BOJ Not Becoming Super Regulator
Bank of Jamaica (BOJ) Governor Brian Wynter has moved to dismiss concerns that new financial regulations that are being introduced will see the central bank morph into a super regulator.
Financial sector players have taken issue with the system-wide regulatory powers that will be afforded the BOJ under the new financial regulations.
Lawmakers, last month, were set to debate amendments to the Bank of Jamaica Act, which would establish the Financial System Stability Committee - FinSys - as well as codify new powers for the central bank, including the right to inspect firms.
The amendments will also allow the BOJ to police the financial system. Referred to as "macro-prudential oversight", the BOJ Act proposes to hand the central bank enhanced powers to initiate inspections among a wider cross section of the financial sector inclusive of banking firms, lenders, financiers, money businesses, investment firms, securities dealers, private pension fund managers, insurance companies, and any business designated as a financial service by the central bank governor.
Addressing sector players at the Fourth Annual Anti-Money Laundering/Counter-Financing of Terrorism Conference recently, Wynter said that these additional powers did not mean that the BOJ would become a superregulator.
"These proposals have been persistently and erroneously described by some elements in the media as establishing Bank of Jamaica as a superregulator for the financial system. This is false and misleading. The proposed amendments leave existing regulatory arrangements for each of the regulated financial industries (insurance, banking, securities markets, pension funds, etc) unchanged. For example, the Financial Services Commission's mandate, responsibilities, and powers will remain undiluted," he said.
The global financial meltdown in 2008 has seen a wave of increased regulatory oversight in the financial sector across the world as regulators seek to identify risks more readily and put systems in place to buffer the global financial architecture against future meltdowns. According to Wynter, Jamaica has had to play its part in this process so as to ensure that its financial systems meet international standards.