When a state passes a law that allows an independent body to become above its national and constitutional control it is a time for concern.
When that state is also the rogue, failed state of Antigua & Barbuda, with its dubious history of money laundering, banking impropriety, links to international crime and haven for fugitives, the alarm must be magnified and multiplied.
On the eve of Christmas 2013, Caribarena.com reported that The House of Representatives of Antigua & Barbuda, under the direction of its Attorney General, had quietly passed the Eastern Caribbean Central Bank (ECCB) Act 2013, which created a provision in the ECCB Agreement Act without amending the agreement.
It seems that previously the only way the existing agreement could have been changed was by amending the schedule through a Resolution.
Attorney General Justin Simon QC claimed that "Upon publication of a notification that the Central Bank would be intervening in the conduct of the affairs of the bank, persons who have legal action against the bank, or persons who intend taking legal action subsequent to the notification, their actions would have to be stayed.
The amendment seeks to suspend the exercise of any right of claim of a creditor, shareholder, depositor, and any other person, as well as the initiation of any action, execution, or other proceedings, or seek to enforce any agreement or order against the financial institution until a notification is published to discontinue the bank's exercise of control over that financial institution, or unless a court directs otherwise."
Simon added. "That was a lacuna in the law. It is expected that this amendment will be made not only here in Antigua, but throughout each of the islands of the Eastern Caribbean, because the Banking Act is identical in each of the territories, and the Banking Agreement is considered to be an international treaty, binding the territories in respect of that," continuing that legislation in each territory gives enforcement to the agreement as a treaty.
The Attorney General contends that this is necessary because the Central Bank cannot intervene and run the operations of a bank and deal with litigation, adding this creates uncertainty and confusion, and interferes with swift operations by the Central Bank, "so that it can sooner address the issues and allow the bank to be back on its feet again by itself."
Highly significantly Simon justified the change "because we are part and parcel of a single monetary system," saying that an just like you have the Fed in the United States or the Central Bank of England, which controls their various banking operations, our Eastern Central Bank, with headquarters in St Kitts, has control over our monetary institutions and particularly our banking sector."
The UK & US institutions he mentioned are nationally-controlled economic and regulatory mechanisms that are far removed from the ECCB, which is a supranational organisation similar to the European Central Bank, based in Germany,that controls the affairs of numerous independent European & Scandinavian countries.
As with many things, such as the principles of expropriation, Justin Simon QC, seems content to blur the lines, this time between regulation and ceding national power
All of which would be done, according to Simon, in the interests of financial stability to ensure that the banking system continues to remain stable, with a strong currency system, currently pegged to the US dollar and, of course, has nothing to do with the hemorrhaging of national power to an outside central authority!
After all it is a bit inconsiderate to interfere when an unelected central body wishes to divvy up the spoils of a failed private institution, such as Stanford's Bank of Antigua, only to be frustrated by depositors and creditors desperately trying to get their own personal money back.
Given the announcement by Barbados, often heralded a model of good governance in the Eastern Caribbean, that it will lay-off over 3,000 public servants in January as a first step to reduce its expenditure and national demand for goods/services, amid questionable Caribbean bank performance and mindful that Antigua & Barbuda has one of Caricom's highest debt-to-GDP ratio at 95%, the ECCB may be leaping into action sooner rather than later
Could this be the real reason for the quiet, timely entrance of the Act?
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