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USVI governor hosts meeting on international banking entities
Published on November 15, 2012 Email To Friend    Print Version

ST CROIX, USVI -- Governor John de Jongh met recently with parties interested in establishing international banking entities (IBE) in the US Virgin Islands. The meeting is part of the continuing effort of the administration to seek new investors and new capital into the territory to help stimulate economic growth during the current period of financial distress.

“The limited purpose banking law will provide the Virgin Islands and particularly St Croix, with a new revenue stream for capital which will allow new economic development to occur,” de Jongh said, noting that there is no competitive disadvantage to commercial banks currently operating in the territory due to increased interest requirements for the IBE’s and as a result of first right of refusal provisions in the bill.

There are fifteen different kinds of financial service businesses that IBE’s can participate in which will expand the market to EDC type companies and attract additional business to the territory.

“IBE’s will provide for increased job opportunities based on revenue growth -- the greater the business grows, the more employees are required,” de Jongh said explaining that this differs from traditional EDC requirements.

The governor noted that non-depository banks, while still having a secure level of federal oversight, have less regulatory costs than traditional banks by not taking deposits. Also, he pointed out that any loans made by an IBE poses no risk to the consumer or the government as all risks are borne by the international banking entities.

De Jongh explained that any regulatory audit or compliance costs will be borne solely by the applicant as outlined in the enabling legislation. “The Division of Banking and Insurance will collaborate with the Economic Development Commission to develop the application and conduct the required background investigations.”

The governor further noted the growing interest since Act 7390 was signed into law in September. “Nearly one dozen individuals have expressed an interest in applying to become an IBE. Our intent is to have the program up and running by January 2013, and we have already begun the process of drafting rules and regulations.”
 
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