Ladies and Gentlemen, 

I am delighted to have this opportunity of addressing you all today. It is a good time to be discussing the issues of financial regulation and indeed financial activity more generally. A good moment for Anguilla, and also for me personally. A good moment for me personally as it is now seven months since I became Governor, and in those seven months I have spent more time on financial issues than anything else. It is also fourteen months since 15 September 2008, which was the day I learnt that my bid to be Governor here had been successful. Most of you here will also remember that date - it was the day that Lehman Brothers went under: the event that most people use as the starting point of the global financial crisis. There is still disagreement as to who is to blame for the global crisis - my list of suspects includes greedy bankers, complacent regulators and inactive governments. It clearly didn’t start in Anguilla, but like many jurisdictions around the world Anguilla has suffered from it and there is probably a lot more pain to come. The latest OECD forecast is for an upturn in 2010, but only a modest one.

Working through the consequences of the crisis will be a task for many years to come. The issues for Anguilla are easy to summarise - the massive downturn in our tourist industry, and other consequences of the recession; the much greater attention paid to so-called "tax havens" (I will come back to that term) by the G20 and other key institutions; and the need for all of us to recognise that the game has changed, is still changing, and will change still further. Nothing will ever be the same again in the financial world, and those who prosper in future will be those who realise that. Just as the international political landscape changed forever eight years ago on 9/11/2001, so the financial landscape changed forever on 9/15/2008. I was struck the other night at the opening ceremony of the OECS how many speeches referred to transformation as the big theme of the moment – one speaker recalled Bill Gates saying that things are now changing “at the speed of thought”. I don’t believe there is any point in looking back in nostalgia. But I do think we can look forward in hope. Anguilla has demonstrated throughout its history a nimbleness and adaptability that is the envy of larger and slower-moving jurisdictions. In living memory it has moved through subsistence agriculture, salt panning and boat building to become one of the world’s great tourist destinations and a thriving financial centre. I am confident Anguilla can continue to adapt to whatever history throws at us. But we need to accept that, although we have survived the financial tsunami, things are still fragile. There have been three major financial collapses in the Caribbean – Stanford, CLICO and BAICO, and a fourth would test the resilience of the region to the limit.

It's also a good moment to take stock as far as Anguilla is concerned. A lot has happened in the world of financial regulation since my predecessor met you this time last year.  The Proceeds of Crime Act has now reached the statute book. Anguilla has concluded or nearly concluded Tax Information Exchange Agreements with a number of other jurisdictions, and should have signed the magic number of twelve after the Chief Minister’s and Finance Minister’s visit to London in early December. The Caribbean Financial Action Task Force has begun its periodic peer review of Anguilla – a team visited the island in July. And Michael Foot has carried out his independent review of British offshore financial centres, on which he released his final report on 29 October.  

The Foot Review covered a wide range of relevant issues, many of which apply in the other eight jurisdictions he considered, as much as Anguilla. I would like to begin by going through the report, which I am sure you have all read, and giving some preliminary views on the issues he raised. Incidentally, I think it is important to work from the report itself, and the useful summary of recommendations in Chapter One, rather than from the selective and occasionally inaccurate press reporting. The most lurid report “Bell Tolling for Offshore Tax Havens” benefited from being written before the report was published. In fact, Foot deliberately does not use the intellectually unrigorous term “tax haven” and his report is a judicious and balanced piece of work. Michael Foot himself has spent a lifetime in the financial world, and many years as a senior regulator. His report therefore deserves to be taken seriously. Nor is it all critical.  He was very grateful for the cooperation he received from the Government of Anguilla, and others on the island during his visit in June.  His report notes that Anguilla has a good story to tell in some of the areas covered – for example that Anguilla is close to implementing the agreed G20 standard on tax information exchange. But there is plenty of work to do to implement his recommendations. Some of them are for me, with my responsibility for the regulation of international finance; some for the Government of Anguilla; some for the British Government; some for the Financial Services Industry here; and some for more than one stakeholder. Among the more important issues he covers are financial regulation, Anguilla’s business model, and the fight against financial crime.

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