Government reviews bank laws
Noel Thompson, Gleaner Writer
Finance Minister Audley Shaw has indicated that the Bruce Golding administration is to promulgate bank insolvency legislation to deal more decisively with individuals and financial institutions which fail to adhere to best practices and the law.
"We are reviewing all the banking laws related to the Bank of Jamaica (BOJ) and the Financial Services Commission (FSC)," Shaw told delegates, stating that his ministry would play a greater role in monitoring financial institutions of all types.
Licensing process re-examined
He added that the licensing process would be re-examined, as there were too many loopholes through which too many illicit enterprises were able to operate. He added that there was an apparent lack of adequate legislation to lock them down decisively and early.
The minister was addressing delegates from across the Caribbean and other countries at a bank insolvency conference at the Hilton Rose Hall Resort in Montego Bay, St James, on Wednesday under the theme: Bank Insolvency in the Caribbean, Law and Best Practice.
Referring to the Bernard Madoff US$65-billion Ponzi scheme in the United States, whose principal was swiftly tried and incarcerated, Shaw said: "We must have that capacity in Jamaica and put systems in place that are very purposeful, direct and hard-hitting."
Shaw disclosed to delegates that for the past 15 years, Jamaica's average annual growth had been less than an anaemic one per cent and emphasised that the Government now has to work assiduously to change that pattern in an effort to put Jamaica on the right path in joining some of its neighbours in achieving growth rate of between six and 12 per cent annually.
Positive signs in the market
Although lagging behind, Shaw said Jamaica had started to see positive signs in the market, with the three major rating agencies regarding Jamaica more positively, as well as other fundamental issues that are demonstrating stability in the market.
Revisiting the 1990s collapse of the financial sector, Shaw said one of the good things which resulted from that was ensuring a revision of the BOJ Act and the establishment of the FSC and the Jamaica Deposit Insurance Corporation.
The conference is intended to examine the issues, open up discourse and potentially guide policy direction on important aspects of the structures relating to banking regulation, resolution and insolvency with specific reference to recent local, regional and international cases and structural reform through legislation and other actions in key world financial centres. The conference ends today.