Wednesday, Nov 21, 2018

Caricom leaders want protection for depositors against failed financial institutions

Caricom leaders want protection for depositors against failed financial institutions
10 Sep
2018

Caribbean finance ministers have agreed on the urgent need for a deposit insurance system, to provide some protection for depositors against losses due to the failure of financial institutions.

According to Antigua and Barbuda's Prime Minister Gaston Browne, the measure is important, given the recent failure of some financial institutions in the region, including insurance companies BICO and CLICO.

The decision was taken at the sixth Meeting of the Caricom Council for Finance and Planning (COFAP) in Bridgetown on Tuesday, which was chaired by Browne.

Jamaica was represented by the Minister of Finance and the Public Service, Dr Nigel Clarke, who returned home on Wednesday evening.

“Even in the case of Antigua and Barbuda, we had perhaps one of the most spectacular bank failures, in which we had the ABI Financial Group that went belly-up. My government had to issue a deposit protection fund in the region of $250 million representing almost 10 per cent of our GDP,” Browne explained to the press after the meeting.

The ministers also approved, in principle, the objectives of the Caricom Credit Reporting Policy, which, among other things, provides for regulating the operations of credit bureaus and cross-border exchange of credit information within the community, further promoting regional growth and development.

Caricom Heads of Government, at their July meeting in Montego Bay had mandated COFAP to finalise these and other instruments ahead of next year's Heads of Government meetings.Caribbean finance ministers have agreed on the urgent need for a deposit insurance system, to provide some protection for depositors against losses due to the failure of financial institutions.

According to Antigua and Barbuda's Prime Minister Gaston Browne, the measure is important, given the recent failure of some financial institutions in the region, including insurance companies BICO and CLICO.

The decision was taken at the sixth Meeting of the Caricom Council for Finance and Planning (COFAP) in Bridgetown on Tuesday, which was chaired by Browne.

Jamaica was represented by the Minister of Finance and the Public Service, Dr Nigel Clarke, who returned home on Wednesday evening.

“Even in the case of Antigua and Barbuda, we had perhaps one of the most spectacular bank failures, in which we had the ABI Financial Group that went belly-up. My government had to issue a deposit protection fund in the region of $250 million representing almost 10 per cent of our GDP,” Browne explained to the press after the meeting.

The ministers also approved, in principle, the objectives of the Caricom Credit Reporting Policy, which, among other things, provides for regulating the operations of credit bureaus and cross-border exchange of credit information within the community, further promoting regional growth and development.

Caricom Heads of Government, at their July meeting in Montego Bay had mandated COFAP to finalise these and other instruments ahead of next year's Heads of Government meetings.

The COFAP meeting also considered an investment policy, an investment code, as well as an integration capital market beginning with the adoption of model securities legislation, Caricom reported.

On the issue of Caricom Member States being labelled as non-cooperative tax jurisdictions, the ministers urged a more collaborative approach with the European authorities and other relevant international bodies.

“This area remains an existential threat to the region and we are seeking to dialogue with various bodies and individuals within the EU at the highest political level, so that they can understand the consequences of their actions,” Browne noted.

He pointed to unilateral decisions taken by these bodies, including proposed sanctions and blacklistings that are now impacting the region.

“We will work collectively on this matter. In fact we're hoping that there will be certain interventions made within the next 30 days, that will hopefully bring some relief to the various countries to avert any potential blacklisting and curtailment of technical support or grant aid,” he added.

In the meantime, six Caricom Heads of Government, including current chairman Jamaica's Prime Minister Andrew Holness, have been attending the Ninth Meeting of the Prime Ministerial Sub-Committee on the Caricom Single Market and Economy (CSME) in Bridgetown.

Under Holness's chairmanship at the the 39th Regular Meeting held in Jamaica in July, it was agreed that the CSME Sub-Committee would have quarterly meetings to give urgency to the implementation of Caricom Single Market and Economy (CSME).

The Sub-Committee meeting was held on Wednesday, September 5 with discussions expected on issues affecting the implementation of the Caricom Single Market and Economy (CSME).

A number of issues were on the agenda, and were discussed at what was seen as a national preparatory meeting of high-level Government officials chaired by Barbados' Prime Minister Mia Mottley on Monday in Bridgetown, as well.

Issues relating to the contingent rights of citizens, such as health care, education, the single registration of international businesses, and the approval of automatic six-month stays to Caricom nationals, were among the areas discussed.