[ad_1]
(CNS): The Cayman Islands Monetary Authority (CIMA) is exploring legal options after the US Federal Deposit Insurance Corp (FDIC) seized deposits held at the Cayman branch of Silicon Valley Bank, The Wall Street Journal has reported. Financial Services Minister André Ebanks met with some of SVB’s depositors in Hong Kong recently and told them that the Cayman regulator had retained lawyers and was looking for ways to help them.
Silicon Valley Bank was shut down by the California regulator in March, and FDIC, the agency tasked with insuring bank deposits, was appointed as the receiver. The bank was purchased by First Citizens Bancshares, with the help of the FDIC, in a deal that drained $20 billion from the deposit insurance fund. The DIF, created to ensure the deposits of individuals, is financed by banks and covered by the FDIC.
According to the WSJ, the Cayman Islands does not have an equivalent to US federal deposit insurance, which covers up to $250,000 per bank account. The current situation, where depositors in the SVB Cayman branch may be left with nothing, could affect where investors choose to put their money.
“The risk perception is going to be higher for someone who has a bank account in the Cayman Islands or wants to open one,” Winston Wong, an attorney at Flint & Battery, a law firm in Singapore, told the WSJ. “From an industry point of view, it sets a precedent. It could disincentivize funds and companies to transfer their funds to the Cayman Islands.”
The meeting with the minister was attended by representatives from about ten investment firms, the WSJ reported. A person who had been at the meeting told the paper that many firms had tried and failed to retrieve their funds during the collapse of SVB and that some people present “voiced unhappiness with earlier statements from both US and Cayman Islands regulators that led the foreign depositors to believe that their funds would be protected”.
CIMA has not commented on the situation since it issued a notice in March following the failure of the bank. In that brief notice, the regulator said it was engaging with the FDIC and other stakeholders regarding the receivership process and its impact on the SVB Cayman Islands branch.
“The Authority understands that the FDIC will soon issue notices to SVB Cayman Islands branch customers regarding the next steps of the process,” CIMA said in March, adding that it would take appropriate action where necessary.
There was no mention of Ebanks’ meeting with SVB depositors in an official press release about the Cayman delegation’s visit to Hong Kong and Singapore last week. It said the trip was about bolstering relationships with financial services industry stakeholders and engaging with various authorities, as well as promoting the Cayman Islands’ intellectual property services.
Minister Ebanks, Deputy Chief Officer Kathryn Dinspel-Powell and Gene DaCosta, the Cayman Islands Government representative in Asia, were in Hong Kong on 14 and 15 May, where they met with local authorities to discuss the requirements to operate a CIG office there. They also attended a number of meetings and roundtables with law firms and industry associations.
The minister and his delegation then joined Cayman Islands Intellectual Property Office (CIIPO) Director Candace Westby and IP Registry Officer Omara Whittaker in Singapore, where they attended the International Trademark Association (INTA) 2023 Annual Meeting, which was held 16 to 20 May.
While in Singapore, Minister Ebanks and DaCosta met with local officials, agencies and law firms on matters related to operating a CIG office in Singapore, as a possible alternative to Hong Kong. They also met with one of Singapore’s sovereign wealth funds and a connected wealth management institute to discuss how to train and upscale local homegrown talent in the wealth management space.
“The week in Hong Kong and Singapore was very informative, provided strong stakeholder engagement, and was educational in a variety of meaningful ways,” Ebanks said in the release. “There are several opportunities in Asia for enhancing Cayman’s financial industry’s market share, as well as gaining insight into various developments in Asia and how Cayman could provide solutions, and learning of methods to cultivate local talent and address certain local challenges.”
DaCosta said he was looking forward to being based in Asia to support the financial services sector and maximise opportunities.
[ad_2]
Source link