. There are professional rules and ethics that guide business decisions. Governments cannot and do not get involved in such minutiae.

  12. 555dubstreet Avatar
    555dubstreet

    Trump was accused of buying Golf clubs in Scotland and Ireland that was consistent with money laundering practices after he visited Russia.
    Perhaps the war games of a virus and collapsing global economy are moves he is making after his Senate decided not to look at evidence or call witnesses in his impeachment trial and toed the line when voting not to indict him as well as his 2020 reelection strategy.

  13. de pedantic Dribbler Avatar
    de pedantic Dribbler

    In the normal course of business they don’t @Vincent but this is anything but normal.

    Not suggesting a specific loans officer can repossess on a dislike whim or such trivia but these are troubling times and govt mandates will serve to solve long term issues and shirt term pain.

  14. Hal Austin Avatar
    Hal Austin

    @ Vincent

    Nonsense. Tell that to Trump and Boris. Banks could have a million committees, if anyone does not pay his/her mortgage, they will be turfed out. Remember 2007/8 and the subprime mortgages? Britain has now imposed restrictions on landlords removing renters.
    Government can delay unfair repossessions by forcing lenders through hoops: ie obtaining a court order after X months of non-payment, allowing a payment holiday, etc..
    These decisions cannot be left to the banks alone.

  15. John A Avatar
    John A

    @ Hal

    Yes I agree that normal homes will come on the market but the foreign speculator if having the choice between a 4 bedroom house in st George and a condo on the beach, will bite at the beach condo.

    Problem is many Bajans have bought tourist based properties to get at the AirBB market. They are the ones under threat. I spoke to A lady today who owns 2 condos that she rents to foreigners and she said she has lost all her bookings up to June. If you bought them cash you can weather it, but if you owe the bank dog bust you bones!

  16. Mariposa Avatar
    Mariposa

    JPMorgan Chase to temporarily close 1,000 branches amid COVID-19 outbreak

    This is a real.catastrophe of biblical proportions
    Cant see how small economies going to ever recovery

  17. 555dubstreet Avatar
    555dubstreet

    “You are quite right. Banks are not in the real estate business”

    They own properties deeds until the mortgage is paid off. If you miss a payment or two you lose your home and all the equity that you have built servicing the loan for several years. Bankruptcy is equity theft, and the scam is disproportionate legal fees by insolvency practitioners to eat up all the equity.

  18. Vincent Codrington Avatar
    Vincent Codrington

    @ Hal

    I do not have to tell them. They are doing the ineffectual optics. In any case I will let the outcomes speak for themselves.

  19. Lawson Avatar
    Lawson

    In Canada the banks are allowing you to defer your mortgage for a few months this could go a long way in giving the renters a break if they are going through hard times but some landlords will postpone the mortgage keep collecting the rent and be better off.

  20. curley16 Avatar
    curley16

    There is a great different between pandemic and epidemic in the financial world, particularly insurance. Reasons, why the WHO has deemed this now occurrence a pandemic. I did not go to school for long ,my education was obtained at Dash Valley stand pipe. Read your Property & BI, EB and PHI policies carefully, exclusions section should help. Go and figure!

  21. curley16 Avatar
    curley16

    Difference *

  22. John A Avatar
    John A

    Fellows this is our reality in the islands in terms of tourism in the short to mid term.

    Our major markets are the USA, UK and Canada. All those markets have gone to the point of losing trillions of dollars over the past few weeks. The fact that they could afford to introduce measures and dictate policy to the banks, has helped them in the short to medium term domestically. Econimically however they are all not in a good place, with the dow now under 20000 and sterling in the doldrums. We however depend on these markets for our tourism industry. So what we have to be realistic and ask ourselves is this. In an environment where people are behind on their mortgages and car payments, or maybe one partner is now jobless, where do they place a Caribbean vacation as a priority? This is the market condition that we must now find a way of working in so as to keep our industry alive. One can bet that our neighbours will be discounting big time and offering all kind of deals to secure what business is out there. We must therefore now plan for this and do the same. First past the pole wins the race.

  23. Tron Avatar
    Tron

    To keep our tourism industry competitive, we should devalue the BBD to the ratio 1:5. Otherwise I do not see a future for the banana republic called tourism island.

    I am sure that now the structurally conservative establishment (i.e. DLP party supporters in state and administration) will cry out again and call me a slave driver because I suggest necessary reforms. These are the same people who have promised us since 1966 that we would only have to work half as much as in Scandinavia, but could still afford a great welfare state.

    It is a fact that we have had zero growth for 12 years (!!!) and the 4th (!!!) IMF programme is failing grandiosely because the structurally conservative establishment (for definition see above) sabotages every reform. For 12 years, unions and DLP supporters have refused to accept moderate wage cuts and working time extensions. They insult all those who encourage such reforms as slave drivers. That is a fact.

    I’m beginning to wonder how many drugs you have to have in your head to shut yourself off from reality permanently.

  24. David Avatar
    David

    @Vincent

    The quick answer, the Indians.

    One must assume the scenario playing out is time bounded. This is why banks in several countries have implemented a mortgage payment holiday to allow more time for the best decisions to be taken.

    The pandemic has created a unique situation where decisions made to contain the virus are forcing well run businesses to fail, unemployment etc.

  25. Hants Avatar
    Hants

    The Hilary term came to an abrupt end tonight.

    https://www.nationnews.com/nationnews/news/244476/school-term

  26. Donna Avatar
    Donna

    Good move. If one child gets the virus it will be spread to many in a day. They cannot be trusted to keep their distance. Neither can they be trusted to practise good hygiene and keep their fingers out of their eyes, mouth and nose.

    Buses will also be less crowded, allowing adults to keep a little more distance between them. Given the bus shortage, at rush hour they are packed in tighter than sardines in a can.

  27. Bajan Free Party 2023 0r sooner Avatar
    Bajan Free Party 2023 0r sooner

    Nothing but crooks, And When God speaks on these crooks and those who help cover it up for greed and to keeping working,,they all need to turn to salt when they look back,,, If its not clean you can never keep it under any law! this government never cared, All things plan will never work to many crook lawyer and Ministers, The People are now waking up and seeing what is real after the long talking and lies are now being exposed! , An Island of taxes x taxes , Even ROSS ready to run, Let hope they go back home!

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

    Good move only after UK did it and approved it for Barbados. These electorate selected jokers are not in control of anything except for the crimes they commit against the people and island…they have absolute power over the people to do any number of wickedness, but that is where their power ends…hence nothing positive comes from them to benefit their own people as a whole.

  29. Hal Austin Avatar
    Hal Austin

    This is spectacular and dangerous ignorance. The rest of the world is wrong and we are right. These people are putting the health of the nation unnecessarily at risk. Plse get real.
    This is new virus, we know very little about it. Where is our political leadership when we need it most? Making school girl speeches and getting loud applause may be fun, but in these circumstances it calls for mature leadership.
    Tell us about your modelling, which led to these decisions; Where are our mathematicians? Stop guessing and putting lives at risk.

    The Pan American Health Organisation’s (PAHO) representative for Barbados and the Eastern Caribbean is satisfied that the Barbados Government has acted prudently in deciding to keep the country’s air and sea ports open, even as it deals with the first two cases of the coronavirus here.
    In an exclusive interview with the DAILY NATION yesterday, Dr Yitades Gebre said Barbados certainly had the sovereign right to make decisions on how it dealt with the COVID-19 pandemic, but PAHO would continue to work in conjunction with Cabinet and the Ministry of Health to prevent the spread of the disease.
    He said Barbados had done everything right so far. (Quote)

  30. WURA-War-on-U Avatar
    WURA-War-on-U

    “This is spectacular and dangerous ignorance. The rest of the world is wrong and we are right. These people are putting the health of the nation unnecessarily at risk.”

    they must take their cue from cousin Boris, when he moves, then they are allowed to move.

  31. 555dubstreet Avatar
    555dubstreet

    “In Canada the banks are allowing you to defer your mortgage for a few months”

    This also significantly adds to the mortgage to be paid back

    they are effectively giving a loan for your monthly mortgage repayment amount each month

    and accruing interest on mortgage and new loans

    A 6 months holiday adds 1 year to your mortgage

  32. Hal Austin Avatar
    Hal Austin

    They can also extend the repayment period.

  33. Sargeant Avatar
    Sargeant

    The point about the borders being open may be moot if all the international carriers suspend their flights, e.g. Barbados is not one of the International cities that are on Air Canada’s destination list come end of March and Westjet has already suspended its International flights. On the other hand, the port has to be kept open to facilitate trade although we can still continue the charade that we can be self- sufficient in a few months.

  34. Vincent Codrington Avatar
    Vincent Codrington

    @ David BU

    At least we are making progress.
    Yes we are into the phase of known unknown. Where we differ is that this is amenable by throwing finance at it.Because this is the knee jerk solution offered in some of our more developed trading partners, does not make it the correct solution for them or us.
    Let us concentrate on containment of the virus.Then we will deal with the economic consequences as they occur. We have a pretty good idea what they will be. Barbados is an open economy. We should have experience and expertise to deal with exogenous shocks.

  35. Vincent Codrington Avatar
    Vincent Codrington

    Correction. “Barbados has always been an open economy.”

  36. Hal Austin Avatar
    Hal Austin

    @Vincent
    DeLisle Worrell has always claimed Barbados was an open economy. Now you do too. Plse define an open economy? I am confused.

  37. Vincent Codrington Avatar
    Vincent Codrington

    @ Sergeant at 8:13 AM

    The voice of reason and reality :
    ” the port has to be kept open to facilitate trade although we can still continue the charade that we can be self sufficient in a few months,”.

  38. Vincent Codrington Avatar
    Vincent Codrington

    @ Hal

    I do not engage in exercises of futility. I have no reasons to believe that I would succeed where Dr. Worrell failed.

  39. Hal Austin Avatar
    Hal Austin

    @ Vincent,

    I have never asked Dr Worrell to explain himself. Don’t know the man. You have made a claim that Barbados is an open economy. I am keen to learn the meaning of the term and ask for an explanation. It is not futile. It is called education. Plse help me to learn.

  40. David Avatar
    David

    @Vincent

    A scan of the newsfeeds this morning reveal banks have started to defer payments AND interest for 3 to 6 months.

  41. Mariposa Avatar
    Mariposa

    The Unions bat for the schools
    How come they have not gone to bat for the employees working at the ports
    The unkowns of the virus are yet to be fully analyzed
    The time period and how long it can stay in the body before symptoms are expose
    Looking down the road when barbados enters the height of flu season reality might very well sink in
    China experience the virus late 2019 according to reports
    However no data or reports states how long the citizens were exposed to the virus
    The govt of barbados is playing a deadly game of Russian roulette

  42. TLSN Avatar
    TLSN

    @ Hal,
    Do not to be tough on brother Vincent. It is difficult for those who reside in Barbados to comprehend the scale of the Coronavirus pandemic.

    That some are still discussing the propping up of a heavily subsidised tourism industry is terribly sad.

  43. Hal Austin Avatar
    Hal Austin

    @ TLSN

    This is both a medical crisis and an economic crisis. We are dealing with the medical crisis very poorly – open ports, relying on the US CDC and WHO for directions and, in the process, putting the entire population at risk. What about social distancing?
    As to the economic crisis, there is silence from the hotel sector, the chamber of commerce, the government, the minister of finance, the Opposition parties and the predatory banks.
    It is a silence borne out of confidence or ignorance.

  44. David Avatar
    David

    This is a non point. Incoming traffic is reduced to a trickle. There are protocols in place to check incoming. Manifests are being revised etc. PAHO and other international agencies are supporting the government with policy formulation. Some of you seem to think idiots live on the rock.

  45. Wily Coyote Avatar
    Wily Coyote

    @Hal Austin March 19, 2020 5:10 AM

    My prediction is this new head of PAHO SINCE Sept. 2019 will be relaced shortly, obviously not up to the job.

  46. 555dubstreet Avatar
    555dubstreet

    This is a good time to bury bad news no

    Windrush Bum Rush was due to inherent systemic institutional global white supremacy racism rife in UK Government Report like racial profiling stereotyping black youths for looking too obvious as being wrong shade of criminal

    https://www.bbc.co.uk/news/uk-politics-51961933

    Trump is kind of false leader who would use all options available in various games of wars to rule world in dominion like fallen angel satan

    He started trade wars against his enemies China Iran Europe
    backed off when realised China has mantrol of rare earth resources used for Hi-Tek production

    Told UK if use China next generation Hi-Tek he’ll cut off national security

    Bojo is NWO actor

    =

    False Flags or not Trump and Johnson are Racist Populists with agendas to clamp down immigration and immigrants.

    Same way 911 may or may not have been a false flag*
    US UK NWO warmongers used the events to implement non-stop wars.

    (*) it’s arguable muslims could have performed such destructive missions
    US over-egged pudding Hollywood Style
    Drones were available
    Bush did not find passports

    =

    Not In My Name Sweeping NWO Powers by Racist Populist Trash is a No Go. Seems like USA and UK are starting Biowarfare false flags and dead RIP are collateral damage like 911.

  47. Vincent Codrington Avatar
    Vincent Codrington

    @ David Bu at 9:09 AM

    I concur. Most if not all of these measures that some of our commenters ,in the diaspora, are proposing have been and are being put in place .We have not exported all our brains.

    Banks routinely restructure loans for their clients and this process accelerates in an Economic Downturn which we have been experiencing since 2009.
    This problem at the moment threatens to be systemic. The response of economic agents will not necessarily be the same. We are dealing with a sea change.

  48. 555dubstreet Avatar
    555dubstreet

    Comedy Duo Johnson+Trump initial slow motion lackadaisical act to re-act could be explained by the hypothesis that they’re the perps of all this sht and are waiting for public to freak like geeks and ask them to shut down everything and grant them sweeping powers w/ no Q’s asked.

    This propaganda trick is known as the Hegelian Dialectic, which is known vernacularly as Problem-Reaction-Solution.

  49. John Avatar
    John

    @ Hal

    I have to agree with you that we seem focused here on the medical side of the virus and not enough on the financial side.

    Arrivals are way down now from air and the cruise ship arrivals are at zero from now till the end of the season. The last week of cruise arrivals for example would of welcomed 38,000 visitors here up from 32,000 the same week of last year. The figure this week is zero. Stop and think on just that one statistic!

    The revenue lost between now and the end of April will be massive and yet I can not hear any revision from the MOF on the expenses budgeted for the rest of the year. If we continue like this brace for at least a $400M deficit this year mark my words.

  50. John A Avatar
    John A

    @ Hal.

    Sorry the above comment was from me John A and not John my apologies.

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