Faye Jacobs, Executive Director of Caribbean Integrated Financial Services Limited (CIFS) is proposing the establishment of a regulatory banking body for the region.

One hopeful benefit of the Caribbean Single Market (CSM), as perceived by Ms. Jacobs, is that it will introduce a regional regulatory arm for the banking sector, separate from a regulatory arm for the financial services sector, in addition to country-specific ones.

According to Ms. Jacobs, with the CSM, there is the likelihood of rapid expansion of commercial banks and near banks, which will mean that the banking sector will experience a rapid growth in its lending portfolio. However, if there is insufficient monitoring, there will be a creation of non-performing loans.

As she explains it, underwriting rules may become relaxed in an atmosphere where there is growth in the banking sector, as players, perhaps too early, become lulled into a sense of security and wealth. “At this time, proper monitoring is critical and this is one main reason why a regional regulatory body is needed,” she explains.

A similar call for a regional regulatory arm in the financial services sector was made in November of last year, at the second annual conference of the Association of Caribbean Securities Regulators (ACRS), where Everton McFarlane, Director, Research and Policy at the Financial Services Commission (FFSC), suggested that the ACSR perform the role as regional financial services monitor.

A recognised expert in the areas of credit risk management, rehabilitation and management of non-performing loan portfolios, who shifted her focus to the training and development of banking staff following the mid 1990s banking-sector crisis in Jamaica, Ms. Jacob’s expertise is also sought outside of the region.

Last year, she actively participated in the 16th World Conference of Banking Institutes in Rome when she lectured on ‘The impact of the importation of external culture in the Caribbean markets’. A Jamaican, Ms. Jacobs has over 25 years experience in banking and has worked with a number of institutions including National Commercial Bank Jamaica and Grenada Bank of Commerce.

With that experience as a launching pad, Ms. Jacobs, through her consultancy CIFS, has, since 2002, trained personnel at the Eastern Caribbean Institute of Bankers and at institutions in Trinidad and Tobago, St. Vincent and the Grenadines, Barbados, Guyana, Grenada, Dominica and CARICOM associate member states the British Virgin Islands. With links to international banks, CIFS has, over the years, customised their courses to fit the small peculiarities of each CARICOM country.

Having lived in four CARICOM states and trained banking personnel in most countries throughout the region, Ms. Jacobs notes that there are similarities in areas in which banking can be improved. “There needs to be improvement in risk assessment region-wide. In most CARICOM countries, the weaknesses are noted at the underwriting stage,” she points out.

If given the chance to be involved in the region’s financial services integration at the policy level, Ms. Jacobs says that she will advise that a portion of the region’s gross domestic product (GDP) go toward staff training and development and continued technological advancement.

“Training and advancement in technology would improve operational efficiency and allow us to compete more evenly with international banks,” she says.

As she sees it, the region’s labour force - not just in the banking sector – “needs to be more aware of its neighbours and their cultural practices,” which often are not that disparate. This increased awareness, she says, would lessen any difficulties concerning free movement of labour and business. In fact, the consultant sees the “cultural myopia” as one of the obstacles to successful regional integration, not only in the financial sector, but in general.

In that respect, Ms. Jacobs suggests a re-branding of each CARICOM member state to reflect a more regional image. “Hopefully, one of the achievements of the CSM and the CARICOM Single Market and Economy (CSME), which is expected to follow in 2008, will be a re-branding of the region, which will create additional opportunities,” she says.

She continues: “We are not just a tourist region; we have many more aspects that could position us as an alternative in the global market.”

On the CARICOM integration process in general, Ms. Jacobs insists that there should be more regional arms assisting “the re-branding of the region, which would ensure the expansion of opportunities for each member state and the sustainability of the region as a whole.”

She also advises Jamaicans, in particular entrepreneurs and service providers, to be informed on the CSM and CSME and to properly position themselves for the benefits that should accrue. Ms Jacobs points to the instinctive durability of CARICOM nationals and she uses the region’s banking sector as an example.

“As it is, the region’s banking sector has survived and has shown profitability, despite the lack of economies of scale from which its counterpart in the developed world benefit. This means that we have the potential to be as good as any other player in the market,” she states.

In closing, she says that 2006 will be an “exciting year for the region, with new and emerging wealth creating possibilities,” as probable offshoots of the CSM.

“It is the dawn of a new day for us. The region has the potential to become one of the wealthiest and safest in the world. We have similar cultures and a similar history when compared to the European Union (EU) with its vast cultural differences, histories and languages. We ought to do it better than the EU,” says Ms. Jacobs.