Tue | Sep 26, 2017

FINSAC debt write-off approved

Published:Wednesday | June 7, 2017 | 6:29 PM
Reid – File Photo

Approximately 20 years after the Jamaican Government set up the Financial Sector Adjustment Company Limited (FINSAC) in the wake of the financial sector meltdown, the Cabinet has approved debt write-offs amounting to $106.2 billion.

Information Minister Senator Ruel Reid made the announcement this morning during a post-Cabinet press briefing at Jamaica House.

Senator Reid told journalists that with the disposal of assets now largely completed, the special vehicle institution and the Financial Institution Services (FIS) are now in the process of completing the divestment of remaining assets, managing litigation issues and accounting activities.

He said the aim is to ultimately wind up in another 12-18 months.

Over the years, FINSAC has sought to dispose of its interests in intervened entities to local and international purchasers.

Reid said Cabinet had given instructions in October 2016 for steps to be taken to wind up both FINSAC and FIS.

 

Information Minister Senator Ruel Reid

Meanwhile, Reid said the commission of enquiry which looked into the FINSAC intervention will be submitting its report to the government by later this year.

FINSAC was established in 1997 to intervene in the wider financial sector owing to the widespread liquidity and insolvency problems that engulfed the sector.

However, many persons ended up losing their businesses and homes and were left destitute following FINSAC’s intervention.

Many analysts have blamed the high-interest rate policy of the then People’s National Party administration of the 1990s which led to the financial sector meltdown.

At the same time, others blamed most local financial sector leaders at the time for taking irrational decisions, noting that the foreign-owned banks with greater supervision did not suffer the same fate.