Archive for April 18th, 2010

EU ministers can’t agree on bank levy

EU ministers can’t agree on bank levy

| 18/04/2010 | 0 Comments

(Reuters) – European Union finance ministers failed to agree, this weekend, how to impose a bank levy, possibly delaying a global accord on taxing the financiers many accuse of causing recession. Asked about a bank levy, Elena Salgado, Spain’s economy minister who chaired the talks in Madrid, said: "No decision has been made … We will have to keep talking about types of crisis resolution instrument." Pressure is building globally to agree a way to tax banks before a meeting of leaders from the Group of 20 developed and emerging economies in June. Next week, the International Monetary Fund will present its ideas on a bank levy to G20 finance ministers in Washington.

 

 

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On the importance of continuous education

On the importance of continuous education

| 18/04/2010 | 8 Comments

A recent editorial in the Cayman Net News described the Cayman Finance conference on May 6th as “doing lunch, or in this case, holding a conference” suggesting it was an inadequate response to the adverse economic situation faced by Cayman. A comment such as this is plain silly.  

As does the media, Cayman Finance hasa mandate to provide information and a forum for debate.  But perhaps the biggest challenge of all is to change misperceptions about the role that Cayman plays in the international economic arena – a misperception largely created by the media.

One of the major hurdles faced by Cayman’s financial services industry (and by continuation, the Cayman economy as a whole) is that people had begun to believe the rhetoric of the international media and the repeated allegations that a low-tax model such as Cayman’s works to the detriment of the poorest members of the global economy. It is easy to say that Cayman “siphons off tax revenue” without also explaining how the Cayman model benefits global economic flows – those same flows that fund projects that employ people, feed people, create wealth for retirement and provide solutions, for example clean energy production.
On May 6th at the Ritz Carlton the most impressive group of speakers assembled in this Island will be presenting the other side of the economic story and driving a stake through the heart of the fallacy. At Cayman Finance we do not believethat there exists a moral obligation to pay increasingly higher taxes with no accountability on the government’s behalf.  Statistics prove time and again that when taxes are reduced, economies thrive and the people who live in them are wealthier overall.  
One of the major objectives of Cayman Finance for 2010 is to educate the Cayman public on the importance that financial services play in the local economy and by extension how our model actually benefits G-20 countries. We say that legitimate tax competition creates government accountability. The Cayman Finance Summit has been put together to provide an intelligent insight from people who will establish that countries with lower taxes have citizens who are better off overall and how this model contributes significantly to the advancement of the global economy. 
In the same spirit of sharing information and educating the public, Stuarts Attorneys-at-Law and RBC Wealth Management teamed up earlier this week to sponsor a very informative talk by two leading commentators, Dr. Andrew Morriss, Professor of Law and Business at the University of Illinois and Dr. Christopher Culp, Adjunct Professor of Finance at the University of Chicago, Booth School of Business. These presentations were as enlightening as they were sobering, providing detailed accounts of the dire financial positions of the United States (and particularly the individual States themselves) and how these positions may ultimately affect the Cayman Islands. 
The essence of the conversation boiled down to two key points. The Cayman Government need not feel the shame of being alone holding a bag of debt and current liabilities without the revenue streams to pay for them. Dr. Morriss showed a statistics from states such as California, Illinois and Arizona that should definitely make the statesmen blush and would make anyone choose Cayman’s problems over theirs. The problems of our northern neighbour are in part similar to ours: over-extended and drastically underfunded public pension schemes, antiquated revenue systems that do not reflect the basic platforms that state economies are run on, an oversized civil service paid wages at significantly higher rates than could be earned in the private sector, and little or no transparency in the public accounts. The US states have all of these problems plus a crippling tax burden on individuals and companies as well. It might start to dawn on some that it does not matter how much revenue is raised by governments through taxes, the rate of taxation will always be dictated by the level of government expenditure. 
The one area where Cayman does appear to be trumping the US (both federally and at the state level) is communication – at least the Cayman government is talking about the situation and is engaging with stakeholders to investigate solutions. This is evidenced by the commissioning of The Miller Report and we await the implementation of the clear strategy outlined within it to be implemented with due haste.
I encourage all members of the public to attend the Cayman Finance Summit being held on 6 May 2010. Cayman has been belittled in the international media for such a long time, unfortunately some are beginning to believe that what is being said is true – that we need to conform to the ways of the countries such as the US and the UK. 
The irony is that they are in a worse financial situation than we are. As Dr. Morriss stated in his presentation, the Budget Director for one US state said that part of his budget plan was hoping that the some of the companies the state owed money to would go out of business, so debts would not have to be paid. Can someone please explain that moral position?
Denise Gower is head of marketing at Cayman Finance

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Cayman shaken by tremors

Cayman shaken by tremors

| 18/04/2010 | 50 Comments

(CNS): Updated Sunday 10 am — The earth was shaking yet again in the Cayman Islands’ region on Saturday night after two small tremors with epicentres less than 100 miles away occurred south of Grand Cayman. According to the US Geological Survey, the first quake, a magnitude of 4.8 was located 95 miles south of George Town, 6 miles deep and happened at around 8:30 pm local time. The second came around two hours later at 10:25 pm some 85 miles south southwest of the capital, measuring 4.5 on the Richter scale and again about 6 miles down. Since the beginning of the year, when Cayman was shaken by a 5.9 earthquake with an epicentre some 30 miles away on 19 January, there have been around a half dozen further smaller tremors.

Given the distance from the tremor there were no reports of damage. Owing to technical difficulties with the main government server, Hazard Management apologised for being unable to post details until Sunday morning, but they have now confirmed that there was no damage reported.

However, the HMCI reminded the public that Cayman is situated on the edge of a fault region and they must be prepared to protect themselves in the event ofa more significant earthquake.

 

 

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