Statements from Sir Dwight Minister Lovell and PM Spencer on ABI Bank

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Banking

Saturday, 23 July 2011 19:38

By press release

The Eastern Caribbean Central Bank and the Government of Antigua and Barbuda today announced that the ECCB has assumed control of one of Antigua’s indigenous banks the Antigua and Barbuda Investment Bank.

We present below statements from the Governor of the Eastern Caribbean Central Bank Sir Dwight Venner, Finance and Economy Minister of Antigua and Barbuda and Prime Minister the Hon. W. Baldwin Spencer:


STATEMENT BY THE GOVERNOR OF THE EASTERN CARIBBEAN CENTRAL BANK
RE

The Eastern Caribbean Central Bank (ECCB), after due consultation with the Monetary Council has been directed to exercise the powers conferred on it by Part IIA, Article 5B of the ECCB Agreement Act 1983 and has assumed control of the ABI Bank.

Close monitoring of the bank has revealed difficulties in carrying out its normal functions due to an inadequacy of liquid assets and an inability to meet the statutory reserve requirement.

After consultation with the Government of Antigua and Barbuda, the Board of Directors of ABI Bank and the banking community in the Currency Union, the ECCB recommended to the Monetary Council that in order to restore the Bank to normalcy as quickly as possible, the ECCB should assume control.



The Monetary Council, after extensive deliberations, acted decisively by approving the recommendation which has been implemented as of today 22 July 2011.

In taking the decision, the Monetary Council took into consideration, the following:



The continuing impact of the global recession

   
The CLICO/BAICO issue

    
The rescue of the Bank of Antigua, and

 
The top priority assigned to financial stability in the Currency Union.

With the assumption of control, the affairs of the bank will be carried out by Central Bank staff, current ABI Bank staff, with the support of a dedicated group of bank specialists who together would give their undivided attention to the restoration of normality at the ABI Bank.

We ask all depositors and creditors to bear with us while we address the problems with which the ABI bank is now faced.

The role of the ECCB under the powers granted to the Central Bank is to protect depositors and creditors.

Let me remind you that through our intervention of the Bank of Antigua no persons lost their deposits and the institution which replaced it is now functioning normally.

On that occasion, I pointed out that banks are not warehouses where your money is permanently stored.

The money needs to be lent out so that the bank can earn a sufficient return to pay interest to the depositors, compensate staff and earn a profit.

If demands for money are made by everyone at the same time it will be impossible to meet them all.

 We therefore once again crave your indulgence and patience so that in an atmosphere of calm and objectivity we can apply ourselves to the successful resolution of this problem.



Normal banking operations will continue at the various branches of the bank and no disruption of activities is contemplated.

We will therefore proceed to carry out our functions with the utmost professionalism which is expected of us and with the confidence of the public in our ability to do so.

22 July 2011

STATEMENT BY THE HONOURABLE HAROLD LOVELL
MINISTER OF FINANCE AND ECONOMY
RE

The Eastern Caribbean Central Bank today assumed control of the ABI Bank, exercising the powers conferred on it by Part IIA, Article 5B of the ECCB Agreement Act 1983.



This action has been taken after extensive discussions between the Government of Antigua and Barbuda, the Monetary Council, and the ECCB, all of whom have been closely monitoring the situation at ABI Bank over time.



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ABI Bank’s ability to meet its statutory obligations and to carry out normal banking functions has been challenged because of insufficient liquid assets. 

Accordingly, and in consultation with the Board of Directors of ABI Bank, the Banking Community within the Currency Union and the Monetary Council, it was decided that the ECCB should assume control of the Bank.



In agreeing to this course of action the Government was particularly mindful of the current economic conditions in Antigua and Barbuda, the lingering effects of the global recession, the CLICO/BAICO issue, and the best interests of depositors with ABI Bank.



We also took into consideration the successful Bank of Antigua rescue, and the need to maintain financial stability in Antigua and Barbuda, and, by extension, within the Currency Union.

The affairs of ABI Bank will now be carried out by ECCB staff, with the support of a dedicated group of banking specialists and the current staff of ABI Bank.

Together, they will resolve the issues that led to this action, and ensure the continued operations of the bank.

The Government of Antigua and Barbuda will continue to work with the ECCB to ensure that all steps are taken to protect the interests of depositors and creditors of the ABI Bank.

We ask for the support and patience of depositors and creditors of ABI Bank and the understanding of the public in general during this time.

 We are confident that our collective actions will restore the bank to normality, and maintain stability within the banking system.

Let me reassure you that the Government of Antigua and Barbuda is fully committed to resolving the issues at ABI Bank and preserving the banking system.

22 July, 2011

Prime Minister
 The Honourable W. Baldwin Spencer
Statement

Fellow citizens and residents of Antigua and Barbuda.
 
The ABI Bank, as we know, is one of Antigua and Barbuda’s indigenous banks and is duly licensed to conduct banking business in Antigua and Barbuda under the Banking Act No. 14 of 2005 of the laws of Antigua and Barbuda.  The bank has served the citizens and residents of Antigua and Barbuda for over twenty-one years starting on 1 March 1990 and has done so very well.


In recent times, however, the ABI Bank has been experiencing difficulties in carrying out its normal functions due to an inadequacy of liquid assets and the capacity to manage the institution at this juncture.
 
The Government of Antigua and Barbuda, the Monetary Council and the Central Bank have been closely monitoring the situation.

Accordingly, after careful consultation with the Board of Directors of ABI Bank and the banking community in the Currency Union, it was agreed that in order to ensure the continuity of banking operations, that the ECCB should assume control.



In taking this decision, consideration was given to the continuing impact of the global recession on the economies of the ECCU and in particular Antigua and Barbuda; the fallout from the CLICO/BAICO issue; the Bank of Antigua rescue; and the top priority which is given to financial stability in the Currency Union.
 
With the assumption of control, the affairs of the bank will be carried out by Central Bank staff, with the support of a dedicated group of bank specialists and the current staff of ABI Bank, who together would give their undivided attention to ensure the continuity of normal banking operations.


The Government of Antigua and Barbuda and the Central Bank continue to work together very closely to ensure that all steps are taken to protect the interest of depositors and creditors of the ABI Bank.  As demonstrated in the successful intervention in the Bank of Antigua, with your patience, your faith and your support we can resolve these issues. 

I therefore appeal to all depositors and creditors to bear with us while we sort out the problems with which the ABI Bank is now faced.
 
Let me assure you that the Government of Antigua and Barbuda is fully committed to preserve the safety and soundness of the banking system in Antigua and Barbuda and we are confident that the collective actions taken by the Government and the Central Bank will serve to maintain your confidence in the bank and the financial sector as a whole.
 
The Government of Antigua and Barbuda pledges its full support to the Central Bank in its efforts to resolve the challenges facing ABI Bank. The Government’s commitment to financial sector stability is resolute and firm. 


As Prime Minister, I consulted with the Leader of the Opposition, the Hon. Lester Bird and Chairman of the Antigua Labour Party the Hon. Gaston Browne on this development and have received broad support for the intervention in returning normalcy and stability at ABI Bank and in the banking system generally.
 
I appeal to the citizens and residents of Antigua and Barbuda for your continued support and trust at this time.
 
Thank you.

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