Nassau Conference Speech by CW Littrell
Published: Friday October 12th, 2018
STEPS TOWARDS IMPROVING THE REPUTATIONAL TERMS OF TRADE OF THE FINANCIAL SECTOR
Good morning and thank you for the invitation to the Nassau Conference. Today I propose to speak about how the Central Bank intends to improve the reputational terms of trade upon which our financial sector deals with the rest of the world.
Traditionally, the key elements in a sound reputation are twofold:
- Money entrusted to our care is safe; and
- Information entrusted to our care is also safe.
In the newer world, the key elements for small countries continue to include the need for money to be held and managed safely. The expectation on information, however, is that it is available to any person or entity in the world with a right to ask for it, but unavailable to any person or entity in the world lacking that right. With the rise of the internet, “in the world” now has a literal as well as a figurative meaning.
Finally, and no news to anyone here, there is a strong expectation that Bahamian financial firms will not facilitate financial crimes, including money laundering, terrorism, and tax evasion.
To some extent financial failure, information loss, and financial crime risks can be managed separately, and they each require specialist expertise. The better strategy, however, is for Bahamian institutions to create a comprehensive risk management strategy, within the context of each firm’s business strategy. Similarly, external perceptions of The Bahamas in risk terms combine elements of financial, information, and financial crime risk.
The Central Bank’s approach to reputation management recognizes that a necessary but insufficient condition is that Bahamian risks are well-controlled. In addition to deserving a good reputation, we have to proactively manage our relationship with the world’s opinion makers to achieve that reputation.