T&T is well positioned geographically to have a vibrant financial sector, says Professor John Board, dean at Henley Business School in the United Kingdom.
“I am not an expert on the south Caribbean markets but my understanding is that T&T is much more sophisticated in its financial services than the rest of the region. It is a much-more-developed economy. It faces an interesting problem from South America and elsewhere which provides real opportunity for T&T, given the political upheavals in some of the other South American countries. There is an opportunity for T&T to have a real vibrant sector,” he said.
Board, who spoke to the T&T Guardian yesterday on the sidelines of a seminar on financial regulation at the Arthur Lok Jack Graduate School of Business, Mt Hope, said with diversification of the country’s economy the financial services sector is a good area to get into.
“If you look at the political situation in Central America and the northern part of South America, like Venezuela, Colombia, Ecuador and so forth, some are coming out of darkness, some are going back into it. But even in the ones that are retreating politically there is money there that has to go somewhere and so allowing trade to take place should give T&T the chance to grab that opportunity,” he said.
Board said despite T&T’s small size regulating its financial markets is no different from developed countries: “The fundamental problems of any financial service sector are similar. It is always a mistake to say that we are small and we have nothing to learn from the bigger more supposedly sophisticated markets. Getting the right technology and the right people and ensuring that the right people are professionally driven is a common problem.
“The thing that affects small financial services, which are slightly different from elsewhere, is the fact that they are small and therefore the markets are less liquid. It is common in some of the smaller islands where it is hard as you have shares to sell and you cannot find a buyer. The behavioural problems are pretty much the same. It is a mistake for people to back away from analysis of smaller markets.”
He said regulators need to use the same principles in regulating smaller markets.
“Clearly in London the way in which the regulation is specified and the amounts of overhead you need to monitor the market would be inappropriate in T&T but you need regulators who understand the markets, who understand that regulation is not just a legal question. The problem of the influence of the big traders and the big banks have on the regulatory system is there all the time. The principles of regulation are common all across the world,” Board said.