The Bank of Guyana (BoG) yesterday said that rumours of a billion-dollar bail-out of GBTI were false and it decried what it said were deliberate attempts to sow public mischief which have also led the police to launch a probe of the authors of the blog which first carried the allegation.
In a statement yesterday, the BoG said it “categorically denies that it has been approached by the Guyana Bank for Trade and Industry (GBTI) or any of the licensed financial institution(s) for liquidity support”.
It pointed to the offending report on the internet and another carried on the newscast of VCT Channel 28. The reports came amid jitters in financial circles here over CLICO (Guyana) being placed under judicial management because it was unable to retrieve 53% of its assets from CLICO (Bahamas) which was ordered liquidated by the Bahamas Supreme Court on Tuesday and exposure by Hand-in-Hand Trust to the Stanford Group meltdown to the tune of just over $1B.
The central bank, which is the supervisory authority for all licensed financial institutions, says that it is “satisfied that the financial and liquidity positions of the licensed financial institutions are strong.” The release from the BoG stated that “these institutions have consistently met our requirements on the capacity adequacy ratio and have exceeded the liquid asset and reserve requirement ratios, where applicable.”
In the case of GBTI with assets of $50 Billion, its capital adequacy ratio of 16.83 percent at the end of last month, exceeds the international benchmark of 8 percent and is higher than the average for the banking sector of 15.19 percent. The Bank of Guyana stated that all reports which say otherwise are misleading and should be disregarded. It encouraged the public to peruse its website at www.bankofguyana.org.gy to monitor the relevant ratios.
It said that it wished to assure the public that it will continue to pursue steps to ensure that the financial system remains safe.
The Government of Guyana also weighed in on the GBTI media reports. In a statement via GINA it denounced the report that was aired on Thursday’s edition of the Evening News on VCT Channel 28 and livingguyana.blogspot.com. The blog also carried comments about Citizen’s Bank which the government said were also not true.
According to the government, these views are “unsubstantiated and baseless” and are “highly irresponsible.”
The Government condemned what it classified as “a coordinated attempt to cast aspersions on the strength of its financial system.”
Similar thoughts were echoed by President Bharrat Jagdeo during a visit to West Demerara yesterday, the National Communications Network reported last evening in its newscast.
The government reiterated the position of the Central Bank and said that Guyana’s financial system continues to be stable and the financial institutions operating in Guyana remain well-managed and financially sound.
Meanwhile, the police have also become involved in the matter. A statement said the force is investigating the Living Guyana blog as posts containing erroneous statements about two local banks were placed on that site.
According to police, the force acted after it received a complaint from GBTI concerning the article posted on the website livinguyana.blogspot.com alleging a bail-out approach to the BoG. Upon investigating, the police discovered a second article on the website which contained erroneous statements about Citizen’s Bank Guyana.
The Police said that these acts were “erroneous” and “wicked” and stated that they were “intended to cause public mischief.”
The police said that an investigation has been launched to verify who is hosting this website and to pursue any information which surfaces during the investigation. The release stated that both international and local agencies have been contacted for assistance in this investigation and added that if it is determined that the law has been broken anonymity will not exonerate anyone from the consequences.
The blog has since issued an apology and stated that the posts were as a consequence of a misled source. According to the blog “there was no application to the Central Bank by the Guyana Bank for Trade and Industry and there was no internal run on Citizen’s Bank by staff. It added that “it was a nasty rumour started by someone who capitalized on their position and the prevailing financial climate which was worsened yesterday with the (judicial) takeover of CLICO Guyana.” The blog said that the stories were false and stated that these were “nasty rumours” that they were duped into posting.” The blog promised “to be more circumspect in future, particularly when blogging on issues as serious as these which affect the wellbeing of so many.”
The Living Guyana blog, which is authored by the self-described Guyana Media Critic, says that it “delights in violently bludgeoning the mere minor indiscretions of hardworking Guyanese media operatives and occasionally politicians as well.”