Oct. 2, 2008 – Unlike some of their counterparts on the mainland, the territory's banking and insurance industry is on firm footing. Lieutenant Gov. Gregory Francis said in a press release issued Thursday.
"It's comes back to the banking industry being relatively conservative," Shawna Richards, spokesman at the lieutenant governor's office, said Thursday.
Local financial institutions have not engaged in practices that are threatening the solvency of many banks across the United States, Francis said.
Francis oversees the Banking and Insurance Division and chairs the Virgin Islands Banking Board.
Data indicates that the territory's banks have not issued any residential sub-prime mortgages and that foreclosure rates throughout the territory are among the lowest in the nation, he said.
The financial industry on the mainland is in such bad shape the U.S. Congress is working to bail it out.
The Banking and Insurance Division keeps tabs on banks and insurance providers in the territory to ensure they remain in sound financial standing. Banks are required to file various reports quarterly, semiannually and annually. Richards said the quarterly report has to do with the number of mortgages issued and the number of delinquent mortgages. She did not have figures on the number of delinquent mortgages.
John McDonald, director of the Banking and Insurance Division, said the division is closely monitoring the national banking and financial services industries as part of its regulatory responsibility.
"We are paying close attention to the impact on the local market," Richards added.
McDonald encouraged people who have questions about the financial condition of their bank or insurance company to contact those organizations directly. However, the Banking and Insurance Division does investigate complaints, Richards said.
The Government Employees Retirement System issued a similar statement last week.
GERS Administrator Austin L. Nibbs did not return repeated phone calls spaced over a week requesting more information.
According to the press release, "The Board of Trustees and management of the Government Employees Retirement System would like to inform its members and the general public that the recent volatility in the financial markets has had minimal impact to the system’s investment portfolio."
The press release indicates that because of the diversification of the portfolio, the fixed income and international fixed income investments have offset some of the equity losses over the past two weeks. The fixed income and international fixed income investments account for about 40 percent of the GERS portfolio. The equity investments amount to about 1 percent of the portfolio.
GERS is monitoring the market and receiving daily updates from its financial advisors and investment managers, the press release notes. GERS’s investment policy is to invest for the long term. Confidence is high that GERS will survive this meltdown just as it did from 2000 to 2002, the press release indicated.
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