It's the other way around. The Bahamas has stood firm and not adapted and as a result there is massive shrinkage of the financial services. Cayman (which is not a country, but still belongs to Britain), has always done a yes-sir, no-sir, three-bags-full-sir and has always complied (albeit in ways that the OECD and FATF haven't fully liked an appreciated) but they make it work. In December the Cayman parliament enacted a bill for Economic Substance (no implementation yet, they are figuring that out), but they appear to comply, and all the while, diversify their economy into technology. They just had a 4 billion dollar influx with a blockchain startup. The Central Bank would salivate to see $4 billion in cash show up on our shores, It would bolster the reserves like nobody's business. If Kwasi hadn't been such a dumbass and actually established Grand Bahama as a tech hub, that could have been us. Instead, they sittin' on their hands wondering what to do next.
The other point that contrasts us to Cayman, is that they see the Economic Substance Act as a business opportunity to grow the economy. If the OECD wants more than a brass plate, how about these companies doing HR in the Cayman, with Cayman staff, as an example. They make lemonade out of lemons, but the bozos in our government is too stupid and uncreative to see that.

It is the Central Bank that controls and maintains the peg to the US Dollar. They do this through the reserve mechanism. The Central Bank must maintain US Dollar reserves to maintain the peg. Back in the day, we had a Currency Board and the Bahamian dollar was convertible, meaning one to take it to any bank anywhere and trade it for other currency. After the government of the day discovered debt, and maintaining a 1:1 USD reserves with the Bahamian M1 money supply was impossible, it was decided to set up the Central Bank and the reserve system. The Central Bank is the governing authority and to maintain reserve levels, they control the discount rate, the interest rate, currency outflows through exchange controls, bank liquidity measures and whatever John Rolle thinks would maintain the reserve level without being a too-blatant shell game. The reason that I say this, is that suppose the government borrows US Dollars and the note is held by the Central Bank, since it is denominated in USD, it is counted as part of the reserves. Another metric of the reserves that I have heard, is maintaining a 3 month amount of money to service the Bahamian economy for food imports, etc, but I haven't seen a monetary policy document in a long time.

I think that the peg is not sustainable. I think that it is artificial. I think that for now it works because of suasion. But suppose another major hurricane hit, and hit Nassau hard. In conjunction, suppose the national debt was way above the annual GDP and the government was still running deficits. We would have to borrow a billion or more to re-build, and it would have to be in hard currency, and the world bankers would exact a heavy price. It would be collateralized as junk bonds and due to the high interest rate and onerous payback schedule, it would trigger a devaluation because the reserves would have to allocated to the immense hard currency debt.

Having said that, purely as a comment, I read an economic dissertation that asserted that if the Bahamian dollar were to trade freely against the USD, it would be in the range below 25-35 cents US based on economic indicators alone.

Their billion dollar cash holdings were not replaced in the banking system. Hence the verified shrinkage of the capital under management figure,and the decline of the economic sector. The number is actually larger than reported here.

It's embarassing that Neil even calls on him. But Neil has really embraced the Bahamian way. He is a stenographer now instead of a reporter, and makes a phone call to generate a story. This een news. It's all an opinion piece. Time to pull Neil's work permit and get a real reporter in.

I offer a slightly different view of the decline of Financial Services in the Bahamas. This view is garnered from my experience. in 2010, two billionaires who's portfolios was handled by my wealth management group, liquidated all of their Bahamas holdings and moved to other jurisdictions. One sold two homes in Ocean Club Estates on Paradise Island for millions. Along with the real estate, he sold two helicopters and all of his vehicles. He moved his holdings back to a tax jurisdiction (Switzerland) and became a EU-taxed citizen again. The second one moved his primary residence to Colorado (I don't understand it either, but his trophy wife wanted to live there).

It was my job to do the exit interviews, and they both had the same complaints. It was due to our financial infrastructure. Cheques took forever to cash. Investment (stocks/bonds) had to go through intermediaries. Moving money was a hassle. Bahamian-located wealth managers did not have the expertise for sophisticated transactions and investments. All of the lawyering had to be done offshore because of the closed shop here, and lack of sophisticated knowledge of the Bahamian legals for law in the global village. Boutique banks had correspondent privileges and the compliance team took forever to clear transactions. Mention the word "Bahamas" and AML/KYC compliance officers around the world lit up and held transactions. That experience was my come-to-Jesus moment where I decided that I needed to do something to protect my career (hence I am no longer on island).

It wasn't the OECD and FATF and FATCA that did us in. It was us. I remember when Prime Minister Crisco Butt unexpectedly won power by defeating Prime Minister Hubiggety. He was a complete horse's azz, but one of the things that he did, was appoint all of these commissions. Of course, they all went away and made recommendations, but Crisco Butt did sweet eff all with them. One of them was chaired by Brian Moree who made sweeping recommendations to revamp financial services. The financial services and lawyer professionals roasted his nuts and almost crucified him. If we had followed his recommendations, we would be right up there with Cayman. Cayman was blacklisted too, and they never told the OECD to eff themselves. They revamped the industry and it grew. Us -- we wuz backwards and slack because the fat cats liked it that way. So the industry itself along with the corrupt legal profession, shot itself in the foot.

The rest of the country is the same way. If you want to cast blame on who is responsible, it is us. Slackness everywhere.

Not really. The die was cast with Lyndon Oscar Swindling. There are still a whole bunch of ignorant sheeple who are still unenlightened enough to not recognise this. Once we prosecute the PLP as a criminal organisation and the populace is fine with that, then we will excise the cancer from The Bahamas.

The trouble is that too many Bahamians from all walks of life benefit from the corruption, backwardness and slackness that is prevalent in most of the population.

The only people that I see thriving are the web shop bosses and politicians.

Give the guy a licence and let him export to Canada.

The interesting thing about this whole sale, is how it is going to take place? Trinidad has currency restrictions where hard currency such as American and Canadian dollars are not allowed to be sent out of the country in large amounts. BNS will not accept TT dollars (currently trading at 7:1 USD) and I know of many companies that are being stiffed by entities in Trinidad, and even the Trinidad government is not paying its overseas and foreign bills.

Various economic pundits have predicted that Trinidad is going the way of Venezuela. Somebody is getting paid off to allow Republic Bank to do this sale. Corruption is rife.

Most international bankers with 20+ years of tenure have left. There are currently 6 small banks for sale in the Bahamas, and no offers except some have lowball ones from CFAL et al.
It's gone -- all gone. Just the carcass left. We dodged a bullet with Scotiabank, but not for long. Financial services is dead man walking. It has been devolving for years. And yet, he have not kept up with fintech developments.
But it doesn't matter any more. Due to global warming, the Bahamas will be mostly underwater in the next 25 years, with a severe depopulation effect. Bahamians will become migrants. The people with resources will be living in South Carolina, and the poor people will be living in Cuba.

This property fund is a shell game.