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Editorial – Friday, July 19th. 2019

Editorial – Friday, July 19th. 2019
July 19
17:46 2019

We are satisfied, after looking at all the evidence, that the Central Bank of Belize could have averted the collapse of Atlantic International Bank by insisting on a closer monitoring of its loans portfolio?

All financial institutions in Belize are subject to the Domestic Banks and Financial Institutions Act and all international banks are subject to the International Banking Act which requires them to provide the Central Bank of Belize with regular and timely updates on what they are doing.

We know that after the collapse of the Civil Service Credit Union in April 2017, the Central Bank of Belize increased its surveillance over all credit unions in the country. We also know that after November 18, 2018, the Central Bank of Belize placed Atlantic International Bank under enhanced supervision.

It should have done so a lot earlier, especially after Atlantic Bank Ltd. lost its correspondent banking status with Bank of America in 2017 and after the collapse of Choice Bank in 2018.

We are of the view that the Central Bank’s failure to act earlier contributed in part to the trouble with Sanctuary Bay, and the run on with Atlantic International Bank which resulted in its demise.

The evidence shows that the Central Bank acted only after the Directors of Atlantic International Bank admitted that they could not go on, given the insistent calls from depositors.

Before he retired as President of the Central Bank in September 2016, Mr. Glenford Ysaguirre left a written note flagging the Sanctuary Bay land development project as a potential danger. He did not have the evidence to accuse Sanctuary Bay of fraud, but he did what he could to red-flag that company as a risk.

The Central Bank of Belize had a clear duty to follow through with enhanced supervision of AIBL from those early days in 2017, but it did not do so. It temporized until it was too late.

This is not necessarily a reflection on the President of the Central Bank, Mrs. Joy Grant, who took over in November 2017, even though the crash came on her watch. The Belize Central Bank is staffed with highly trained, highly paid professionals who should know how to spot a potential threat when they see one, especially if they have been warned beforehand.

To say now that the Central Bank is not responsible for supervising real estate companies is to miss the point completely. As we have seen, it was a real estate mega-deal which caused the collapse of Atlantic Bank International.
Surely the Central Bank is not saying that this collapse has had no effect on the health and stability and reputation of the Belizean economy.

When a forest giant is felled, its crash bruises and affects the other trees in the forest around it. So too with Atlantic Bank International, which has been run into the ground by directors who have been given a free hand to make light of the International Banking Act.

The Federal Trade Commission has thrown a wide net, not only impugning the Central Bank of Belize but others as well.
The FTC is an aggressive prosecuting agency of the United States, known for its zeal and belligerence. It may be off-course in respect to other declarations, but it is spot on when it blames the Belize Central Bank for its part in the Sanctuary Bay debacle.

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