Banks ‘disappoint’ in refusal to delay rate hike
(CNS): Premier Wayne Panton is disappointed that the local high street banks have refused to delay implementing the latest interest rate hike, even though there is no need for them to keep pace with the US Federal Reserve. Interest rates have increased in the Cayman Islands ten times in just over a year, adding to the cost of living crisis that people are enduring.
In a statement about the situation issued Friday, Pantonwho is the minister of finance, said he had met with and written to the Cayman Islands Bankers Association (CIBA) twice over the past year to ask the local retail banks to hold off rolling out interest rate hikes to help homeowners and businesses. However, on both occasions, with the exception of one bank, they refused.
“Given this refusal, I would like to publicly register both my disappointment in their position to date and also my expectation that they will engage in further dialogue with government to determine how best to alleviate the impact of future rate increases,” Panton said in the statement.
Larger economies use interest rate hikes to control inflation, but increasing rates here has little effect on local prices because the rising cost of living is not driven by the local economy but by the jurisdiction’s dependence on imports and the sale of property to foreign investors and absentee owners.
“While local banks have historically immediately increased interest rates in tandem with rate hikes by the US Federal Reserve, which sets the “prime” or “base” interest rate for borrowing, there is no reason why this must be the case,” Panton said. “Indeed, banks in our fellow British Overseas Territory of Bermuda do not automatically increase their prime rate in tandem with US Federal Reserve increases.”
Concerned that the banks’ refusal to help mitigate the economic forces that Cayman has little control over, Panton said he hoped they would reconsider their position. He said he wants to see a 60-day delay on rolling out hikes when they happen and for the high street banks to re-examine the policy of automatically putting up interest rates as soon as the US Prime Rate goes up.
“Although my efforts in this respect have not yet met with success, I would like to assure the Caymanian public that the campaign does not end here,” the premier said. “The banks are insisting that their residential mortgage portfolios are not ‘degrading’; however, my colleagues and I are continually hearing from constituents that their mortgage payments have increased to an unsustainable degree, in some cases up to $1,000 or more per month. This is a huge increase that might negatively impact any family in these times.”
Worried that people could begin losing their homes, Panton said the Cayman Islands Government must guard against that, and Cabinet was considering other measures to help people get through this inflationary period. He said the CIG would endeavour to find other ways to alleviate the stress that the rising cost of living is creating. But in the absence of cooperation from the banks, he encouraged borrowers to investigate fixed-rate mortgage options and to maintain lines of communication with their lending institutions.
“There is hope on the horizon, as most economists predict that the current trend of increasing interest rates is nearing its peak, and rates should start falling soon,” he said. “Government recognises our responsibility to make every effort we can to mitigate the current cost of living crisis that is negatively impacting thousands of hard-working, diligent Caymanians.”
Earlier today, McKeeva Bush MP called into Radio Cayman’s For the Record to reveal that he had filed a private member’s motion asking the government to do something to stop the banks from increasing rates and to create a local financial institution that could control the rate that banks can charge on borrowing. The motion is expected to be debated when parliament resumes next month.
See Panton’s statement and his letter to CIBA in the CNS Library and below:
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Category: Banking & money, Business
This man is as clueless as they come. We don’t want no delay in interest rate hikes. They need to be stopped now!! we are not controlled or governed by the Fed and for far too long we in Cayman have been making the banks regulate the interest rate.
Can we just have an election tomorrow cause its clear we are being governed by a set of pre-school students who are still learning to color in the lines.
Tell me you know nothing about economics without saying you know nothing about economics…
Cayman banks do not have to borrow from the FED. They take deposits and loan them out for mortgages, cars etc. Their costs do not go up unless they raise the interest they pay on savings or fixed deposits. As we all know that does not change, so tell me again about economics.
@2:12PM..Are you mad?..reread again what you just said and I don’t mean what you said about the Premier..Lord help us if you or anyone of your type gets elected..I think the person that is clueless here is you..I only hope to god you are not Caymanian..Your comments are so embarrassing and really shows the level of lack of education in this country.
The banks? They can charge what they want because they dont care about most of us – the really rich dont pay the same interest rates as you and me. This may come as a surprise to most. There really is a 2-tier society. Private lending is out there but only for those that dont need it! And those that take it are operating in a world most of us cannot even fathom.
In a just world, the wealthy would pay higher interest rates to enable the rest of us to exist. But its the opposite – the richer you are, the less you are charged (in percentage terms). The poorer you are, the higher your rates on mortgage, credit, etc.
Its not right. But its legal. Until we march in the streets and demand change, they’re just gonna keep paving paradise and laughing at your from their $20M condos.
but dont worry, someones farming goat cheap so we can have meat once a month.
So basically Mr. Premier, what you’re saying is…. you aren’t doing didly squat to actually help the people. We have to fend for ourselves and pray we all make it to the other side of this financial h*ll hole. Got it. Noted, with thanks…
While we are on the subject. How are the discussions with the fuel companies and gas station owners going?
and supermarket owners…another set of crooks.
the banks are ‘having their cake, and eating it too’. Mortgage rates are matching the rate rises – but savings rates are not. Both sides of the equation are supposed to be working in tandem to curb inflation.
Wayne – if you are worried about the cost of living for citizens and residents (especially the young and the most financially vulnerable) of these islands, try impacting what you do control.
Your government just brought in a freeze of pre-owned car imports that are older than 2015. That has sent the cost of car ownership through the roof and gave inflation a huge boost on these islands.
We all know this is the big car dealers on-island quashing the competition and maintaining their Cosy Cayman Car Cartel.
I’m all for the environment but small compact sized 1.0, 1.2, 1.3 1.4 and 1.5 litre engines are not the big gas guzzling behemoths that causes traffic congestion by their sheer size and yet these these small cars cast into the same environmental villians as the big new shinny SUVs. This proves how much a con this whole exercise is.
Relent on that nonsense and restrict the big gas guzzlers and allow the small person bring in perfectly fine affordable motor vehicles that do not harm the environment like the big SUVs.
Additionally: There are quite a few car enthusiasts on island. CIG abruptly brings in a new law that prohibits any car older than 7 years of age, unless it’s 30 years old or more – at which point they can be imported as classic cars. First, in USA classic car status begins at 25 years. Secondly, there are any number of vehicles between 7 – 30 years that are near brand new condition (think Porsche / Corvette etc.) and might be imported by a collector, that are now suddenly illegal. Keep in mind; these vehicles would provide significantly large duty fees to Customs / CIG, in nearly all cases would very rarely be driven, so would cause no addition to peak traffic congestion! One driver / collector can drive only one vehicle at a time! Any movement yet on providing a proper bus service, with proper bus stops and properly enforcing traffic laws – inclusive of enforcing that bus drivers stop the unsafe and frustrating practice of picking up and letting off passengers in the main road arteries? NOPE! Any talk of providing overpasses of the most severely congested roundabouts? NOPE!
I struggle to feel sympathetic about not being able to bring in used Porsches and Corvettes, tbh, even with the points made regarding duties and unlikely impact on traffic congestion.
The used car salesman has entered the chat.
They really want to keep the property bubble to keep growing.
Yup. CIREBA folk have clearly been moaning about actually having to work for their extortionate commission.
What a sad political ploy and a one sided view of the situation.
The cost of borrowing goes up for the banks as well. They pass it onto us.
How about these record government revenue? Inflation pushed those numbers up as well? Anyone been to the grocery store lately? Prices through the roof. How about a break in duty and fees on food and fuel?
I would feel sympathy for banks and their cost of borrowing if they increased savings interest rates given to depositors whenever they increased lending rates. Right now, they increase lending rates, but keep deposit interest the same. Very one sided and im sure has a huge boost to profits.
Hard to feel bad for the poor banks when they do that.
It isn’t your deposits funding those mortgages, it is money borrowed at market rates that ultimately funds the mortgage.
The money the banks borrowing is the depositors and those interest rates for savings accounts haven’t increased.
Where do you think US dollars come from?
A bank can borrow from the Federal Reserve through the discount window, which helps commercial banks manage short-term liquidity needs. Banks unable to borrow from other banks in the federal funds market may borrow directly from the central bank’s discount window and pay the discount rate.
Real banks anyway.
Was anybody complaining when lending rates were going down and when they stayed down for a long period of time? If not, you should be well aware that you signed up for a adjustable rate faility that was pegged to the US rates. Now is not the time to complain. How many of you took the opportunity when lending rates were low to do everything possible to pay off your loans? Also, most banks are willing to negotiate and offer one or two year fixed rate deals to assist their customers.
I would like encourage everyone with loans to focus on putting as much money towards those loans as possible to get them paid off as soon as possible. If you don’t have a loan or mortgage and you are in the market for a loan or mortgage please remember that you don’t have to always borrow your maximum entitlement to impress your friends and family.
I’m guessing you don’t have a mortgage.
the advice given is good. Everyone should be responsible for the debt they take on. It’s only given to consenting adults, after all. no one forces another person to take out a loan.
This is pandering to the stupid and he knows it. Banks’ funding costs are based on US rates.
Panton the cost of living (especially real estate) on this island is totally unchecked and you could offer real solutions, but this is not one of them. ZIRP is over. Banks are actively exiting the region. Don’t give them a reason to speed up.
McKeeva was Cayman’s Trump.
Wayne is Cayman’s DeSantis.
Both equally power hungry, divisive and manipulative – except Wayne lacks the ability to hold influence and garner respect amongst his PACT members or the type of person who votes for them. He’s not aggressive enough. And they can smell fear as much as they can smell money XXXX but he can’t buy loyalty.
Both McKeeva and Wayne appeal to the same mentality of voter but Wayne is painfully more incapable of leading. McKeeva was terrible at leading as well, but just like Trump’s Red-capped, ignorant loyalist, McKeeva had a bunch of Green Flag-waving lap dogs that would bite your head off if you said anything wrong about their God, Bush. People were afraid to criticize McKeeva because of this and he grew more and more… well… McKeeva-ish.
I remember one well-known “athlete” calling in to a local talk show and threatening to throw a previous caller off a building for speaking against McKeeva’s antics.
I say all of this just to say… the government/leadership problem we have in Cayman are not unique. There are countless examples of corrupt and incompetent men and women leading major countries all over the world.
The election is won on a promise. The politician is fueled by greed. The populace is motivated by anger and fear.
That’s the cycle.
I have yet to see an answer on how to break that cycle. I expect to see another fiasco of a government come next election.
So, I’ll continue being unsurprised and unimpressed with local and international governments as well as the people who vote them in.
Clearly, he is looking for a scapegoat and the bankers are easy to hate. He does not understand the global nature of money. Giving subsidies actually adds to inflation. People continue to consume at a level beyond the resources available. Reduced demand lowers prices. Increased supply lowers prices…subsidized demand without increased supply = inflation…
Did he propose cutting government spending or salaries to slow the hidden taxes on products?
Is he changing conditions to increase supply? Not sure what a few months delay on mortgages would do.
If people watch the news they know interest rates are going up and should have planned for that. It did happen suddenly, but did people think 1-3% interest rates would last forever? Who chose to buy more house than they can afford?
Why wasn’t the government offering financial education before people made big purchases…
It’s a tough pill for everyone.
My hope is that they will increase my deposit interest rate each time they increase the lending rate. Why is that always lagging behind?
Why give the banks free money to lend out at exuberant rates and pay you less than 1% interest? Stop “saving” your money in banks! There are alternatives that can help with inflation.
@11:46 Go ahead and compare the inflation rate of the US with other places like the UK or Canada. The cost of living crisis was a global issue and the States have dealt with it in exactly the same way as other countries, and their inflation rate has decreased significantly. Any government in power would have been in the same position.
Growing fuel poverty amid surging energy prices forced many households in the UK to resort to energy rationing over the winter, compromising their health and wellbeing, the government-sponsored Committee on Fuel Poverty said in a report published on Thursday.
According to the study, many UK households could not afford to heat their homes sufficiently in winter, which led to massive rationing across the UK. To stay warm and save energy, people used “improvised fuels” such as clothes, books and waste as well as alternative means of light such as candles, the report revealed.
Panton said. “Indeed, banks in our fellow British Overseas Territory of Bermuda do not automatically increase their prime rate in tandem with US Federal Reserve increases.”
That’s not entirely true now is it Mr Panton, –
https://www.royalgazette.com/economy/business/article/20230202/bank-follows-new-fed-rate-hike/
The bank said: “The change in base rates applies to Bermuda dollar residential mortgages, consumer loans, corporate loans and USD loans.
“The rate increase on loans takes effect February 6, 2023. The rate increase for existing Bermuda residential mortgages is effective 90 days later.”
The banks don’t have to acquiesce to the premier. There’s nothing he can do because they’ll threaten to pull out and we can’t afford to lose them. Highway robbery through – legalized stealing – and they pay nothing on customers’ deposits; the same money they use to lend to other customers at the exorbitant rates! So unfair.
Take your money out of the banks!
Take half of the surplus and deposit it evenly in to the mortgage accounts of registered voters if you really care about our Caymanian people Wayne.
I think that is called vote buying, friend.
Can’t we even pretend for just a day that this is not how elections work in the caymans (yes I said caymans to be extra offensive)
You are probably only making yourself sound dumb. So go ahead and knock yourself out.
What about the people who were responsible enough to pay off their mortgages, they just get screwed? No thanks, pay your own debts
True. However, with so many foreign workers, who intercept Caymanian employment and business opportunities, it is the Caymanians that are getting the unfair shake in the Cayman Islands economy.
So, how do we balance out that imbalance for Caymanians, who want to work but are passed over by non-Caymanians? That is a significant influencing factor.
And can you explain how your anti-expat gripe is related to the topic at hand please? We are talking about US interest rates and local banks. Help me join the dots…
There are no dots. Just straight up xenophobia by a dimwit.
No, you can have your portion too, but your wife something nice.
Textbook Caymanian voter mentality.
My bank doesn’t even write to me every time the rate goes up and they don’t increase the payments. they told me the customer has to ask for their payments to increase to match the rate increase. I was basically told if you didn’t keep up with all the increases and request every single time there would be a lump sum due at the end of your term. How can they treat people like this! it isn’t like they are even responsive to queries, so no way you can keep up
You obviously didn’t read the contract you signed
Perhaps Wayne should take on all these mortgages at CIDB instead then. Then he can do whatever he sees fit with interest rates.
Might be an option.
daft comments from Wayne.. and smokescreen to distract from the fact that no-plan-pact have done nothing to tackle cost of living/doing business in Cayman.
If PACT who have been in office for less than 3 years are the ones with no plan then what does that say about the PPM who controlled the country for 12 years out of the last 25
Alden and Co sat back and not only allowed the issue to happen over their decade in power but all but encouraged it
PPM messed up the Cayman Islands.
So did UDP. We are all doomed, what a hot mess we’ve ended up in.
Wayne was a Minister in the PPM Government for four years. He was part of that problem.
Remember why he quit the party? Then who he joined up with and appointed Speaker?
Many of us do.
#isshereallysupportedwayne
correct…hence known as di-nothing-ppm.
now can we admit caymanians are unfit to manage their own affairs????
Ask yourself, whether or not, if common law usury still exists and, if so, whether banks in the Cayman Islands have been charging illegal and/or unconscionable interest for years?
And, if you think that’s not correct or relevant, why would the Law Reform Commission draft a Usury (Common Law Abrogation) Bill 2021 for Parliament to consider, which was attached to Law Reform Commission’s discussion paper (dated 1 November 2021) entitled “Usury: The Common Law and Statutory Position in the Cayman Islands”?
Consider interest rates in the 80s were much higher, I would suggest no, Orrie.
Maybe we should wonder if the practice by lawyers to round up to full hours in billing, on the other hand, is “unconscionable.” Weird that the Law Reform Commission didn’t find it of their interest to review that practice…
The fees are certainly usurious
Bank fees are demanding, while quality of banking services has been on a rapid decline.
Decline? They’re already extinct.
I don’t understand the premiers arguements.
1 – “Interest rates have increased in the Cayman Islands ten times in just over a year, adding to the cost of living crisis that people are enduring.”
2 – ” increasing rates here has little effect on local prices because the rising cost of living is not driven by the local economy ”
So either in 1 interest rates contribute to the cost of living crisis for people on the island because mortgages go up and they have less money to spend.
But 2, raising interest rates has little effect on prices because the cost of living is not driven by what happens locally.
So 1 – raising interest rates contributes to the cost of living crisis and 2 – raising interest rates has little effect on the cost of living crisis.
The government contributes to the cost of living crisis by wasting money again and again and again. So it has to keep collecting more money and taxes from us, more import duties, more stamp duties, more more more…so that it can pay excessive MLA wages, employee almost every Caymanian in the civil service, pay every other Caymanian to stay at home and not work, or waste money on useless projects – like the number plates.
If the government ran efficiently and honestly, without waste and corruption, they wouldn’t need to tax us all so heavily.
In the first instance he’s talking about the effect on mortgage rates and payments, which are directly affected by increased interest rates. Hence the increase in cost of living.
In the second case he’s talking about the cost of goods which isn’t as affected by interest rates variations in Cayman as they are in other countries.
Stop the nonsense of the ci dollar…it’s a total joke, backed by nothing
The banks clear 4 cents on each dollar
Then take a look at your bank – does it have a lovely new huge building? That’s the bank to leave
Then go see where the directors of your bay live …are they i vista deal amr or seven mile beach posh condos? That’s the bank to leave
People – wake up…those in power are not smarter than you, they are luck to be there and terrified of you
Take it back.
Propose how then.
Switch to USD. CI$ was originally planned to be 1:1 to USD$, but a last minute devaluation of USD$ caused the current 1.25 exchange rate. Cayman is far to small to have its own currency, and should abandon it in favour of USD$.
Pay us in Pound Sterling!
USD is a dying currency! Instead of pegging to USD, why not peg to GBP? Whatever happened to backing currency with Gold reserves? CIG sure has a surplus often enough to build some sort of gold reserve.
for payments: lightning and for savings: bitcoin.
by-pass the banks altogether. Ignore the “its backed by nothing” rhetoric spouted by the mainstreams (what is USD backed by anyways? An army and threat of violence? how is that any better).
I went to el salvador and bitcoin implementation there completely removed the need for banks for transactions. it was a revelation.
Easy answer…give more funding to the Cayman Islands Development Bank for more low interest mortgages.
Are you out of your fre@king mind???
That would be a complete political slush fund whereby those (BoBos only) who cannot afford loans would be given them for the right vote …AND THE LOANS NEVR PAID BACK.
NO FRE@KING WAY BoBo!!!!
They have already done it…the CIDB just ran out of cash.
And how are those loans performing? Presumably, if they’re being serviced, the government could have further appetite to expand the scope and effectively “compete” against private loans with lower interest rates tied to specific borrower criteria. Given they’re not clamouring to increase that funding, I suspect that tells all the story you need to know.
The banks are totally out of control. They charge more interest to borrow and pay less on your savings not to mention all the fees they charge
Since we get screwed over with personal banking at every opportunity, nothing here is a surprise.
Charge here, fee here, want to use your card, yeah, there’s a fee. Want to use an ATM instead of a living breathing member of staff? yeah, that will cost you.
The quality of banking service is up there with the quality of telecomms service.
Mckeeva, you want to crash another bank as your legacy?
Panton should compose a letter of displeasure to Fed Chair Jerome Powell, and imagine how that might go over as he concurrently threatens to sue the FDIC, from the international grey list cheap seats. What a Bozo.
Whattt. We are talking about banks in the Cayman Islands. Who appoints members of CIMA!!!
Good job Mr Panton. You did the right thing. Try to engage the banks with dialogue. Now that they have collectively refused to be a part of the solution, its time for you and your team to do what you campaigned on and are elected to do. Bring in kegislation that helps reduce the cost of living including but not limited to reduced property and health insurance rates and lower bank rates and fees.
Lightning fast to raise rates on mortgages (change within 24 hours of the USA Fed decision) BUT extremely slow at raising fixed deposit rates for customers. Butterfield’s fixed deposit rate is STILL only 0.8% and that hasn’t changed in about a year. I get it make big bucks on the mortgage side then pay out peanuts to deposit holders on the other side to maximize record profits. Regardless it’s a very weasel thing to do.
Fixed deposit rates for one week liquidation rollover should be at 4%+ instead of Butterfield’s 0.8% current offering.
Nonsense. The price of lending is driven by the cost of funding which is a function of the rates in dollar markets. So the whole premise of the request is wrong.
if thats the case then why isnt the interest the Banks pay more.
It should be in efficient markets but Cayman effectively bars proper access to retail banking so the oligopoly allows a delay in the upside of rate rises.
But the point is that it is the case that the cost of funds is derived from US market pricing and your basic comment doesn’t change it.
Why would Cayman’s class A foreign-owned and operated retail banks, without any consumer protection fee regulation whatsoever in our marketplace, listen to our domestic one term territorial Premier? Please tell me our Premier isn’t this clueless.
So what is the purpose of CIMA and who appoints them?
The government is guilty of adding to the cost of living by banning cars over 7 years old which for the majority of us, is all we can afford. There isn’t even a reliable public transport system. Cars already imported will now cost more so please do not lecture us on economics.
People downvoting this hate us poors and want nothing but to keep us poor and helpless.
Strange this has so many negative votes. It’s all facts.
Unfortunately, most “local” banks are actually branches of foreign banks and they have limited input in what rates are charged for mortgages, loans, and other services.
If you listen to the most recent Butterfield earning call, you will find that they are offering vastly different rates in the Channel Islands as compared to Cayman and Bermuda because of competition from other banks in the jurisdiction. So do we conclude that here they all collude?
This. One hundred times this!
Most of the retail banks are subsidiaries of foreign banks. The difference is that with subsidiaries the foreign owners are not obligated to bailout their Cayman Islands subsidiaries.
Fixed rates options are already available for a much lower interest rate than the floating level (which speaks to the banks’ confidence that rates will fall in the near term). 2 and 5 year terms are, and have been available to borrowers, so I think this political posturing is just Wayne looking for easy targets to blame when viable solutions to the pressures of higher interest rates already exist.
You can tell this government is gearing up for the consequences of their own instability when the Premier is running around preparing more, poorly designed and thought-out social assistance from the public coffers and two other ministers are pushing populist rhetoric on status moratoriums that “don’t represent the government’s view” but will look nice to point their fingers at come woting season…
It’d be great if PACT could stop pandering and start governing, but I think that’s a bridge too far for their capabilities.
How about getting banks to increase savings rates Wayne. Pensioners are on fixed pensions with no hope of an increase like the working population. Those lucky enough to have savings are not seeing any major change in the interest earned. Def getting less than 1% so inflation a major problem (we can’t all use the credit union. We don’t all get free medical.). Your seniors are in real trouble unless they were civil servants.
The banks have consistently and blatantly taken advantage of the cayman people. The conversion rate between US and CI is an example of economic warfare against local business and individuals. The buy/sell rate spread costs each of us a lot of money every year. Government should immediately impose legislation preventing the banks from making money this way. If they will not cooperate, the government should adjust the CI dollar to par with the US and immediately eliminate this incredible annoyance, economic waste and publicity nightmare. It is time for the CI dollar and the US dollar to be 1:1.
Mortgages are a similar example of the local banks ripping off the local population again. Unlike the US that has now rolled out 30 year fixed mortgages to 90+% of their population and where US borrowers are now effectively insulated from rate increases, cayman does not offer long term fixed rates so our borrowers are at risk and we should expect a 2008 type financial crisis to hit cayman if rates stay high for much longer.
Premier panton is 100% correct that the banks don’t have to raise rates lock step with the Fed. In fact they don’t have to raise borrowing rates at all so when the banks reject the request, they are being greedy and short sighted. Premier Panton – please continue to pursue this initiative. And please do something about the CI dollar to US dollar problem.
Who backs these 30 year fixed mortgages? Is it a commercial bank or is it the government. My understanding is that for example The Federal Housing Administration, which works under the Department of Housing and Urban Development (HUD), guarantees FHA 30-Year Fixed Rate Mortgages. So, the FHA protects the owners of your mortgage in case you default on the loan. Does Cayman Government offer something similar?
Also after CNB sold to a foreign company, which bank in Cayman is a true Cayman bank. Aren’t they subsidiaries of foreign banks and have limited to no decision making abilities?
Our retail banks are a rapacious disgrace. Ever since the 2008 global recession they haven’t given the slightest interest, either in their customers or on deposits. The mission now is to behave in the most usurious way possible, in return for the least possible service.
Why exactly do we have to peg our dollar to the USD? Biden has destroyed the economy with the excessive inflation that unfortunately affects Cayman too.
Class A Banks with substantial Mirtgage portfolios are no doubt rejoicings t the higher interest rates as this increases their profitability. If they acede to the CIGs request, they will face severe lash back from their shareholders whose reason for investing in them is for profit. There can be serious repercussions if CIG does not halt this Socialist posture of giving the people everything and to hell with the dynamics of the market. Customers talk to your Banks if you are having problems with repayments , incidentally that is the only sensible words that came out of the Premiers verbiage. Banks are not in the business of taking homes for in doing so and until they are fold they have to be responsible for their upkeep so despite cases of internal hanky pank by some of their debt collectors and others in the market, that is not the mission of Banks .
Tinkering with the Banks and dictating if interest rates is not in the best interest of this jurisdiction PACT get some advice from your UK Masters on this if you cannot trust the local/foreign bankers in ya own yard.
Government has a large surplus, right? You are a part of the problem. Reduce and put a moratorium on duties. Stop blaming everyone else when your government is able to implement measures to help.
Banks are businesses, not charities. Wayne should do a better job controlling his rogue cabinet and putting that surplus they be bragging about to better use.
One thing the government can do to assist people and reduce inflation, especially for the retired, is to stop charging stamp duty on every bank debit and credit transaction. Together with bank charges they deter some people from taking advantage of electronic payments.
That is indeed disappointing as it is also in the banks interest to not have their customers forced into default by significant increases in their mortgages as well as the insurance premiums on their homes. This can lead to a serious recession in Cayman’s economy and also in the prevailing social harmony that influences people to invest here. But the old people always said there is more than one way to skin a cat and government could cause them to rethink their position by funding the Development Bank to the capacity that it could allow those impacted by the high interest rate of the banks to apply for loans at lower interest rates. That would cause the banks to lose significant business and perhaps they would be willing to rethink their position. Afterall, they should have a social conscience and should do their part to protect the economy of the country we live and call home; the same country that allows them to make a decent return on their investment.
The problem is Joey there’s no more local banks. Decisions at all these foreign banks are all made overseas. If Government would take that surplus and inject into CIDB or Credit Union then the small man with a mortgage would stand a chance. However, our government wish to help their buddies by building more roads and in the process, destroying the environment and tranquility!
Mr Premier doesn’t want to slow down development and destruction of the environment, he’s openly encouraging it.
who’s this really for Mr Premier ?
Banks are businesses, don’t ductate how they make money. Shows how much the premier understands business. The banks here have to borrow money too. So they are being told to borrow money and make less off it. How is that profitable for a business?
Wayne – couple of suggestions.
1. Ask the banks to simply add months/years to the end of any loans, rather than increasing rates. Indeed, they could be asked to “rewind” to the position 12 months ago, to lower the monthly burden further. Of course, this should be only offered to those up to date with their payment, and with the consent of the borrower.
2. If the banks refuse to play along with the above, offer any Caymanian who is up to date with their mortgage payments, up to $250,000 as a 5 year loan, fixed at 5%, on condition that the money be paid to reduce their existing mortgage. Register a second charge on the property for security. You have the surplus to cover it, it will generate a return for the government, and if the banks are not willing to be responsible, government can and should compete with them.
When interest rates were near record lows for the last 10 years all the banks introduced all kinds of user fees on their customers to make up for their lost revenue.
I assume all these user fees will now go away since rates are approaching levels not seen in 20+ years.
The Cayman-specific spread over US prime should be legislatively removed by a sensible Cabinet, particularly since our class A banks are no longer owned and operated by lodge Caymanians, and for years. Fee and credit card rates should also be reigned in. Where is credit interest? Where are the savings products offered elsewhere? Legislate some basic consumer protection.
$1000 per month ? My mortgage on a $200k balance is now $2800 per month and I asked about refinancing only to be told I will have to make a brand new mortgage application. They threw a bunch slag red tape at me to convince me to leave it as is. No other inflation fighting measures that Pantin dreams up is going to save me from the rape I’m getting from my bank and he knows it. And a 6 month delay in increases is only delaying the rape for 6 months.
A refinance application is just like a brand new mortgage application. Up to date valuations, up to date proof of insurance, up to date expenses…… if you really want to move your loan or refinance, just be prepared to fill out all this like its 100% new. If you really want something, you find time to just do it.
If only this was the case for everyone, certain special customers don’t have to deal with the red tape they basically do the work for them. I guess I don’t have the cash they do.
The Premier does realize that our entire economy runs on USD. If he wants to control interest rates then let the KYD float against the USD and decide your own monetary policy.
May as well just peg to the Jamaican dollar in that case.
I wish I could upvote this 1000 times because finally someone gets it!
I would be terrified letting these people decide our monetary policy. The most basic of tasks seems way beyond them.