Sep 2008 Financial News

Local experts: We can learn from this experience

Sep 16, 2008

A top local banker and three stock market and financial experts yesterday agreed that Trinidad and Tobago could learn valuable lessons from the deepening financial crisis in the United States.

One of them also cautioned Government to slow down its fiscal expenditure or the country could face a similar financial meltdown of its own down the line.

Here's what they had to say about what many international experts regard as the worst financial meltdown in almost a century.

Catherine Kumar, Bankers' Association president:

"What we need to do is learn from this experience, we need to ensure that we do proper risk assessments for investments or credit. There are a lot of sophisticated investment products out there and local banks need to analyse before we invest.

"What happened in the US was they got caught up in securitisation instead of more safer investments. But this happens when you take big risks. We did not get caught up. There is no material impact because we are not involved in that kind of investment but at the individual level, people may be feeling the pinch. There could be some ripple-down effects for us because people will be more wary of new products."

Subhas Ramkhelawan, Independent Senator and managing director, Bourse Securities Ltd:

"Generally in the world, what we are seeing is short-term pain. The financial sector has to work itself out. Individual investors may not be too heavily exposed but what they have to do is to make adjustments if they used international firms (like Lehman Bros) as custodial managers for their investments.

"They will have to make those adjustments early and wait for the dust to settle. This is the time to batten down and ride out the storm. Don't get adventurous."

Joseph Esau, investment expert:

"What we are seeing now is a severe correction and it is difficult to see the end. The big question is how it will affect us.

"There may be another reduction of interest rates in the United States later this week.

"Trinidad and Tobago already has hyper-inflation caused largely by Government expenditure and fiscal policy. This has created excessive liquidity and inflation and unless Government begins to manage expenditure, we could one day be faced with an even greater correction in Trinidad and Tobago.

"If fiscal policy is not adjusted, we could hit a wall."

Wain Iton, general manager, Trinidad and Tobago Stock Exchange:

"Clearly, it's an event of titanic proportions. We don't think there will be too much of a spillover here but psychologically, people will get a flutter when they think about their investments."


Source:
Daily Express
Tuesday, September 16th 2008

http://www.trinidadexpress.com/index.pl/article_news?id=161376413