Business Monday

Q&A with FIBA chair Teresa Foxx on the road ahead for Florida banking

Miami Herald Staff

Teresa Foxx has taken over the Florida International Bankers Association at a crucial time.

Local banks have recovered from the recession and are back on their feet. But federal and international regulations are putting strain on some financial institutions by asking them to dig deeper into their customers’ backgrounds and establish tighter risk management standards. And while the reopening of relations with Cuba is an opportunity that one local bank has already jumped at, doing business with the island nation comes with its own potential pitfalls.

Foxx, who is also the general manager of Barclays’ Miami branch, says FIBA serves an important role in educating its members, helping guide them through complex regulations and advocating for their interests.

She has had a long career in finance, having started her career at accounting giant KPMG Peat Marwick in New York. She was one of two African Americans in a class of 60 accountants-in-training hired by the firm. She also worked for Credit Lyonnais and Deutsche Bank before joining Barclays and then moving to Miami 11 years ago.

Foxx answered questions from the Miami Herald via email.

Q: What do you hope to accomplish in your time at FIBA?

A: FIBA has spent 35 years making a difference in the financial community, coupled with building a strong network of bankers that make Miami an international powerhouse ... FIBA’s presence in the industry is crucial because we are a think tank; we provide the local and community leadership needed to keep banking at the forefront of the financial industry; we keep our members up-to-date with current regulatory changes and issues; and we provide our members with the training and resources they need to face current and future challenges effectively.

The recent opening of the FIBA Institute for Financial Education will serve as a key component for providing our member banks with increased educational offerings.

I could not be more thrilled to have accepted the position as chair of FIBA. I’m eager to focus on enhancing FIBA’s brand both locally and internationally. Given the current state of the financial services industry, I look forward to raising awareness on the significance of trade finance, as well as treasury and liquidity management.

Q: How has banking in Miami changed since you started your career?

A: When I started my career in the ’80s, the primary focus on banking was addressing the perils of the savings and loan crisis. Now, the industry has shifted dramatically with a focus on international and global banking that is heavily shaped by the most recent legislation, such as Dodd-Frank and Basel III.

Much like any industry, the financial services industry has experienced both obstacles and triumphs in the last few decades. The region’s proximity to Latin America, accelerated trade infrastructure and population diversity have all played a vital role in Miami’s transformation into the international financial hub that it is today.

Q: How have local banks been affected by federal regulations over the last decade? Do you expect to see more consolidation among smaller banks?

A: Evolving regulatory and compliance requirements including updates to [anti-money laundering, bank secrecy, know your customer and Dodd-Frank] regulations have all been made in an effort to improve operations and practices for managing risk within financial institutions.

Being mindful of these increased regulatory requirements, local banks now have to focus even more intensely on managing the associated costs, whether they are capital related or compliance related, with a view towards sustaining the viability of their business.

While the future of correspondent banking is at a crossroads, we at FIBA believe that the solution lies in enhanced cooperation between financial institutions and regulators, as regulators come to increasingly rely on financial institutions in the fight against money laundering and terrorist activity.

Q: What impact will PortMiami’s ability to accept post-Panamax ships have on trade finance, an important business for local banks given Miami’s status as an import-export hub?

A: The enormous growth experienced by international trade over the last few decades can be attributed to the ongoing facilitation of trade finance. Without the role of trade finance, the increased exchange of goods that will be prompted by the expansion of the Panama Canal and larger post-Panamax vessels would not be possible. Granting access to these larger vessels opens the door for an influx of imports and exports. Currently 52 percent to 54 percent of the port’s trade is north-south, but it is anticipated that shipments will only continue to climb after the canal’s expansion, opening the door for east coast trade with China and other Asian nations.

It is our duty as an organization that promotes trade finance to prepare our members and ensure they are fully equipped to manage the influx of business that we suspect will occur following the canal’s expansion.

Q: How is Miami different from other banking markets in the U.S.? Where do you see the most growth potential for local banks?

A: The international banks based in Miami focus primarily on trade finance, wealth management and correspondent banking, which are products that are attributed to higher regulatory scrutiny. However, FIBA continues to assist the banking community with addressing these hurdles to encourage the sustainability of these critical bank products.

With respect to growth, the U.S. trade numbers with Latin America have continued to increase exponentially over the past 10 years, with only a one-year slump during the credit crisis. Trade finance continues to offer considerable business opportunities for the local banking community. However, the new Basel III regulations have increased the capital requirements for the trade finance product, irrespective of its historically low default rate. FIBA has been instrumental in highlighting the unintended consequences of Basel III on trade finance for legislative action.

Q: What do you think the effect of more open relations with Cuba will be on local banks? Are local banks eager to follow Stonegate into the market because of Miami’s cultural and geographic proximity to the island? Or are they taking a more cautious approach and weighing their options?

A: Cuba’s recent policy shift has opened several doors for the financial services industry, but it is important to note there is still a long way to go before local banks begin developing relationships with Cuban counterparts. Their removal from the terrorism list was the first step; however, the embargo remains which means there are still limits on next steps. Until the embargo and restrictions are lifted, banks are encouraged to take precautions before engaging in business with Cuba.

Though Miami’s cultural and geographic proximity to Cuba may encourage some banks to develop correspondent banking relationships, not all institutions share their viewpoint.

It is FIBA’s job to educate our members on the impact these changes have, from regulations to the embargo, on our financial services industry.

Teresa Foxx

Current position: Chairwoman, FIBA Board of Directors (through June 30); director and general manager of Barclay’ Miami branch (11 years).

Education: BBA in accounting, Hofstra University, and MBA in finance, Fordham University.

Family: Married to Tony Artis with two girls: Tiana, 13, and Trinity, 15.

Hobbies: Running; currently training for her seventh marathon in October.

Charities supported: St. Jude’s Children’s Hospital, Leukemia & Lymphoma Society, Honey Shine, Chapman Partnership, Posse Foundation.

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