PHILIPSBURG–United People’s (UP) party leader Rolando Brison has sent a firm letter to Central Bank of Curaçao and St. Maarten (CBCS) President Jose Jardim, urging CBCS to take a number of urgent actions to help ease the blow of the COVID-19 crisis in St. Maarten within two weeks of receiving his letter or make their positions available for persons who are willing to help the country.
Brison’s letter, dated April 21, was sent via Finance Minister Ardwell Irion. Brison said having examined CBCS’ legislation and looked at the books and state of the monetary union, he came to the conclusion that CBCS can and must do more for St. Maarten. The UP Member of Parliament (MP) said he has full confidence in Irion, but he believes that CBCS needs to be “called to order” and get things done for St. Maarten.
In the letter, Brison identified six action points that he believes should receive immediate solicited advice from CBCS. The points include the issuance of a licence for the establishment of a National/Development Bank for St. Maarten. Brison said CBCS should immediately – and without prejudice – pre-approve a bank licence for St. Maarten to establish a national bank.
“In this way, we can make use of our tax and economic structure to channel funds and financial support through this bank, incentivise the repatriation of much-needed liquidity from around the world back to St. Maarten and thereby stimulate the economy,” Brison said in the lengthy no-nonsense letter.
He said the government of St. Maarten should receive a letter of no objection from CBCS on this concept, after which the country can begin its formal application procedure for the banking licence as prescribed by law, within two weeks of receipt of his letter.
Brison is also calling for a lower reserve requirement and “super-low interest rates” for commercial banks. He said CBCS needs to explore using a lower reserve requirement as well as low interest rates (one per cent or less) offered to commercial banks, to incentivise their passing their “super-low rates” to the local community.
He wants a plan presented within two weeks of receiving his letter. He also said that CBCS should insist on unconditional, fully postponed mortgages from banks. “While the commercial banking sector seems to offer some sort of vague relief for mortgages, oftentimes the fine print of this relief turns out to be much less of an incentive than it may appear to be on the surface.
“What commercial banks should be doing is very straightforward: a full interest-free postponement of mortgage payments and interest collection for a period of at least six months.”
He said CBCS should instruct that banks confirm in writing to CBCS they will provide unconditional fully postponed mortgages for at least six months to all local accounts. The instruction should be sent to commercial banks within two weeks.
Another action point is a bond issuance for government. Brison said CBCS is authorised to buy and sell bonds. CBCS should therefore advise government how to use this tool to raise the funds it needs via the central bank. He said CBCS should present government with three scenarios for bond issuances in a lowest, median and maximum bond issuance possible for St. Maarten within two weeks.
He also called for the immediate right to bank accounts and consumer protection laws for St. Maarten, noting that everyone and every entity must be given immediate access to basic bank accounts separate from the international network, that can be used for local transactions.
He said CBCS should clarify to banks the position of CBCS in allowing them to open at the very least, basic bank accounts separated from the international banking system, to facilitate local transactions; review the Consumer Banking Protection law and provide legal support for the law so that it can be passed by Parliament with an endorsement from CBCS.
Clarity must also be given to the public as to what the current central bank guidelines are on the requirements for opening a bank account, to prevent the situation where banks currently blame central bank regulations for their obtuse policies for bank account openings.
His final point is making CBCS expertise available to government and Parliament. Brison said CBCS has some of “the best and highest paid experts” of any organisation in the monetary union. This technical resource should as much as possible be made available for government to make use of the urgent technical tasks required to be conducted related to COVID-19 economic recovery.
Brison said he has informed Irion that if CBCS does not immediately address his action points “with vigorous action and certainty,” the UP faction will be calling on the government of St. Maarten to exercise every option available to it to see these items complied with for the benefit of our citizens.
Measures should include asking board members and directors to make their positions available to those who are more able and willing “to make sure St. Maarten does not fall into further social and economic dismay that could be readily prevented by the central bank.”
He said while it is not the role of MPs to move or remove CBCS members, MPs have a role to hold ministers – including the finance minister – accountable. “The Constitution also allows us by motion of Parliament, to request that government take action in the form of national decrees. As an MP, I would not hesitate to use my right of tabling a motion and seeking the support of my honourable colleagues to defend my country in its most trying time ever,” Brison said in his letter.
“It is my opinion that St. Maarten cannot afford any more excuses. The very survival of our country and its people will depend on swift action and a solution-oriented attitude rather than a defeatist attitude from the central bank whose role has never been more crucial.
“Any excuses as to why you cannot execute these points – despite it being legally and feasibly possible – should be met with swift [action – Ed.] by our country; and St. Maarten simultaneously should consider its options in leaving the monetary union. St. Maarten deserves action from our central bank and not excuses,” he noted.
Bron: Daily Herald