Foot steps in as IMF leaves

(CNS): As Cayman waves good-bye to the assessment team from the IMF it will be greeting yet another team wishing to ’review’ the financial services industry. Michael Foot and a team from the UK Treasury arrived in the Cayman Islands this weekend and will beginning its own assessment of the jurisdiction, as announced by Chancellor of the Exchequer Alistair Darling in last November’s UK Budget review. Cabinet will meet Foot and his team on Monday morning and government said it will take an active role in the visit.

At last week’s post-Cabinet press briefing, Minister with responsibility for policy with regards to international financial service Alden McLaughlin said Cayman welcomes any objective and independent review that would been seen as constructive. “Over the years the Cayman Islands has been inspected by a virtual alphabet soup of organizations and we do not fear this or any other review,” he said.

The minister also stated that they had met with Michael Foot in London while they were in the UK for the constitutional talks last month. “We have good grasp of what he will be doing here. He will meet with the governor and then Cabinet as well as entities such as the CIMA and representatives from local law and financial firms.”

McLaughlin explained that his review will depend considerably on the conclusions of other agencies and will be looking at the sustainability of offshore and the UK’s contingent liabilities. “This is different to other inspections, such as the one under taken by the IMF, as the UK is looking to find out what would be the consequences if it had to step in here as a last point following an economic problem.”

Former chair of the Cayman Islands Monetary Authority Tim Ridley recently said that thisvisit should be welcomed as it provides an opportunity to present the facts of Cayman’s case.

"This is particularly important as Cayman’s financial services industry has shown remarkable resilience during the recent global financial crisis. Others could learn a few lessons from us! After all, no local banks or insurance companies have failed; no depositors or insurance holders have been left with empty pockets.”

He added however the devil is in the details of the review, how it is carried out  and what the UK Treasury does with it. ‘It is vital that the Government and the private sector in Cayman engage with and inform the review team fully.”

According to the UK Treasury, the review team will be looking at the immediate and long-term challenges facing British offshore financial centres in the current economic climate, including financial supervision and transparency; taxation, in relation to financial stability, sustainability and future competitiveness;financial crisis management and resolution arrangements and international cooperation.

The UK government has said that the existing constitutional arrangements in place across these territories will continue to be respected, including their independence in fiscal matters and the setting of their own rates of taxation. Foot,  who is Chair of Promontory Financial Group and will be leading the review, has said that after working as a financial regulator in the UK and overseas he has direct experience of the achievements of the Overseas Territories. “I am looking forward to working with them to see how best the important contribution of their financial sectors can be underpinned and strengthened for the future in these challenging economic times,” he said.