Premier: Deposit insurance move ‘wise’ after Bank of Asia collapse
Premier Dr Natalio Wheatley has commended his government’s decision to implement deposit insurance, a move he said has already proven its value following the collapse of Bank of Asia.
Speaking at a press conference, the Premier said the bank’s failure underscored the importance of establishing a formal system to protect depositors and strengthen confidence in the territory’s banking sector.
“But I think our decision to move forward with a deposit insurance corporation has proven to be extremely wise,” the Premier said. “Not knowing that the Bank of Asia would fail, but I think that the Deposit Insurance Corporation has been doing an extremely good job in going through the process of ensuring that depositors will be protected,” he stated.
Bank of Asia was placed into liquidation after it ceased operations, raising concerns among customers and the wider financial community. The bank’s closure marked one of the most spectacular banking failures in the territory, prompting renewed focus on depositor protection and regulatory safeguards.
Premier Wheatley said the work of the Virgin Islands Deposit Insurance Corporation (VIDIC) extends beyond responding to bank failures. He explained that the framework is designed to help prevent crises by identifying risks early and supporting financial institutions before problems escalate.
“Part of what they’re doing is to help prevent those things from happening,” he said. “So in their investigations, if they see problematic signs, we can take steps to make interventions, and they can help to support the banking institutions so that they don’t get to the point of collapse,” Wheatley stated.
He added that the presence of deposit insurance also improves the chances of depositors and creditors recovering funds in the event of a failure, particularly where assets or licences retain value.
According to the Premier, VIDIC has been effective in ensuring that “Any creditors would have a possibility of being made whole, especially through a potential sale,” he said. He also pointed out that a banking licence in the Virgin Islands remains a valuable asset.
The Premier said he was pleased with how the matter has been handled so far by the Deposit Insurance Corporation and the court-appointed liquidator, urging the public to “allow the process to play out”.
“But thus far, I’m extremely satisfied with how the Virgin Islands Deposit Insurance has handled the matter, and as well as the liquidator, which was the court-appointed liquidator,” Wheatley stated.
The Premier suggested that lessons from the Bank of Asia collapse would inform future regulatory action, stressing the need to allow the process to continue under the established legal framework.
“I know the Financial Services Commission would certainly have had lessons learned,” the Premier said. “Having the Virgin Islands Deposit Insurance there as well, I think, will strengthen our ability to ensure that something like that doesn’t repeat itself.”
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Seriously – you make $5 million disappear and you dare to comment on deposit insurance!
This is criminal liability..
So he will get back 100k of the 5M that he lost. This man ain’t good in his head.
I think he is talking more about the process as opposed to getting back deposits (which are not lost btw). The deposit insurance amount only comes into play if the bank was a complete failure and insolvent. In this case based on the information provided, the bank has assets and there are investors willing to buy it. If the bank is acquired, the purchase would include the deposited amounts therefore the insurance would not be called up. In a nutshell, VDIC is not simply there to pay money when a bank fails, it’s a regulatory agency that would work alongside FSC and others on banking matters and would only pay out monies to depositors in the event of a complete failure which is not the case with BOA.
Not knowing the bank insurance would fall. The bank according to sources printed it is alleged that it had not submitted Financial Statements for a long time but nobody knew it was in trouble, man you all think we are fools.
You all should have had to deal with the feds.The Governor them playing with ah you. Any other country the regulators and the head of FSC would have been suspended until the investigation is over.
Somebody’s head had to roll.
They knew the Bank was in trouble before the deposit was made.
Buy short-term US treasury bonds typically called Treasury Bills (“T-bills”), which have maturities of one year or less, ranging from 4, 8, 13, 17, 26, to 52 weeks. It’s the smartest and safest way to manage cash, at least if the alternative is depositing money into some jankie bank that is clearly in trouble.
Mr Premier, Bank deposit insurance is usually limited to around $200.000 It is intended for everyday savers from loosing their money if a bank fails.
Are you now telling the people that all their five million dollars is fully insured and you are just now waiting for an insurance company to return it to the BVI Moneytree?
Its not 5 million, it $10 million the government gave the Bank, But that was so the Bank could pay the Ministers who had put money into the Bank.
All of them should be in jail… Govenor please step in and sort this out..
How is that going to insure us against you putting $5Million in an already bankrupt bank?