1. Nason & Nason September 15, 2011 Nason Temp Solutions
Tuning out the Static
We are a tired nation. Everyone is worn out and frustrated and it shows.
It is very easy to get caught up in the negative vibrations echoing through the financial
sectors and in the political arenas as well. We will soon be bombarded with several billion
dollars of negative political ads, with more money spent than the economies of most of the
economies of the world, pointing out how every incumbent politician is incompetent, corrupt,
and selfish and is having an affair with someone. Although this is probably true, it is hard to
be positive and we do have some problems to resolve. Negative economic news, and soon
ads, makes a difficult situation seem worse and somehow we will muddle through as there
are some bright spots as well.
The US economy is a giant engine and even with minimal 1% to 3 % growth it can pull a lot
of cars with it. The banking system is much more heavily capitalized now than at the
beginning of the crisis and slowly digesting the forced mergers and problem loans. This
includes the European banks, especially the UK banks, and they are beginning to pull
together to resolve the Euro problem. It will be resolved because it has to and there is too
much at stake to not to. Estimates are that it will cost six times as much to unravel the
system as to bail it out. What we are becoming increasingly aware of is how much the
system is interdependent. Furthermore the speed and availability of information and trading
itself exacerbates the reactions and swings in the markets. They can move up almost as
quickly as they move down. Yet in spite of the downgrading of the US risk, it is the best
there is and the world still depends on the US to lead the way. Nobody is looking to China
to solve the world’s financial crisis although they could help.
It is good news that the US government is recognizing it has an employment problem and is
taking steps to address it. In banking, it is also promising to see that there is progress being
made in resolving the capital and longevity issues of the community and regional banks.
Being taken over or merged has not been as disastrous as forecast and the corresponding
layoffs have somewhat been absorbed by the greater system. Yes, some of the larger

2. banks have indicated they were cutting back on staffs but most of this is over time and a lot
can happen between now and then. So on a whole, things have gotten bad enough that
sides are talking and maybe the slide has stopped and the good news is that we will have
less bad news. Leave a comment on this article.
NRA Accounts – International Banking’s Last Stand
No legal issue is more important to community banking in Florida than the NRA (Non
Resident Aliens) accounts issue. Spurred on by Senator Carl Levin, who sees a tax cheat
under every stone, there is an attack on the NRA accounts as he believes they are a shield
for millions, and even billions, of tax dollars seeking to slip under the radar as US tax cheats
masquerade as foreigners. Besides, many in Congress believe people everywhere should
pay their fair share of taxes no matter where they are from and that the US banking system
should not be used to evade their tax responsibility. NRA information will give the US a
moral force and vehicle to request similar information from foreign governments and assist
with FATCA enforcement. Levin has lots of converts and besides Florida only Texas feels
strongly that the privacy of accounts needs to be protected. The irony of the requirement of
the IRS that regulators are seeking to impose is that the persons being reported as account
holders are not subject to US taxation as a result of passive income. They owe no money.
To put their names on a list that can be submitted for foreign tax authorities and in fact
traded to those authorities make investors nervous that the information can be misused.
The US has long been considered a safe haven for investors seeking country risk
diversification and stability. Now it is losing its attraction to many trying to escape corrupt
and oppressive governments such as Cuba and Venezuela. When all of the cost and lost
income is added up the dollar amount gained in tax levies is certainly a fraction of the cost
of the heavy reporting burden placed making US banks the tax policemen of the world.
The ruling that will soon be enforced is that banks will be required to report to the IRS all
non resident alien accounts by country to the IRS and that information can be shared with
the government of the country of origin. Such accounts can represent as much as 60 or 70
% of the deposit base of some banks and is used for people who wish to have a business
or presence in the US and who spend billions of dollars on an annual basis here. To chase
them away will have a detrimental effect on the liquidity and lending capacity of the host
banks many of which are in Florida, Texas or California as most of the depositors are
Latins. Every dollar on deposit produces nine dollars in lending. A bill introduced in
Congress by Senator Marco Rubio and sponsored by Representative Bill Posey in the
House has a decent chance of passage. They are getting little help from their friends as it is
not an issue of importance in other states and for them, tax cheats are tax cheats. In
addition the big five banks are not complaining as they have their own problems and they
have bigger fish to fry. Thus they are not pressuring the legislature. The bill, if passed, may
slow the progress of implementation of the IRS ruling by introducing a one sentence bill that
commands that the Treasury shall not require information reporting of interest not effectively
connected to a US trade or business paid to a non resident alien on a deposit maintained at
a US office. The bill has been endorsed by several bank lobbies and has a chance to pass.
It is a last stance for international banking in this country as a safe and welcome place for a
foreigner to do business. When we look back a few years from now and wonder why we
have lost so many jobs, maybe we will remember killing the goose that laid the golden egg.

3. To some extent the damage has already been done. There is a sign at the border that says
foreigners not welcome. Four trillion dollars of foreigner’s deposits are at risk. Many of the
larger accounts and money are pouring out of the US. FATCA legislation is getting closer to
implementation where not only US banks but all banks with an office in the US are being
required to provide lists and real time activity of accounts of Americans around the world.
By the way, the IRS definition includes not only individuals but any company or trust that
have 10 percent of more beneficial ownership by a US Citizen as a citizen for tax purposes.
The IRS has taken the banking system hostage to the point where Swiss banks are
prohibiting their wealth management people or senior officers from traveling to the US even
to take a vacation or change planes. Further they will not approve the work visa of an
American to work for a Swiss bank in Switzerland. Frankly the Swiss like most of Europe
are laughing at us and appalled we would cede the one area where the US had a
competitive advantage and lead on the rest of the world. Over-regulation, this among it, has
eaten into the leadership the US had in the financial world and it has become a hostile
place to do business or travel to as a foreigner. Leave a comment on this article
Panama on the Rise
There are about 50 direct flights a week between Panama and Brazil on Copa Airline alone.
Cruisers take cruise ships out of Panama because they cannot get visas to go to Miami or
Ft. Lauderdale without a hassle. The same is true for changing planes to go to Europe. One
owning an apartment must keep impeccable records of their, or even their spouses, days
spent in the US to avoid US taxes on their world wide income. Venezuelan and other Latin
Americans are finding a warm welcome in Panama. Their financial business as well.
Thanks to foresight and infrastructure Panama stands ready to pick up the US rejects.
Panama’s banking center continues to grow. The financial hub grew at an estimated 12% in
2010 with consolidated assets totaling $71 billion. Net bank revenues were $1.7 billion up
$150 million more than 2009. Panama’s economy itself grew 7% in 2010. That is growth
equivalent to China’s GDP increase. It makes Panama one of the countries of the region
least affected by the global financial crisis. Panama banks are solvent with over 65% asset
liquidity and account for 11% of Panama’s GDP. The International Banking Center hosts
some 80 banking institutions and 16,000 people. Its dollar based economy helps, as does
its supervision and increasing array of financial services.
Most would agree Donald Trump is not investing his money in real estate in Panama on
whim. Is there a real estate bubble? Most buildings and projects have 40 % equity and thus
staying power. New hotels are being built and even airports. The increase in the canal is
Panama’s own stimulus package. Lots of energy, building, including a new metro system,
hotels, mining and jobs being created. Yes, there is a traffic problem – but doesn’t every
growing city in the world have one. Energy, education and health further head the list of
problems. Welcome to the developed world. Not all is rosy on the political front as
politicians jockey for position. Taking all things into account, Panama is not Miami but is
well along on its way to becoming the regions’ chief financial hub. Leave a comment on this
article

4. On the Move
BBU has become Banesco USA, a name which is in line with that of the original bank and
the largest in Venezuela. Banesco has hired Domingo Callejas as SVP, Controller.
Domingo was formerly SVP and Controller of US Century bank. Joining the Bank as well is
Danny Rodriquez as EVP and Head of Regulatory Compliance. Danny was formerly at
Gibraltar. He replaced Alina Palacios who departed to BIV where she will head up the
Compliance area. Danny in turn was replaced at Gibraltar by Maria T. Escoto who came
from Biscayne Bank. Another Chief Compliance Officer making a move is Arlene
Velazqueoni who has left Hapoalim and is now at Biscayne Bank. Wow, what an
interconnected market! Simon Cruz, who has been President of Bank of Coral Gables, will
be taking the helm as President of Intercredit Bank. Raul G. Valdes Fauli has assumed
the Presidency and CEO of Professional Bank; was formerly president of the South
Florida market of CNL Bank. J.C. Campuzano has been named Managing Director of
International Wealth Management at Northern Trust. Ricky Navarro has been named VP
Business Banker at Bank United. He was formerly the Manager of SBA Lending at
Intercredit Bank. He was replaced by Jeni Chokron who came from BankAtlantic.
Roberto Diaz de Villegas has been engaged by Bank Julius Baer to serve as a Director
for their Brazilian subsidiary and will head up their Nassau operations. David Davidoff has
joined Nason & Nason as Senior Advisor. David had been HR Director at Coconut Grove
Bank. Leave a comment on this article.
A lot going on. Feel free to make comments on our blog. Give us some suggestions on
topics you would like to see covered and let us know who else is on the move for our next
issue of .
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