JIS News

Financial Secretary in the Ministry of Finance and the Public Service, Sharon Crooks, is reassuring persons with deposits at commercial banks, building societies, and other insured financial institutions, that their money is safe.
Over the past few weeks, the credit crunch in the United States economy has been fuelling concerns locally about the negative impact this could have on the Jamaican economy.
“With the opportunity of insurance being offered up to a maximum of $600,000 per depositor in each institution, depositors have been able to rest assured that their interest is protected. This is an admirable financial safety net especially at this time,” Mrs. Crooks said.
She was representing Minister of Finance and the Public Service, Audley Shaw, in an address to the 10th Anniversary Long Service Awards, held by the Jamaica Deposit Insurance Corporation (JDIC), yesterday (October 8) at the Alhambra Inn and Restaurant in Kingston.
The JDIC, she noted “has evolved strategically and operationally. It continues to contribute to the sense of stability within the financial sector, through the provision of insurance against the risk of loss of deposits held in insured financial institutions.”
“The Ministry of Finance and the Public Service has a keen interest in any institution that contributes to the level of confidence of investors, depositors in the financial market,” she said, hence the reason for the Ministry’s representation on the Board of Directors of the JDIC.
“As a country, we recently faced the effects of the alternative investment schemes followed by the systemic crisis being faced in the U.S. capital markets. As such, domestic financial institutions have faced minimal setbacks from their relationships with foreign institutions,” she said.
She informed of a survey of the exposures of commercial banks, other deposit taking institutions, security dealers, insurance companies, and pension funds.
“It showed that the overwhelming share of the foreign assets of our domestic financial institutions consist of Government of Jamaica Bonds, the integrity of which is not in question,” Mrs. Crooks said, assuring that “the Bank of Jamaica has stood behind the domestic institutions and there has been no disruption to the smooth functioning of our foreign exchange market”.
“We have our regulators to thank for insistence on conservative limits on the types and extent of the foreign asset holdings and strict maintenance of adequate levels of capital to back these assets,” she stated.
“Ultimately, the issue of exposure comes down to the need for liquidity to settle maturing obligations. From all indications, the Net International Reserves of the Bank of Jamaica can support the foreign exchange requirements. Depositors, policy holders, and pensioners can therefore rest assured that our financial system remains well capitalised, well supervised and has a strong backing of the central bank,” Mrs. Crooks said.
She reiterated Minister Shaw’s statement that “the Government has proactively programmed the raising of capital on the international capital markets, by reengaging with the multilateral institutions to access significant project and policy based loans at a competitive interest rate of approximately five per cent.”
In this regard, she informed that a delegation is leaving on Thursday (Oct. 9) for Washington DC in the U.S.A to meet with representatives from the World Bank, Inter-American Development Bank (IDB), and the Caribbean Development Bank (CDB), to secure these loan arrangements.
She assured that the financial regulatory arm of the Government is monitoring the developments both in the external and domestic markets daily, and by extension the Jamaica Deposit Insurance Corporation, is successfully executing its mandate in promoting stability and confidence in the country’s financial sector.