Thu | Oct 6, 2022

... Bankers' wish list

Published:Friday | May 16, 2014 | 12:00 AM

The Jamaica Bankers Association, on Wednesday, laid out its concerns to the Joint Select Committee of Parliament and requested adjustments to the new Banking Services Bill, which aims to reshape the financial sector and tighten its regulation:

Counterparty exposure: It is being recommended that an impact assessment be undertaken to ensure that there is no unintended consequences for asset prices.

Determination of group capital and licensing requirements for financial holding company: Unclear how this will be computed and what the precise licensing requirements will be for financial holding companies. The consultation paper had contemplated that a deposit-taking institution could be the financial holding company. The bill, however, appears to require that the holding company be separate.

Appealing decisions of the Supervisory Committee: There should be a right to appeal all decisions of the Supervisory Committee in light of the expansive functions given to the Supervisor and Supervisory Committee under Section 7 of the bill. Four areas of appeal are allowed in the areas of: fit and proper determinations, personnel selection, external auditor selection, and Code of Conduct breaches.

The publication of balance sheet and profit & loss in relation to a foreign bank: Relevance unclear for publishing financial statements of the foreign bank to the Jamaican public if the capital base of the foreign bank is not protecting local depositors. Publication could lead to the inaccurate impression and, ultimately, to the argument that the balance sheet of the foreign bank is protecting the local business.

Auditors: It seems onerous and administratively burdensome to seek the approval of the supervisor, except on first appointment of the external auditor or a change in external auditors.

Response time from BOJ: Reduce from the proposed 45 days to 30 days (or 20 working days) and clarify whether the legislation is referencing calendar days or business days at relevant sections.

Definitions to be clarified: Interdependence, criminal negligence, electronic money, and key employee.