The international financial meltdown is not the cause of CL Financial’s troubles, Finance Minister Karen Nunez-Tesheira stated yesterday.

’It has to be something else, since everyone else (other financial institutions) would be in trouble,’ she said.

’If that were the case, then the Central Bank Governor could not come out and say that our financial institutions are well-capitalised and highly liquid. He would not have been able to say that.

’You cannot extrapolate that the global crisis is the cause of CL’s problems. Because, if that were true, it would be true for Royal Bank, for Scotia, for Republic Bank and Unit Trust. And that is not the case,’ Nunez-Tesheira told reporters during the tea break at yesterday’s sitting of Parliament at the Red House, Port of Spain.

Stressing that all the other banks and the Unit Trust were in a very strong financial position, she added, ’If, in fact, the global financial crisis was the cause of what we are seeing today, it would follow that all of these financial institutions...would be in the same problem that Clico finds itself in today.... And both Mr Larry Howai and the governor...made it clear that that is not the case.... In fact, it is just the opposite.

’So one has to understand that the situation with Colonial Life, perhaps because of the breadth of their investments, it (the international financial crisis) may have been the little straw that...(broke the camel’s back).’

She said the Clico situation stemmed from other reasons.

’They are not insurmountable problems. There are restructuring issues, management and governance structure, which the CL Financial... and Mr Duprey have committed itself to full cooperation with us, and we feel that that is the way forward,’ Nunez-Tesheira said.

’It is important that we do not come now and say that the minister and the governor have been saying that we are immune from the international financial crisis, and look at what happened at Clico.’

The Clico crisis has ’triggered’ new legislation.

Parliament meets on Monday to debate the Central Bank Amendment Act and the Insurance Amendment Act. Nunez-Tesheira said the bills were aimed at giving the legislative oversight-which already is there for the banks-but which is required for the insurance companies.

’We are just closing the gap, (as) things happen to trigger it,’ she said.

She added that the current insurance legislation does not provide for information-sharing with other regulators, which was important, because Clico has a lot of investments up the islands. She said the Securities Act should be coming to Parliament in February.

Stressing that she hoped there would be responsible reporting, as well as responsible commentary from the Opposition about this matter, Nunez-Tesheira said: ’This is too serious, especially in these fragile times, and we have to learn from the lessons abroad, and what you see happened in the United States with the Lehman Brothers, AIG. It is too serious to make a political football of it.’