BOJ to Establish Financial System Stability Committee

KINGSTON — The Bank of Jamaica's (BoJ) role in ensuring financial stability is to be significantly strengthened through the establishment of a dedicated body, the Financial System Stability Committee.

This decision, which has received Cabinet approval, was disclosed by BoJ Governor, Brian Wynter, during a recent presentation to the Institute of Chartered Accountants of Jamaica (ICAJ).

Mr. Wynter explained that complementary to the Central Bank's objective of ensuring stable prices is its “role of ensuring financial system stability”.

He observed that following the financial crisis of the mid-1990s, measures were undertaken to strengthen the financial system and these measures, he said, “contributed to the Jamaican financial system remaining well capitalised and liquid throughout the recent global financial crisis”. 

The system, he said also “remained robust” during and after the Jamaica Debt Exchange (JDX) as there was no call on the emergency resources, which were set aside in the Financial System Support Fund provided by the International  Monetary Fund (IMF). 

However, he argued that “notwithstanding this soundness” there was the need to bolster the system against systemic risks and the Government has been preparing a series of legislative reforms to enhance the supervisory and regulatory framework of the financial system. 

He informed that the BoJ Act is to be amended, to give the Central Bank overall responsibility for financial stability. 

These reforms, Mr. Wynter said, are aimed at reducing risks, strengthening the prudential framework of securities dealers, combating unregulated financial schemes, and improving the regulatory framework for collective investment schemes.

These reforms, together with the introduction of credit bureaux will ensure that the “financial system facilitates sustained economic growth”, he stated.

By Allan Brooks, JIS Senior Reporter