Saint Lucia Development Bank needed at this time

CASTRIES, St. Lucia – Officials of the newly re-established Saint Lucia Development Bank (SLDB) are asserting the necessity for such an institution on island at this time.

According to the Managing Director of the SLDB, Jean Francois Sonson, there is a fundamental difference between a commercial bank and a development bank.

“A commercial bank is basically established to provide certain personal and commercial banking services to persons. Those banks are owned by shareholders who are looking for increased value in their shares, so commercial banks are driven by and large by a profit motive. On the other hand, a development bank, as the name implies is a bank that is concerned about providing services that will facilitate development of a country,”said Sonson.

These services, Sonson said are a mix comprising financial, technical and management services.

In essence, he said it is like hand-holding. Clients are provided with the types of reinforcing services not available from commercial banks. Thus, there are many more risks involved.

“I believe there is need to ensure that there is proper regulation, and I’m sure given what is taking place in the region now, the ECCB has been promoting central regulation of a number of different financial institutions, that of course would come to the fore—not just commercial banks, but development banks, credit unions and so on. If there is one thing that is coming out of the international financial crisis is the need for regulation of the financial system,”said Sonson.

Regulation by the Eastern Caribbean Central Bank (ECCB) has been exemplary to date, Sonson said, and that is partly why the region has not suffered as gravely as other parts of the world.

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