Connect with us

Business

COVID-19: Luigi Wewege discusses risks to the Global Banking System

mm

Published

on

A well-known figure in private offshore banking shares his views with us on the potential impact of COVID-19 on the global banking system as well as current investor sentiment. Luigi Wewege, Senior Vice President and Head of Private Banking at Caye International Bank in Belize discussed the situation with reference to several scenarios that investors could and should anticipate.

Regarding liquidity and stress tests, Wewege says that “Overall, United States and European based banks have showed reasonable improvement since the last financial crisis around 2008 however Europeans in particular do remember what happened with bail-ins and bailouts so you do see a lot of investor concern with what the European Central Bank might do next.”

When asked about some of the biggest concerns facing investors, Luigi noted that “There has been huge inflows of capital into the USA during the Trump administration. But now, people are a bit concerned about how far FEMA measures will go. People who have put large portfolios in either the USA or Europe are rethinking whether their safe-haven decision was the correct one. The Fitch Ratings agency already warned that the Italian banking system may struggle to cope with the fallout of the Coronavirus – and yes, it was not in a particularly good shape even prior to this. You also have countries like Greece that risks sliding straight back into a deep recession. So overall, investors do feel uneasy about the EU and US right now.” He went on to explain the various indicators that were taken into consideration during February plus March 2020 and said “Bank shares in Europe and the United States saw a very sharp repricing and decline. Government bond yields are falling, with US corporate high yields shooting up. This all shows that investor confidence in the global financial system has been shaken.”

Elaborating more on the scenario in Europe, Wewege believes “With such a substantial socio-economic shock unfolding in front of us, the brightest of financial analysts find it hard to see how Banks in the most affected European countries can maintain good assets and earnings. If repayment of loans ceases in the case of many European families – toxic assets becomes a big risk to them very quickly.”

About IMF policies during these challenging times, Luigi says “In fairness, the International Monetary Fund acted quickly to help countries during the time of Ebola, but that was a much smaller issue than what we face today. We know that given the huge spike in uncertainty that some in the IMF are proposing that there is a consensus worldwide to have a common monetary policy – and that will hopefully prevent a scenario where some currencies end up being the losers in Black Swan events. Yet all these instruments have their limits and at some point, it will come right back to the question of liquidity. That’s precisely why so many middle income to HNWI’s have allocated a decent portion of their portfolios to offshore banks that do not face the same exposure and risk that European and USA based banks do.”

Wewege went on to explain common risks that each individual country may face in the immediate future and aftermath of COVID-19: “A reduction in revenue and productivity may affect many countries – it is already doing so with disrupted supply chains and right now more borders are shutting. Then we have crippled public health systems in Europe who will need to consume a lot of public funds/stimulus in order to continue. Then off course there is one word that scares just about every European country and US state: Tourism. It is an important sector that is showing early signs of major strain that will likely continue for many more months. All these risks add up and will cause great strain on the global economy for the duration of 2020 and possibly even into 2021.”

On the ongoing appeal for offshore banking, Luigi says “Investors from all over the world gained a lot of respect for jurisdictions, like ours in Belize, where our banks were largely untouched by the 2008 financial recession. And yes – they certainly remember what happened to some large banks in Europe and the USA at the time and thus feel the writing is on the wall, whether it is indeed the case or not. Although we cannot predict accurately what the state of the global banking system will hold especially in Western countries, we can see a clear shift towards diversification and the start of more deposit inflow at offshore financial institutions like ours in Belize.”

Sound off:

Some may argue that the Dodd-Frank law that was passed in 2010 rendered the United States a less of a risk today than it was around 2008 and doomsayers who closely watch the Italian, French and Greek economies may have a point that the worst is still to come. Ultimately, these are very challenging times and to some extent, unchartered territory for the global financial system dealing with the Coronavirus pandemic.

The idea of Bigtime Daily landed this engineer cum journalist from a multi-national company to the digital avenue. Matthew brought life to this idea and rendered all that was necessary to create an interactive and attractive platform for the readers. Apart from managing the platform, he also contributes his expertise in business niche.

Continue Reading
Advertisement
Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Business

This is how Dorart Ibrahimi grew a million-dollar company at just 16

mm

Published

on

Social media can be a tricky and tough place to navigate and understand especially when it comes to content creators and businesses to grow their reach and customers. While social media platforms like Instagram, Facebook and Twitter are known to be marvellous places to monetise and reach out to the right people, it can be challenging for those who do not understand the first thing about them.

This is why there are organisations and institutions that help influencers, businesses and content creators in reaching the right audience, growing their outreach and networking with the right people.

One such person who has done immensely well in the world of social media is Dorart Ibrahimi.

16-year-old Dorart has started an Organic Growth Program which is the most unique and outstanding scheduled program ever made where businesses and individuals will be guaranteed to achieve success on Instagram, in the form of likes, followers and everything that Instagram has to offer.

At the age of just 16, Dorart is the owner of DORART MGMT LLC, which is a million-dollar company that has successfully surpassed $2 million in sales within two years of beginning.

Born and raised in Kosovo, Dorart is ethnically Albanian. While Dorart was raised in a middle-class household, his parents were extremely intellectual and taught him a lot about life. A lot of his significant business learnings came from hanging out with the biggest business venture partners in Kosovo. Dorart began admiring them and this is where his passion for making money and becoming a businessman at such a young age was born.

Starting during the pandemic, Dorart began the organisation as a fun meme page after which he decided to grow his personal standing where he found it was possible to make money from advertising.

It was Dorart’s love for social media and content promotion that led him to build DORART MGMT LLC as its owner and founder and grow the organisation to 59 employees who, as per Dorart, “make thousands of dollars a month each”.

Dorart has a $500,000 worth and he plans to grow it to at least a few million in the next year.

His extreme talent, a knack for social media and a deep understanding of Instagram, as a platform, is what has led Dorart to where he is today.

Dorart has future plans to turn his organisation into an Incorporation where he will be starting various online businesses and services in different fields in real life.

Not just that, to impart his knowledge and learning from the world of social media, Dorart will also be beginning a Mentorship Group where he will be teaching millions how to make money and how to build a successful marketing agency.

With just two years with him, Dorart has been able to build and grow his business to having over $500,000 worth. His plans include growing and building his business further along with expanding into other ventures. While he plans to grow the worth of his company to $2 million until next year, he ultimately plans to grow it into one of the biggest incorporations in the world.

 

Continue Reading

Trending