We must thank the many Belizeans who have commended this publication for the article on the Belize Bank’s Group Risk Unit and the exposure of how the bank is stifling and killing businesses without proper justification.
On Friday morning of last week the Belize Bank executives were in a quandary. They were scrambling to meetings and pointing fingers on who could have been the mole that leaked that there was going to be a full staff meeting with lunch and refreshment provided to mitigate the “riot act” that was to be given by Chairman Lyndon Giuseppe, the Trinidadian. As a matter of fact, rewards were being offered for the name of the author, as though this publication lacked such capability. Shame on that Market Square crowd, and if they persist we will expose publicly the names of all the bribers.
However, when the noise reached Lord Michael Ashcroft, also known as the virus, early Friday all hell broke loose. There was an immediate postponement/cancellation of the full staff meeting and both Chairman Giuseppe and President of Belize Bank Philip Johnson were on the first flight out of Belize. It appeared they were urgently called away for a heavenly tongue lashing by the Lord.
If readers recall from our last publication, Philip Johnson has been blamed by many for the firing of Louis Swazey. Swazey was used as the fall guy to protect Johnson. However, word coming out of the Central Bank is that the feeling is that Philip Johnson should have been given immediate walking papers for the disastrous way depositor’s money lodged with the Belize Bank has been exposed. If the Trinidadians did not come to town (Belize) who knows what might have happened to the Belize Bank; there could have been a total meltdown and a collapse of the Belizean economy.
We have reported in many of our past publications on the reckless attitude that was being employed by the Lord Ashcroft affiliates and the way they threw around taxpayers and depositor’s money as though they had infinite supply. What is serious about those actions is that it created a major mismatch between the loan exposure of large borrowers and the small borrowers that are delinquent.
In reports that have surfaced, approximately 80% of the delinquent amount is made up of ten or so PUP cronies and the hundreds of the other small borrowers account for the remaining 20%. What is unforgivable is that the Belize Bank did not spread their risk, which is a fundamental banking practice. They placed all their eggs in the same PUP crony basket and when the PUP and by extension the cronies were kicked out of Belmopan the sucking of the tax payers ceased, therefore the debt services also stopped. It stopped because none of these loans were given for projects that could stand on their own. The loans appeared to be a hustle.
None of the big borrowers (cronies) in that 80% delinquent category can service their loans, so eventually the bank will foreclose and the bank will eventually have to make provisions for these non-performing loans which will put the depositor’s money at risk. In addition many of these loans are securities that are useless. If these securities are put up for sale/auction they would fetch pennies on the dollar. Many of the monies that were loans are lodged somewhere in foreign bank accounts where these cronies spend vacations as the rich and famous.
Everyone is applauding the Central Bank for the strong position being taken to ensure that the Belize Bank get back to their fundamentals and protect the country’s monetary system. The Central Bank knows exactly who the culprit is that has caused this scary time at the bank; however, the pressure is mounting to ensure that who led the Belize Bank into the present fiasco is shipped out by the end of the year. This way the Belize Bank can turn over a new leaf and practice sound banking to protect the depositor, borrowers and the jobs of their employees. Ensuring job tenure is the hallmark of this UDP government. Ensuring that all areas of the Belizean economy are vibrant is what is being practiced by the Dean Barrow administration as they embark on landmark efforts such as the re-nationalization of BTL to protect Belize from viruses.
