Garth Rattray

Some banks have taken the initiative to form a coalition against unregulated investment bodies and spuriously labelled cheques drawn on the accounts of those entities as 'suspicious'. Acting upon the suggestion of possible money laundering is an attempt to block investors from receiving the benefits of transactions carried out by those institutions.

The banks are crying foul about the investments and profits being made by multitudes affiliated with unregulated, untaxed and unsecured 'alternative investment institutions' while failing to look within themselves for the answers to why people are willing to put some of their hard-earned monies at such risk. Banks are in business to make money but the general perception is that they rapaciously hoard wealth for themselves and leave their customers/clients twisting in the wind. When the interest rate on loans is three to four times the interest rates offered on savings, banks engender animosity. When banks pile on hidden fees and add-on cost to loans and then claim to offer their 'valued customers' a special reduction in lending rates that turn out to be less than one per cent, they invite hostility.

Dirt-cheap interest rates

When people hear that a certain bank executive purchased a motor vehicle for around $25 million, they must believe that the distribution of bank wealth is skewed. When bank employees are charged dirt-cheap interest rates on loans (and that's great for them) but customers must pay around 24 per cent APR - the natives will become restive. People are desperately trying alternative means of survival because they are convinced that the banks are not seeking their best interest (pardon the double entendre).

Banks need to improve the interest rates on savings and lower the lending rates. They need to lobby for a reduction of taxes on savings, offer more high-risk-high-return investments and distribute their profits more evenly.

Many bank personnel invest with unregulated (high-risk) entities. They, like most others, transfer their profits into low-risk bank accounts and investments. The banks are benefiting from those transactions, but, I suspect that their loans departments (more than anywhere else) are feeling the pinch.

What the poor need

This entire saga proves that what our people need most of all is financial security. Some rich people invest out of greed but most people invest to improve their lot or merely to survive. People don't necessarily wish to become wealthy; they just don't want to suffer. This is one of the main reasons why people migrate in droves. This is one of the reasons why people commit blue-collar and white-collar crimes. This is why we have so many so-called business people 'trying a thing' out there. Financial security can provide food, clothes, housing and health.

At about 71.4 Jamaican dollars to one U.S. dollar, our currency probably cost less than Monopoly money. Our people earn in Jamaican dollars but purchase everything, except labour and services, in U.S. dollars. And, if they somehow manage to scrape some savings together and entrust it to a regulated entity (a bank, for instance), they get ridiculously low interest rates. Then, to add insult to injury, they are hammered with taxes and bank charges! Even regulated, so-called high-interest-bearing bank accounts offer such low returns on savings/investments that no one can exist for any appreciable length of time on those measly sums.

Ideally investment institutions should become regulated and taxed accordingly. Until then, people who invest in Cash Plus et al should keep them viable by avoiding a panicked run for their monies. For many, such entities represent the last possible hope of achieving their goals in life.