The Prime Minister said TT has not been adversely affected by the recent difficulties faced by Swiss bank Credit Suisse as the country has no deposits and a small portfolio with the institution.
Dr Rowley was responding to a question from Chaguanas West MP Dinesh Rambally in the House on Friday. Rambally asked what the state’s exposure was as a result of the Union Bank of Switzerland’s bailout of Credit Suisse.
According to the UK Guardian, “UBS took over Credit Suisse on Sunday in a £2.65 billion deal forced through by Swiss authorities amid fears that a failure to protect depositors would kickstart a global banking crisis.”
Rowley said, “the government did not have any deposits with Credit Suisse that were threatened by that situation. Credit Suisse has arranged bond financing for the government and recently for Heritage Petroleum, but these are not affected since we are not depositors in Credit Suisse.”
Rambally asked if government would be taking any steps to ensure that TT’s portfolio with the financial institution would be managed properly.
Rowley reiterated that TT’s exposure to Credit Suisse was small and did not warrant intervention by the government.
“We will not be interfering with the managers of our portfolios in the HSF, largely because the amount of our exposure to Credit Suisse is very small, and it will be handled by the managers in the normal way. Secondly, the threat and the nervousness of the difficulty faced by Credit Suisse has been considerably ameliorated or removed by the purchase of Credit Suisse by the UBS. That has stabilised the market, and we have no real reason for having to talk to our managers about how they handle our small Credit Suisse portfolio.”
The PM said he was up-to-date of the latest developments in the situation and it is not sufficient to want to take it in the context of doing anything major beyond the common day-to-day management of TT’s portfolio.
Rambally also asked whether the government was implementing the recommendations of the 2020 Financial System Stability Assessment report to improve the resilience of TT's financial system to shocks and contagion
Rowley said, "the Central Bank is actively engaged in adopting and/or implementing the recommendations of the report. In addition the IMF recently stated that our financial system appears sound and resilient although there are issues that require monitoring and the IMF welcomed the progress being made by the authorities towards enhancing the resilience of the banking and insurance sectors in line with the recommendations of the said 2020 assessment report."