After years of risky sub-prime loans, careless lending and multi-million dollar bonuses, many prominent banks in the western world imploded. Some economies, however, remain untouched by the collapse. Their tighter lending regulations have left them unscathed, and in fact, prospering in the wake of the recession. Millennium Bank tells The Wealth Collection how investors can benefit from the low-risk practices and higher interest rates of offshore banking.
Investors have learned tough lessons as they continue to recover from one of the worst financial downfalls in history. Once invincible banking institutions have been crippled, corporations around the world have lost trillions in capitalisation while millions of people have lost their life savings and many among them, their jobs. The world was plunged into a severe and sudden recession without warning last autumn, and governments continue to pick up the pieces while economists and financial experts attempt to provide the corrective remedies.
Deregulation in 2000 allowed banks to make their own decisions on what was or was not a risky loan. Prior to that, government regulations forbid banks from exposing the assets of depositors to dangerous risk by making sub-prime loans. When governments went forward with deregulation, they assumed banking institutions and their executives would stick to their traditional doctrines and never take those kinds of risks. They were wrong.
 The housing market was booming. Suddenly, millions of individuals and businesses that could not afford a home, an office or an office building, were ‘qualified’ in the new deregulated environment. Ultra-competitive banking executives saw the uncharted waters of the sub-prime market as an opportunity not only to expand the bank’s income but to rapidly inflate their own stock-option portfolios and increase their qualification for multimillion dollar bonuses. Ambition and greed drove these powerful executives to recklessly lend trillions to normally unqualified individuals and businesses. While these were clear and undue risks to shareholders, depositors and the very underpinnings of capitalist economies, it literally ruined the lives of millions who faced foreclosure and bankruptcy.
This new policy provided even more fuel to the rapidly expanding bubble of the housing and construction market. Real estate values were rising at incredibly rapid rates and everything seemed to be going along just right until pressures began to mount within the sub-prime market itself. Sharply rising oil prices, record losses of manufacturing jobs, interest rate spikes between 2004 and 2006 as well as the additional financial burden of property ownership all combined to derail this risk-laden adventure with a sudden and unprecedented thrust of financial destruction.
Millions of foreclosures engulfed the banks like a tsunami. Never in history, including the Great Depression, did we witness the world’s most powerful financial institutions crumble in unison like a house of cards. Many say that without the rapid intervention of governments and the trillions of taxpayers' dollars that went to fixing the massive ‘internal bleeding’ the world’s financial system may have collapsed, leaving most of us virtually penniless.
This massive transfusion of public capital leaves governments with debts that will take generations to remedy. While most people are focused on the quick fix, economists are concerned with the burden that future taxpayers will carry and the effect this will have on the ever decreasing strength of the demand side of capitalist economies. Governments have purchased stability in the short term but at what cost to our future?
Many are talking about bringing back strong regulations to govern over financial institutions. Others are urging governments to change the system more fundamentally by holding another major international economic conference similar to the post second world war Bretton Woods meetings. But is there an anecdote to the perils of human behaviour? Can we prevent the same mistakes? Only the incremental cycle of time will eventually provide us with the answer.
In the meantime, the central question remains – where can investors seek safekeeping and growth for their hard earned assets? Under the mattress? No doubt this option has become more plausible in recent times. In the local bank? Perhaps this is a feasible option for small amounts. Government or municipal bonds? Rates of return are sure but almost irrelevant. Gold? Is there still glitter in this precious metal or will it fade?
One option most of us may have omitted to include on our lists of possibilities are credible and established international private banks better known as offshore banks. International private banks that are not licensed in countries of the western world were not directly affected by the sub-prime crisis. Most are licensed in an offshore jurisdiction where they are prevented by law from providing mortgage loans. Larger offshore banks that have banking licences in the US and Europe were hit hard. But the great majority of offshore banks with single licences in offshore jurisdictions were relatively unscathed.
Sound research will allow the investor to identify strong and secure international private banks. The elements to look for are the bank’s track record, the number of years it has been in business, the returns it offers and, most importantly, the physical aspects such as the bank’s location and the number of employees. It is highly recommended that the investor visit the bank, meet members of the executive, ask all the important questions and get a feel for the institution before committing to an investment.
It would be well worth visiting St. Vincent and the Grenadines and having a close look at a bold and vibrant international private bank called Millennium Bank (www.milleniumbank.com). They have been in business since 2000 and offer excellent rates of return. There are no blemishes to be found in their track record, no depositor or consumer complaints and they hold a Class A licence. They are owned by a Swiss trust company established in 1931 and have their own investment arm.
St. Vincent and the Grenadines has a tough regulatory regime. To ensure the viability and solvency of the banks operating in St. Vincent, in 2003 the government established tough post-9/11 regulations that are structured to protect depositors (investors) in every way conceivable including the demand of quarterly financial reports from each offshore bank. At the first sign of trouble, the regulator steps in to protect deposits. That is great insurance to have as an investor in a foreign country.
Although it is relatively young, Millennium Bank has consistently performed in an ethical manner and with a sound business practice. They have a strong base of worldwide clients, many of whom have renewed their agreements and discovered a great place to grow their assets. The interest rates they offer are well above the international standard and they have proven for almost a decade that they consistently deliver on their payments. Their customer service professionals are knowledgeable, courteous and respectful.
They have put together an investment team that stays away from high risk and practises diversification to the letter. Through their Swiss parent, Millennium Bank has access to a wide range of private investment options, correspondent banking relationships and over 75 years of banking experience. They know the vital importance of privacy and confidentiality to their clients and their employees are trained in the Swiss tradition of safeguarding personal information.
These are difficult times. There are very good reasons for investors to be leery and suspicious. Recent events have compounded our traditional fears associated with the perils of investing. But every cloud has its silver lining. And if you look carefully enough you may find a bank that will bring you high yields and peace of mind. You may discover that even during tough times, there are possibilities of growing your money.
Further information
Millennium Bank
Website: www.mlnbank.com |
