‘Low interest rates stifling wealth generation’

Bothered by the low interest rates being offered by commercial banks, Opposition Leader Mia Mottley is challenging insurance companies to come up with new instruments in which the financial institutions can invest.

“The commercial banks have sent enough messages to us that they are prepared to shift their presence because the region is not giving them the returns that it gave them for the last century. Now, how do entities that live with us for 100 years start to make decisions to find other regions attractive all of a sudden? It is because we are not performing at the levels we ought to be performing.

“You can’t fuel growth without having access to oxygen. The oxygen is the savings, the oxygen is the capital, it is also people, and we have the people,” Mottley said today as she addressed the 31st annual Sales Congress for the Caribbean Association of Insurance and Financial Advisors at the Barbados Hilton Resort under the theme, The Environment – Unlimited Opportunities.

The Barbados Labour Party (BLP) leader, who will take the BLP into a general election for the first time when the polls are held next, said she was seeking to lead the country at a time when it was felt that residents should be able to fuel the production of wealth from generation to generation.

Yet, she said, wealth generation was being stifled because of the extremely low interest rates.

“What happens in a region when all of a sudden people can’t even get decent returns on their savings? You now have people putting $100 in a bank account and getting $0.10 every year,” Mottley noted, pointing out that the high bank fees meant that people were now “paying the bank to hold their money”.

Pointing out that the banking system was very liquid, she told insurance officials their industry was placed in a prominent position to be able to make the required transition.

“We have a responsibility as governments, but you have a responsibility as product developers. For us to develop new instruments that are capable of matching the needs of lenders and borrowers in this economy because governments don’t grow, it is business and individuals that grow and without that fuel our underperformance economically will become chronic and endemic rather than changing,” Mottley said.

However, the Opposition Leader said this would require trust and unity among the stakeholders, even as she accused some financial and insurance officials of “slowing the pace of sales”. “There are some of you I know who may even be slowing the pace of sales at this time in a country like Barbados where there is tremendous uncertainty as to the savings instruments that you may even be required by law to invest in. When we start to have that we start to have problems of trust,” she warned.

Mottley said it was critical for people to “pool their savings to be able to be an engine and a fuel for growth in a region that is chronically underperforming”.

6 Responses to ‘Low interest rates stifling wealth generation’

  1. Shurland Prince
    Shurland Prince May 23, 2017 at 6:33 am

    Stupes!!! Wunna got the system the way it is.

    Reply
  2. Mr T May 23, 2017 at 8:08 am

    Really, creating more wealth for themselves and creating more dept… for the consumers?

    Reply
  3. BimJim May 23, 2017 at 8:40 am

    I think the banks should leave.

    If I gave you a million dollars a day for 100 years and then suddenly change to give you $800 thousand a day, are you going to plead hardship?

    Those SAME banks milked our economies like there were no regulations – I remember someone telling me that if you went to any bank for a loan you first had to prove to them you did not need it, and THEN you had to put all of your property up as collateral.

    In this part of the world banks do not take any risks, so why should they continue to expect massive rewards? That is in fact the balance you face if you are investing in the stock market.

    The banks have had it both ways, but now that people have found other sources of borrowing they want to cry foul and beg for relief – and don’t they milk their customers enough for fees?

    Like Cable & Wireless (now FLOW)and many insurance providers, these are companies that gave the people of the region among the most expensive, disgusting and one-sided service for hundreds of years, and at the first sign of a down-turn in their massive profits they want to run away.

    So I say the banks should go, if they believe they are not making massive enough profits in the region. Nobody is twisting their arms to stay.

    In fact, the more that leave, the more business that will remain for the rest. Perhaps others will replace them who give a fraction of a rat’s a$$ about the people they serve.

    Reply
  4. Carson C Cadogan May 23, 2017 at 12:23 pm

    Can someone tell me why the Canadian High Commissioner is campaigning for the Barbados Labour Party?

    Can someone tell me why the Canadian High Commissioner is interfering in the internal affairs of Barbados?

    Reply
  5. Jennifer May 23, 2017 at 2:04 pm

    All of these sick dogs need putting out of their misery.

    Reply
  6. everick May 23, 2017 at 4:31 pm

    @ BimJim
    The banks have already started to leave. Remember BARCLAYS?
    And CIBC? That is why we have CIBCFIRST CARIBBEAN.
    After the collapse of the sugar Industry Barclays stuck around for a few more years until they realised that it was not being resuscitated and their profit potential was nil.

    Reply

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