Recently UK Opposition Leader Ed Miliband has been trying to compare himself to rough riding trust buster Teddy Roosevelt. But Bob Richards seems to be taking on that mantle in the Budget Statement when he takes on two entrenched interests.
“His criticisms of Belco have already been well rehearsed, but he had this to say about the local banks, and he makes a pretty good argument about how the banks have not been acting in Bermuda’s best interests:
“In Bermuda, banks follow the monetary dictates of the Federal Reserve in the US and also their own individual appetites for lending. In the last 10 years, the combination of these two factors has put bank lending policies s national’s national economic interests; that is, ultra-easy money lending when the economy was already red-hot followed by debilitating, ultra-cautious lending during economic weakness.
“The domestic banking environment at present features deposit interest rates at infinitesimally low levels, coupled with excessively wide margins between deposits and loans. Moreover, there is currently no appetite for lending, see Figure 9. And to top it off, banks continue to lay off Bermudian staff.
“This is, on multiple levels, contractionary banking policy at a time when we need to expand this economy. We have stated repeatedly that in order for Bermuda to move forward, all oars must be pulling in the same direction. Attaining such forward momentum is much more difficult to achieve when such an important economic driver as the banking sector is pulling in the wrong direction.
“Mr. Speaker, the Government is in discussions with the Bermuda Bankers Association about these matters to find a way to have everyone pulling in the same direction.”