No evidence of price fixing

He made this observation during a public inquiry held by this JSC at Tower D of the Portof- Spain International Waterfront Centre. Responding to a question from Government Senator W Michael Coppin, Hilaire said, “We don’t have evidence of this directly but we could consider in a small country, in a situation like the financial sector you could have, price leaders.” He explained this phenomenon could involve an institution setting a particular benchmark and others following it. Hilaire said he did not view the profits being made by financial institutions in TT as supranormal in any way. In response to another question from Coppin, Hilaire said he could not single out any commercial bank which was more dominant as compared to other banks in TT.

The Governor explained that the secrecy provisions in the Central Bank Act and good business practice prevent him from doing so. However, Hillaire said, “ I could say there are certain banks that would have more dominance than the others.” He stated this was because not all banks have the same clientele or offer the same services. Hillaire said this would result in difference in the type and reach of commercial banks in TT.

With eight commercial banks already operating in this country, Hilaire said the view has been expressed that, “ we already have too many banks in the system.” The Governor said while the banks must be profitable, they also understand that they offer a public service to their customers and have contracts with the Central Bank to that effect. Stating the Central Bank treats the issue of licences to financial institutions very seriously, Hilaire declared, “We don’t give licences just like that unless we think this institution would be solid and would be responsible. That puts a cap on the number of banks that can come in.” Hilaire said the Central Bank has a special Information Technology (IT) team which communicates regularly with commercial banks on how to strengthen security breaches that are IT related. He added that discussions on other areas of security with the banks also take place. Acknowledging concerns raised by Housing Minister Randall Mitchell and St Augustine MP Prakash Ramadhar that banks do not appear helpful to more vulnerable persons in society, Hilaire said the Central Bank also speaks with banks on these issues.

He explained that while the Central Bank cannot police commercial banks, members of the public can raise concerns with the Bank and it will see what could be done. Hilaire added that this was a balancing act and a situation where the cost of financial services is too high, is something which must never happen.

He said in such a scenario, people “will go outside of the traditional banking system” and this could have certain risks for them.