Minister meets with SVB clients in Hong Kong
(CNS): The Cayman Islands Monetary Authority (CIMA) is exploring legal options after the US Federal Deposit Insurance Corp (FDIC) seized deposits held at the Cayman branch of Silicon Valley Bank, The Wall Street Journal has reported. Financial Services Minister André Ebanks met with some of SVB’s depositors in Hong Kong recently and told them that the Cayman regulator had retained lawyers and was looking for ways to help them.
Silicon Valley Bank was shut down by the California regulator in March, and FDIC, the agency tasked with insuring bank deposits, was appointed as the receiver. The bank was purchased by First Citizens Bancshares, with the help of the FDIC, in a deal that drained $20 billion from the deposit insurance fund. The DIF, created to ensure the deposits of individuals, is financed by banks and covered by the FDIC.
According to the WSJ, the Cayman Islands does not have an equivalent to US federal deposit insurance, which covers up to $250,000 per bank account. The current situation, where depositors in the SVB Cayman branch may be left with nothing, could affect where investors choose to put their money.
“The risk perception is going to be higher for someone who has a bank account in the Cayman Islands or wants to open one,” Winston Wong, an attorney at Flint & Battery, a law firm in Singapore, told the WSJ. “From an industry point of view, it sets a precedent. It could disincentivize funds and companies to transfer their funds to the Cayman Islands.”
The meeting with the minister was attended by representatives from about ten investment firms, the WSJ reported. A person who had been at the meeting told the paper that many firms had tried and failed to retrieve their funds during the collapse of SVB and that some people present “voiced unhappiness with earlier statements from both US and Cayman Islands regulators that led the foreign depositors to believe that their funds would be protected”.
CIMA has not commented on the situation since it issued a notice in March following the failure of the bank. In that brief notice, the regulator said it was engaging with the FDIC and other stakeholders regarding the receivership process and its impact on the SVB Cayman Islands branch.
“The Authority understands that the FDIC will soon issue notices to SVB Cayman Islands branch customers regarding the next steps of the process,” CIMA said in March, adding that it would take appropriate action where necessary.
There was no mention of Ebanks’ meeting with SVB depositors in an official press release about the Cayman delegation’s visit to Hong Kong and Singapore last week. It said the trip was about bolstering relationships with financial services industry stakeholders and engaging with various authorities, as well as promoting the Cayman Islands’ intellectual property services.
Minister Ebanks, Deputy Chief Officer Kathryn Dinspel-Powell and Gene DaCosta, the Cayman Islands Government representative in Asia, were in Hong Kong on 14 and 15 May, where they met with local authorities to discuss the requirements to operate a CIG office there. They also attended a number of meetings and roundtables with law firms and industry associations.
The minister and his delegation then joined Cayman Islands Intellectual Property Office (CIIPO) Director Candace Westby and IP Registry Officer Omara Whittaker in Singapore, where they attended the International Trademark Association (INTA) 2023 Annual Meeting, which was held 16 to 20 May.
While in Singapore, Minister Ebanks and DaCosta met with local officials, agencies and law firms on matters related to operating a CIG office in Singapore, as a possible alternative to Hong Kong. They also met with one of Singapore’s sovereign wealth funds and a connected wealth management institute to discuss how to train and upscale local homegrown talent in the wealth management space.
“The week in Hong Kong and Singapore was very informative, provided strong stakeholder engagement, and was educational in a variety of meaningful ways,” Ebanks said in the release. “There are several opportunities in Asia for enhancing Cayman’s financial industry’s market share, as well as gaining insight into various developments in Asia and how Cayman could provide solutions, and learning of methods to cultivate local talent and address certain local challenges.”
DaCosta said he was looking forward to being based in Asia to support the financial services sector and maximise opportunities.
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Category: Business, Financial Services
Stop choking on your morning Latte. It’s highly unlikely that these funds were physically banked in Cayman. Cayman Class B banks hardly ever have actual Cayman based bank accounts. These accounts were based in the USA in the name of SVB Bank and that’s why the FDIC was able to seize them. If they turned up here they would have been told by the local Bank that they do not have any jurisdiction here and that would need to apply to the local courts. Guess what that result would have been…your money if safe with Cayman Banks unless it’s derived from a crime.
The question I have to ask is why do I have to pay so many fees to withdraw my own money? The banks takes my money and lends this money out in form of loans at very much higher rates. So why am I being charge POS fees, ATM fees and withdrawal fees? This is unethical in so many ways.
so that they can afford to properly implement risk control measures so that they don’t collapse like the “Fin Tech” friendly banks. Traditionally banking have higher costs due to proper risk controls. If you don’t like that go bank your money with another SVB and see how that works out for you
You do not want to leave any money in any Cayman financial institution for this reason.
There is no depositors insurance, CIMA has no idea what they are doing and their is zero oversight on liquidators.
I can almost say with great certainty that most bank in Cayman would fail if there was a run on them.
CIMA would turtle and the vulture liquidators would steal your money.
Most banks anywhere would likely fail if there is a bank run, unless they quickly get funds to meet customer withdrawals.
Great for you to answers the obvious but not respond to the point.
Any bank, anywhere even with government backed insurance as we’ve seen in recent past, will collapse if there is a run on the bank. Not only a “Cayman” issue….
Regional banks are failing. They have FDIC… Cayman has no insurance on deposits or investments.
So keep your money in a Cayman bank and when it gets liquidated you will lose your money plus the 5-8% the liquidators will take.
Keeping our little financial services industry competitive is not automatic and is hard work. Conversations about roads, developments and status holding is only relevant when FS is humming. Seems like Andre gets it.
Andre is so smart that he can travel with a small team and do all the taking. Even if it is the technocrats that should be providing the information.
He is really great at speaking off the cuff. He comes across as knowledgeable. His time spend in the private sector and civil service has really paid off.
Not a genuine person. Cannot trust him. Have a look at who contributed to his political campaign. It explains who is loyalty is to.
Dude is way out of his league. Why is he, and by extension the CI Gov, seemingly taking responsibility for a bank that made bad investment choices, which lead to the loss of BILLIONS of dollars??
Tread lightly son, especially when opening Pandora’s box.
I am very surprised that an educated and principled man like Andre, would be associated with a rabble of self seeking uneducated unemployables like Mac, Kenny, Seymour and Saunders.
Cayman would have a better future if he and Wayne joined Roy and Alden in preventing the spiral of handouts to imported poverty leading us to becoming Jamaica.
Alden and Roy are no better and, in fact, worse. PPM, just like UDP, are done in Cayman. Cannot be trusted by voters not to make things worse.
Maybe because these Nexgen caymanian political hopefuls, are just like the previous ministers they criticise so vehemently. Birds of a same feather flock together.
So why does SVB have a Cayman branch? Certainly not taking any local deposits. Anybody remember the Cayman branch of HSBC Mexico? Nobody ever seems to ask or think about the purpose of these arrangements.
Uninformed commentary by you, poster 12:22 pm.
Obviously, you have no clue of how and why the International Financail Services operates in the Cayman Islands.
It’s spelt “Financial”, not “Financail”.
Ok so you explain it then.
More context here:
https://www.ft.com/content/6a33ac0e-8842-47a5-9448-090bc17a5b6b
Forget it, the US government seized the funds so kiss them goodbye Mr Andre! Let the Chinese sort it out themselves instead of wasting our tax money on all these types of things.
…even more uninformed commentary…..
CIG/CIMA need to/must be seen to support the International Financial Services industry.
Belive me, the International Financial Services pays more to CIG in the form of direct and indirect taxes, fees, levies, work permit fees, hotel rooms, taxis, restaurants, construction (offices, homes/condos), local retail purcahses, avaiation etc. etc, et al than the local populace does.
How do you think we came through the Covid lock down – through the money generalted by the tourism sector???
Its good to know we have at least One Gov minister that is qualified to speak and address concerns at this level.
Oh dear, as far as I am aware the license do not allow an offshore bank to take up
Coal business – hence “offshore”. There assets are not on island either. .At least that is how it was when I was in the industry.
Correction – typo- should have written- “local business” where is the spellcheck police when I need him?
You also should have said “their” instead of “there” too.
True. We don’t have to hang our heads and hold our noses when he represent us on the world stage. Can’t say that about the rest of them.
Suppose you have funds invested in Cayman-based Investments or funds deposited in a Caymanian bank, and the institution becomes embroiled in an investigation by a Caymanian Liquidator. A years-long review will take place. CIMA does not do those reviews in-house. It assigns such tasks to private Liquidators. If this happens, you can forget a significant chunk of your money.
OneTradeX account holders lost nearly 10 million dollars in account assets due to the one-sided and Rolls-Royce-style investigation by Krys Global. This was allowed to happen because Krys always used the most expensive way to do its investigation. Best law firms, QCs, and the most expensive vendors it could find. All charging the highest rates and mark-ups.
Virtually no illegal actions by OneTradeX, just sloppy bookkeeping. But Krys Global was allowed to use account holder funds to investigate. All thanks to a little-known law called Berkley- Applegate.
Your investments are not safe in any Cayman institution because of this law.
If you put your funds in a little known broker instead of a reputable institution to manage your money that’s your failed risk management strategy. Our it could be that you all were just cheap.
Everything works fine in the Cayman banking system until it doesn’t. The foreign investors in SVB whose funds were held in Cayman are screwed and now stand in the general creditor line along with the office cleaning service and anyone else as unsecured creditors. CIMA looked the other way and just pretended that the US oversight by the San Francisco Fed would be sufficient which is clearly wasn’t. The head of the SF Fed should have been fired on the spot but nothing happened. Total incompetence on her part and CIMA a lot of blame to be shared here.🤪🤪🤪
What was wrong on the Cayman ledger for CIMA to have found? In hindsight it amounts to a tiny credit memo of collateral damage. Upset investors that chose badly can take it up with the FDIC complaints desk. Cayman should focus on local legislation to reign in foreign owned class A retail banks that treat our consumer public like gum on their shoe.
Why would anyone have assumed the FDIC would cover Cayman Islands ledgered deposits? Dummies.
Hopefully no Cayman liquidation firms will be involved. Berkeley Applegate… If you know you know.
This will be controlled in the US and rubber stamped here. There’s no real connection to Cayman other than place of incorporation.
Disgraceful performance from CIMA, nearly two months on and they still have no plan.
I’m not expert on the subject, but I believe CIMA’s role is to regulate the banks, of which there’s probably more than a dozen or so. There’s probably someone else responsible for running the bank. And if you’re a customer then take responsibility for putting your money in a bank that was of higher to begin with.
Why don’t you help them out with some of your bright ideas?
Nothing they can do.
Which friends will get this lavish gig this time?
I’m a cayman based funds and hold my long term deposits in a US bank. Wouldn’t trust them down here to hold anything more than $20k. If you know why $20k… you know.
“I’m a cayman based funds”… who can’t string a coherent sentence together.
Stop policing posts.
He’s right though. The Hong Kong depositors in the Cayman bank subsidiary of the failed SVB are unprotected and screwed unless the Cayman subsidiary can somehow be sold off intact instead of being liquidated. No one should keep their money in a Cayman chartered bank. It’s safer in your mattress.