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

Why Multi-Province Payroll Compliance Is the Hidden Challenge Canadian SMBs Face and How Folks Solves It

mm

Published

on

Photo courtesy of: Folks

Byline: Shem Albert

Running payroll in Canada can feel like crossing a country stitched from many different fabrics. Each province weaves its own pattern of tax rules, leave policies, and benefit requirements, creating a landscape where a single misstep can ripple through every paycheck. For small and mid-sized businesses, the challenge often remains hidden until growth pushes hiring beyond provincial borders or brings remote workers into the fold. What seems like a routine back-office task quickly becomes a test of accuracy, timing, and local knowledge. This is the gap that Folks set out to close, offering a way for employers to navigate Canada’s regulatory patchwork without slowing their momentum.

Provincial Rules Add Complexity

Canada’s payroll environment varies sharply by province. Federal rules set the foundation, but provincial tax rates, deductions, statutory leave entitlements, and benefit premiums add layers of complexity that employers must monitor carefully. Small and mid-sized businesses with staff across provinces or remote employees face different tax tables, reporting deadlines, and leave calculations that directly affect pay accuracy and remittance schedules.

Folks built its payroll module to address these differences. The platform calculates the correct provincial tax rates and deductions for each employee, applying updates automatically so employers avoid misapplied withholdings or late filings. Multi-location tax management allows a company with workers in Ontario, Quebec, or several other provinces to process payroll without creating separate accounts for each jurisdiction. Bilingual functionality in English and French and secure Canadian data hosting support compliance while keeping employee records accessible across language and regional boundaries.

Unified Records Improve Accuracy

Payroll errors often stem from mismatched employee data. Changes in pay rates, banking details, or benefits eligibility may not align between HR and finance systems, creating incorrect deductions or delayed payments. Smaller teams juggling separate platforms spend valuable hours reconciling information instead of focusing on strategic work.

Folks resolves these issues by combining HR and payroll in one platform. Updates to wages, hours, or tax information entered on the HR side flow directly into payroll without re-entry. This single, verified record strengthens the accuracy of every payroll run and ensures employees receive the correct pay and deductions. By removing the need for repetitive administrative work, HR staff can redirect their time to tasks that support growth and employee engagement.

Automation Keeps Provinces in Step

Each province sets its own requirements for holiday pay, pay frequency, and statutory benefits, making manual calculations both time-consuming and error-prone. Businesses that expand or hire remote employees must keep pace with shifting provincial regulations or risk penalties and audit issues.

Folks address these demands with automation designed for Canada’s regulatory landscape. Pay statements, deduction calculations, and custom pay schedules follow the applicable provincial rules without extra configuration. The system’s automated updates mean that a company hiring staff in British Columbia or Quebec can meet local payroll standards without adding new layers of setup or monitoring. Employers gain the ability to expand into new regions while maintaining accurate, on-time pay.

Reporting Strengthens Compliance

Changing tax rates and reporting requirements require ongoing attention from HR and finance teams. Companies that rely on disconnected systems risk missing a provincial update or submitting incorrect remittances, which can lead to fines and interest charges.

Folks provides detailed reporting tools that compile payroll, deductions, and benefits information across all locations. Employers can generate clear remittance and deduction summaries, simplifying the process of meeting provincial filing requirements. For organizations that want additional guidance, Folks also offers a payroll management service that brings in-house specialists to assist with configuration, compliance, and regular updates. These reporting features help companies stay audit-ready and avoid costly compliance gaps.

Scalable Payroll for Expanding Businesses

Many small businesses begin in a single province, where local tax and payroll demands can be learned over time. Growth into new provinces or the decision to hire remote staff adds a level of complexity that manual processes cannot handle efficiently. Errors multiply, compliance risks rise, and payroll teams spend more time correcting mistakes than supporting expansion plans.

Folks provides payroll that scales with company growth. Provincial tax logic, automated deductions, bilingual support, and secure Canadian data storage are built directly into the platform. By maintaining an accurate employee record and applying province-specific rules automatically, the system allows Canadian SMBs to expand with fewer administrative surprises and more predictable payroll operations. Companies gain the stability of compliant payroll across provinces while controlling the time and costs that typically accompany multi-jurisdiction growth.

Continue Reading

Trending