Court Ruling will Determine how Gov’t Deals with Unregulated Investment Schemes… says PM


Prime Minister, Hon. Bruce Golding says the ruling of the Court will determine whether or not the government has the legal powers to intervene in the issue of the unregulated investment schemes.
Mr. Golding said he has been in constant dialogue with the regulators of the Financial Services Commission and that there are two issues before the courts; one for which he expects a ruling soon; the other one for which no date has yet been set. But he said a lot hinges on the court ruling in the matter because it will determine whether or not the regulators have a basis for intervention.
The Prime Minister was answering questions about government’s position on the various investment schemes at the (Dec 6) Press Freedom and Corruption Prevention seminar at the Mona Visitors’ lodge at the University of the West Indies. Mr. Golding noted that if the court determines that the Financial Services Commission does not have a basis for intervention, then the question is going to be, whether the government should go to parliament to provide the legislative authority to allow for that intervention.
Mr Golding told the media managers that he did not subscribe to the view that government should so regulate business activity that if two people want to get together to go into a business venture, they must seek government’s approval. He said there were many laws on the books that regulate the lending of money. But he said ‘we have nothing that regulates the borrowing of money and therefore there are some essential legal issues that have to be examined’. He is of the view that there is a limit beyond which a government must not be required and should have no obligation to protect people.
The Prime Minister said if people chose to invest their money with agencies that fall outside the ambit of government’s legal powers, ‘then you take the risk and you must take responsibility for the risk that you take’. But Mr Golding said the government naturally must have a concern as to the impact that any fallout might have on the official financial sector because there is always a risk of contagion. He said he has been assured that the official system is safe and in tact as the banks have tried to secure their loans to persons who have borrowed from them and have gone and put their monies in these various schemes.
Mr. Golding said the banks which have extended unsecured loans are within their required limitations and the banks are sufficiently liquid that if any of them have extended the 3% or 4% of unsecured loans and are called upon to write off those loans, they can withstand this without any tremors to the system. His primary concern is to ensure that government protects the official system and ‘I am satisfied that this is being done’, Mr. Golding concluded.

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