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BRITISH BANK QUITS DOING BUSINESS WITH CAYMAN

Finance 24 Jun, 2021 Follow News

BRITISH BANK QUITS DOING BUSINESS WITH CAYMAN

By Staff Writer

 

A Cayman Islands client of a major international bank has written to the government expressing concern over the reason given and the wider implications for Cayman as a banking centre.

The client, a member of the Cayman Islands clergy, had complained to the bank over its decision to close the account held with the bank for 40 years.

In correspondence seen by Caymanian Times, the UK bank in question confirms that it had terminated relationships for clients resident in the Cayman Islands, saying its decision was made after reviewing the countries that it can provide banking services to.

"We have found that not all countries are viable considering increasing regulatory and legislation changes. We are no longer able to provide banking services to clients resident in the Cayman Islands."

Stating that its June decision "will not be reconsidered” the bank, in which the British government is the major shareholder, advised the client to make alternative banking arrangements.

The aggrieved client has now referred the issue to the Cayman Islands government citing “the reputational damage the reason for this move will do to the Cayman Islands, rather than because of the personal inconvenience it will cause me.”

“Accordingly, I'm sending you all this further email which has in it the address of the Channel Islands Financial Ombudsman, should this be of help in anything you may wish to do to mitigate the damage to the Cayman Islands that this new policy is likely to cause," he said in an email to Hon. Finance Minister Chris Saunders, Hon, Attorney General Samuel Bulgin and the Cayman Islands Monetary Authority (CIMA).

While the UK bank has included Cayman among countries it considered not viable considering increasing regulatory and legislation changes, it did not specify what the shortcomings are.

Cayman has been under pressure from EU regulators and the Financial Action Task Force and has passed a raft of legislation to meet their compliance demands.

Last October Cayman was removed from the EU’s ‘blacklist’ of ‘non-cooperative tax jurisdictions’ which it was placed on nine months earlier in February.

However, pressure has persisted from EU and other sources which campaign against what they regard as 'tax-havens', a term rejected by Cayman officials as derogatory.

Cayman’s offshore financial services sector, a key pillar that has been propping up the economy especially during the pandemic, was strongly defended against external pressure across the political spectrum during this year’s election campaign.

It is not yet known what the government’s response has been to the issues raised by the clergyman whose account was closed by the British bank for the reasons stated.

The UK government has over 50 per cent stake in the bank in question resulting from its intervention to save it during the 2008 financial crisis.


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