The truth is our strongest weapon
An Interview with Eduardo D’Angelo P. Silva, Chairman of the Cayman Islands Financial Services Association (CIFSA) The popular perception of the Cayman Islands can be very much at odds with the reality of a leading international financial center (IFC) with a strong, competent regulatory infrastructure, deep resident expertise in complex financial services like banking, trusts, insurance, investment funds and structured finance, and a reputation in the global financial marketplace as a stable and high quality place to do business. One of the primary goals of the Cayman Islands Financial Services Association (CIFSA), an organization formed in 2003, is to establish effective communication channels with the world in order to ensure that perception more closely matches reality.
Eduardo D’Angelo P. Silva, a native of Brazil, has lived in the Cayman Islands since 1994. In 1996, he was elected to the executive committee of The Cayman Islands Bankers Association and held the office of president from 1998 to 2000. During his tenure, the association developed several training programs, including an anti-mone laundering seminar attended by all bank employees. Silva is one of the founding members of CIFSA and has served as Chairman of its Board of Directors since October 2007.
Q: Briefly describe the history of CIFSA in the context of the Cayman Islands’ development as an international financial center, including milestone events in CIFSA’s evolution to its present position. How has CIFSA’s mission evolved over time?
Silva: CIFSA was formed in 2003 with the mandate to communicate the integrity and quality of financial services in the Cayman Islands to both the global and local marketplaces. CIFSA has become a crucial component of Cayman’s financial services industry. Having obtained a critical mass in its membership over the past year or so, we are now an international voice that has achieved recognition from foreign governments and media. Our mission is to continue building a positive perception of the Cayman Islands as a trusted, experienced, and efficient place to do business. Our success has drawn much attention over the years, and CIFSA’s membership has grown steadily as local businesses see the need for a stronger international voice to ensure that the truth about our industry and jurisdiction is not swept aside by those who wish to see us fail.
The truth is our strongest weapon. Although the global economy benefits from the services we offer, this basic fact never seems to be publicly recognized even though it’s privately acknowledged by most industry participants and politicians.
Q: 2008 has been a watershed year for the global financial marketplace and clearly the industry will continue to experience profound changes going forward. In your view, what is the potential impact of these developments on the Cayman Islands generally and CIFSA in particular?
Silva: It has been a very difficult year for businesses and individuals around the globe. But I think this notion that leveraging itself is to blame or securitization of mortgages is to blame overlooks the more obvious causes of the financial crisis – greed and lack of corporate governance and oversight. In any corporate business, but more so those in the financial sector whose stability and success is based upon trust, the integrity of the Chairman, the Board of Directors, and the Executive is of paramount importance. It is evident this fundamental ingredient was lacking in recently failed institutions.
On top of that, you then have major rating agencies like Moody’s and DBRS giving these securitized loans their seals of approval by qualifying them as good quality debt instruments. Without the assurance of those good ratings, there would not likely have been buyers for these assets. So any attempt to lay blame at the feet of the Cayman Islands for these products is simply an attempt to hide the truth behind the origins of this crisis.
We feel the best way to deal with these challenges is to allow the independent international standard setting bodies to do their jobs and to provide them with the access and information they need to assess our regulation and compliance regime in Cayman. Just this past year, we have seen several independent reports, and even a U.S. GAO report, that have been extremely positive in their assessment of Cayman’s integrity and professionalism.
Now that the U.S. election cycle is complete, CIFSA hopes that common sense and a fair, balanced approach will rule the day. Protectionism and severe new restrictions on the flow of capital are not the prudent responses to this global financial crisis. That could do far more harm than good. By getting the facts out there and having productive discussions with key decision makers and news agencies, CIFSA feels we can then turn our attention to becoming a valuable partner in helping to solve this financial crisis.
