Written by :
Published on :
ST JOHN'S, Feb 18 (Reuters) - Antigua and Barbuda's minister of finance and economy said on Wednesday the twin-island Caribbean state was scrambling to shore up its banking system after potentially devastating U.S. fraud charges against Allen Stanford, its biggest private employer.
The minister, Errol Cort, said in a statement that authorities had "collectively agreed on a plan of action to maintain and preserve the viability and stability of the financial system."
His comments came after the Stanford-controlled Bank of Antigua warned of a possible liquidity crisis at the bank if it was continued to be besieged by clients demanding their deposits.
They also followed a warning from Antigua and Barbuda's Bankers Association (ABBA) about the knock-on effects of a run on the bank, which is part of Stanford's global business interests but separate from Stanford International Bank Ltd, the offshore affiliate at the heart of fraud charges lodged on Tuesday by U.S. regulators.
"ABBA is of the view that if customers continue to withdraw funds from Bank of Antigua, this could destabilize not only Bank of Antigua, but the entire financial system," the association said.
Cort said the government was aware of the "critical nature of the current state of affairs at the Bank of Antigua Ltd."
He added that there was "no need to panic," however.
"I say to depositors here in Antigua and based on the plan that has been agreed upon by all parties, deposits in the banking system are safeguarded," Cort said.
Cort gave no details of the plan, which he said had been agreed with the six-nation Eastern Caribbean Central Bank, where he serves as chairman of the policy-making Monetary Council.
But he said fallout from the Stanford probe on Antigua's jealously guarded financial system was now "well under control."
Stanford owns the country's largest newspaper and his local commercial bank is Antigua's biggest private employer. He is also its top investor and is the first American to receive a knighthood from its government. He has homes sprinkled across the region -- from Antigua to St. Croix in the U.S. Virgin Islands to Miami. (For full Stanford coverage, click: [ID:nN1356805]) (Editing by Muralikumar Anantharaman) (Reporting by Jason Szep; additional reporting by Tom Brown in Miami)
