Business Lounge
rethinking
Banking Accounting
W
hen a company’s losses top 100 billion in any currency the reason is usually a catastrophic unforeseen occurrence such as BP’s present predicament and the result is usually drastic measures to preserve what is left and survive at any cost. Thus the fact that American insurance giant AIG’s 2008 Q4 losses were just under US $100 billion should boggle the mind of any rational thinking person before you realize that you’re assessing a business that doesn’t reside within the “real economy”. In fact the amount of money lost by American banks and financial institution since the start of the global economic crisis would have crippled any normal business even with the help of the government who deemed several institutions, “too big to fail”. Would it be too much to ask for banks to be required to practice accounting like a real business?
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It’s a bit like putting lipstick on a pig but the longer executives take before recognizing their losses then the more leeway they are allowed to report a favourable quarter here or there to justify the spending of taxpayer dollars. In a regular business, that would probably warrant an auditor making a lengthy report to the relevant authorities. The fact that the rest of the economy is so dependent on the decisions made by the banks shouldn’t banks be held to the same rigid accounting rules as businesses in the “real economy”?
In fact the amount of money lost by American banks and financial institution since the start of the global economic crisis would have crippled any normal business even with the help of the government who deemed several institutions, “too big to fail”
”
All through the recession there were big name companies in the US and outside of it that managed to stay in the black while keeping there earnings relatively stable. Granted, they did so through massive cost cutting exercises such as layoffs but the point is that they did what they were supposed to do. Insurers and megabanks on the other hand behaved like a pendulum with a sugar hype swinging in and out of the red wildly with the buffer of the knowledge that they can create wealth out of thin air using some sort of magical math that only the top brass understand. This sort of thing inspired a recent joke where a speaker at a recent conference wrote “2+2=5” to which the murmur of approval from the economists in the audience was considerable.
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A lot of bank accounting is really educated guesses about the future and therein lays a lot of the problem. Imagine a practice frequent in the US known as “extend and pretend” where bank executives refinance borrowers who cannot repay their loans in order to avoid reporting losses on loans.
yourmoney ezine
special
Your money ezine business summit 2010
The Speakers
T
he theme of the inaugural Your Money eZine Business Summit scheduled for the 28th of July, 2010 is “Entrepreneurship: The New Wave?”. Jamaicans are renowned for their enterprising spirit and their knack for entrepreneurship yet there is a sense that we have not fully realized our potential with regards to making Jamaica hospitable for entrepreneurs. The aim of the summit is to examine our failures and our successes over the years and use the question asked to spark a resurgence of discussion about the state of entrepreneurship in Jamaica. Our speakers at the summit have both found success in entrepreneurship even if they did have different approaches and did so in different eras of our country’s development. Their discussion will undoubtedly be informative and inspiring as these two men are among the finest products of Jamaica. This week we take a quick look at our speakers, Michael Campbell and Christopher Williams.
ence to countless others through his professional associations, Michael Campbell’s knowledge of the entrepreneurial landscape is unparalleled and he could argue that entrepreneurship has ALWAYS been the wave.
Michael Campbell The entrepreneur’s entrepreneur, Michael Campbell has lived his life by the mantra that has hung in his office for decades, “We are constantly faced with opportunities brilliantly disguised as insolvable problems”. Michael Campbell is the founder of one of Jamaica’s most recognized businesses in Island Car Rentals which he started in 1973 a period that was especially inhospitable for new businesses especially one dependent on such fickle resources.
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We are constantly faced with opportunities brilliantly disguised as insolvable problems
”
Campbell’s first business, Michael Campbell and Associates was actually a real estate brokerage which he started in 1966 not long after Independence. Michael also holds the distinction of being a founding partner in Contemporary Homes Ltd, a company that was responsible for the development of the first town houses in Jamaica. Having started over five successful businesses in Jamaica and lent his influ-
Michael Campbell Started Michael Campbell & Associates
1968
Partner in Contemporary Homes Ltd
1968
Started Jamaica Rental Company Ltd
1970
Started Seroft Ltd
1970
Started Island Car Rentals
1973
Bought Arawak Car Rentals and merged with Island
1975
Bought Airways International
1979
Sold Airways International
1986
Started Island Motors
1997
yourmoney ezine
special
Your money ezine business summit 2010
The Speakers
“
Mr. Williams earned praise especially for steering NCB Capital Markets through the recent global financial crisis and reporting record profits.
”
While Chris’s entrepreneurship journey is relatively young, his knowledge of both sides of the fence is especially useful for those professionals with dreams of making the leap of faith. Christopher Williams is part of the new wave of entrepreneurs so we wait to hear his take on where we are and more importantly, where we’re going.
Christopher Williams
CEO- Proven Investments 2010 Former Managing Director- NCB Capital Markets Former Director of NCB Insurance Company Limited Christopher Williams Christopher Williams is in his own right a superstar of Jamaica’s modern financial landscape. The CEO of recently formed Investment house, Proven Investments has positioned himself as one of the brightest minds in the business. Before Proven, Williams was Managing Director of the National Commercial Bank’s Investment house, NCB capital Markets which flourished under his stewardship. Mr. Williams earned praise especially for steering NCB Capital Markets through the recent global financial crisis and reporting record profits.
Former Director of NCB (Cayman) Deputy Chairman of Jamaica Stock Exchange Deputy Chairman of the Jamaica Securities Dealers Association
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