I don’t think anyone, outside of the business itself, has yet really understood the implications to Bermuda of the spate of M&As within the IB sector here.
While mergers and acquisitions have been predicted for some time, it is only really now that we are seeing them actually happen.
We have not yet directly seen the consequences, but we will in a few months when high-earners are laid off and offices become empty.
There will be millions of dollars less entering the economy whether through grocery shopping, rents and ancillary services such as carpet cleaning which are no longer required.
IB was the pillar many of us leant on as tourism declined. The problem is, as the IB pillar shrinks tourism is not increasing enough to pick up the slack. There is no third pillar on the horizon to come to the rescue.
I don’t know what the solution to this is as Bermuda is really not able to indulge in manipulation of the economy as other larger countries can.
It certainly puts more urgency on a recovery in tourism as well as investigating new technology-based industries.
UPDATE: a friend posted this on my FB page: “In the past it’s been cyclical. As I understand it, more M&As happen in a soft market and then new companies form as the market hardens after a major event. The problem for Bda going forward is that there is more jurisdictional competition for new business now. Whatever your opinion on term limits, it certainly had a negative effect on the IB sector.”