Why is it that within days of the Fed increasing interest rates the local banks are notifying us that their rates will increase yet it’s been about a month since the Fed announced a decrease (of 0.25 percentage points to 5.25%) and we haven’t heard anything? Can we expect a decrease?
Auntie’s answer: I contacted the Cayman Islands Monetary Authority (CIMA) for help since among its duties, that body is responsible for licensing and regulating banking.
After consulting with the Banking Supervision Division and CIMA management, an official with the authority declined to offer an opinion on whether the rates will be changing and said that the best course was to ask your bank.
I have included the complete response below:
The Cayman Islands Monetary Authority is unable to comment on whether consumers can expect a decrease in local banks’ interest rates as pricing is determined individually by each financial institution, and the Authority cannot opine on such pricing decisions. Nevertheless, the Authority is aware that most local banks have published information regarding fluctuation of interest rates. The Authority would also like to take this opportunity to encourage persons to contact their respective banks directly to confirm the same, which will help them to make informed decisions during their banking transaction activities.
Generally speaking, there are a number of considerations that contribute to a bank’s pricing decisions. While US interest rates are certainly part of the setting of prices, there are also a number of other factors to consider such as the global bond markets, firm specific asset and liability management considerations, among other influences.
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Cayman banks used to co-ordinate the changes in Prime rates, usually within a week of the Fed moving, but were criticized about being a cartel so started to change them independently of each other. The government then suggested that the banks give a notice period when moving their rates, I can’t remember the time suggested, but maybe 30 or 90 days, this was when rates were going up. Butterfield and CNB have moved rates, I thought Scotia did as well, so maybe name the banks who haven’t to see if you get a response?
When did CNB do this i have yet to see the change in my mortage.
The banks are despicable. They increase the interest rates for borrowers as soon as the Fed increases them and do nothing for borrowers when the Fed decreases them but immediately reduce the interest being earned by savers on deposit accounts. Disgusting rip off merchants and no government body challenges them.
@8:38 you need to work in a back or actually sit down and look at your loan interest rate paperwork since you obviously didn’t read it before signing it. Your rate is usually worded as “Prime +x%” unless it is a fixed rate. This means if prime is 5.25% then your rate is 6.25%, it will change when the prime goes up or down because it says ‘PRIME” + x%. I don’t know which bank you ban with but savings rates have pretty much stayed the same for years. I suggest you read up on a top before commenting.
There were at least two banks who published ads in the Compass regarding a rate change, and CNB also has posters on their customer service desks, showing the rate decrease also.
That’s all when and good to post it but they need to make it effective on loan payments..
Why does CIMA even exist?
To stop Cayman from a) having a runaway financial system and b) help dispel the ‘den of thieves’ reputation we gained from years of ‘do as you wish’ banking and c) help dictate to banks what they can and cannot do to customers.
So, why aren’t they doing their job??
So why wasn’t this question passed on to a bank or two or three….?