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Bankers fall in line - Endorse Gov't's debt exchange but demand prudent fiscal management

Published:Friday | January 15, 2010 | 12:00 AM

Gary Spaulding, Senior Gleaner Writer

Key stakeholders in the financial sector yesterday warned the Bruce Golding administration that they would not let his Government off the hook if it fails to deliver on its promise of a prudent fiscal-management programme to supplement the debt-exchange initiative.

At the launch of the Jamaica Debt Exchange (JDX) yesterday, well attended by the gamut of sector interests at the central bank's downtown Kingston's offices, Golding reiterated the Government's commitment to fiscal discipline in its proposed medium-term economic programme.

Golding continued to appeal for widespread support for the JDX which he described as a voluntary contribution.

But in stark contrast, Finance Minister Audley Shaw declared that holders of government bonds who did not sign on to the JDX would not be allowed to "free ride and exploit other holders".

The prime minister conceded that the move was a political gamble. "I am prepared to take the political risk," Golding declared.

"My leadership will rely on the history and not the voters."

Dawn of new day?

Members of prominent financial interests endorsed the initiative, but argued that it must signal the dawn of a new day.

"I hope that the initiative will be accompanied by tax reforms and strong fiscal management … without that, we may be here again in three years," declared Minna Israel, president of the Jamaica Bankers' Association.

"We need to hold the Government accountable in achieving fiscal discipline and medium-term economic plan," asserted Bruce Bowen, Scotiabank's chief executive officer.

"This debt-exchange programme is not the end of the road, but the beginning," Bowen said.

"I am appealing to the Government not to squander the opportunity to develop fiscal discipline," declared the head of the Jamaica Money Market Brokers, Keith Duncan.

In reinforcing the necessity of the Government's medium-term development plan, the financial sector representatives assured the prime minister of their confidence in the JDX.

"We can begin to turn the corner, it's a pity that we had to do it at the behest of the multilaterals and the International Monetary Fund," Duncan asserted. "I call on all Jamaicans to stand up for Jamaica now."

Bowen argued that there was no perfect solution in a time of crisis. "What is quite clear is that it has to be done … We must get on board and support the solutions."