Last night you saw our interview with the former governor of the Central Bank, Glen Ysaguirre sharing his analysis of this week's seismic shift in the banking sector where the Belize Bank's ownership group acquired Scotiabank Belize.
Ysaguirre said that there are possible pay-offs and perils in such a move, and one of the perils could be hard currency transfers which could affect the banking system.
Now, the current governor of the Central Bank, Joy Grant, who succeeded Ysaguirre has said this will not happen. But, we looked deeper into the numbers at Scotiabank's massive store of more than 100 million dollars in retained earnings - and asked Ysaguirre whether this could cause a drain on hard currency:
Jules Vasquez
"There are large amounts of retained earnings that Scotiabank has accumulated. The specific statements we're talking about is the one that we saw on the "Market Watch." The long and short of that is allowing BNS to extract US dollars from Belize over time following closing of the acquisition and then the Governor's statement on the other hand which says that the Central Bank will ensure that foreign currency already in the systems is not used for the purposes of of this sale."
Glen Ysaguirre - Former Governor, Central Bank (2008-2016)
"If I am to take what the Governor said, I am thinking that she is saying the initial 35 million dollars to buy the shares will not come from local sources. Fine, but what Market Watch is saying in terms of that deposits and sale of US dollar transaction, I want to think that has to be addressing the point you raised earlier about the significant amount of built up retained earnings that are sitting there. There's no way I think Scotiabank is going to leave that there. So there has to be something that will happen after the acquisition as to how that built up retained earnings will be traded and extracted over time by Scotiabank. That has been a long standing problem that the Central Bank has faced as to how can Scotiabank source the US dollars for that, for the repatriation of earnings over the years."
We'll have a little more of our conversation with Ysaguirre in tomorrow's newscast.,
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