Customers join banks in support of JDX
Philip Hamilton, Gleaner Writer
MINNA ISRAEL, president of the Royal Bank of Trinidad and Tobago, says her bank's customers have expressed positive reactions regarding the proposed debt-exchange programme between Government and the financial sector.
These reactions, Israel disclosed yesterday at a Gleaner Editors' Forum, were from investors who use government paper as collateral for other loans.
"People were calling and writing emails to find out how do we bring
Israel said customers, while acknowledging the initiative would reduce income earned from interest,
She said her bank had also looked at bonds being used as collateral to determine the customer's capability to service the debt.
National Commercial Bank Group Managing Director Patrick Hylton said while his bank did not see the initiative posing any issues in terms of the reduction in interest rates, it was likely to affect pension funds.
"Of course, it is likely to affect persons who would have invested in those instruments based on a certain income expectation based on their own lifestyle issues. That's an issue everybody faces when there are increased taxes," said Hylton.
Scotiabank CEO Bruce Bowen agreed with Hylton, pointing out that the action would cause a reduction in actuarial reserves.
"Where trustees of a pension fund felt that they had enough security and income in that fund to meet their obligations to pay people's pensions, there will be less assurance tomorrow than there was today, and that's a reality," said Bowen.