Thu | Jun 20, 2024

No more taxpayer rescue for busted financial firms

Published:Sunday | June 9, 2024 | 12:07 AM
Governor of the Bank of Jamaica, Richard Byles.
Governor of the Bank of Jamaica, Richard Byles.

Jamaica will introduce new legislation so taxpayers won’t bear the cost of rescuing troubled financial firms.

“Do not forget that when an institution fails, and the taxpayer has to draw the cheque, then it becomes a lifelong debt around your neck,” said Bank of Jamaica Governor Richard Byles, who made the announcement on Thursday at the annual luncheon of the Pension Industry Association of Jamaica, PIAJ, held in New Kingston.

He added that the Jamaican government would speak more on the matter in the future.

“This legislation is designed to not only make institutions stay safe, but the moment they start showing signs of weakness, to trigger a process that ensures that they do not become a liability to the taxpayer,” said the central bank chief. “That is coming shortly.”

The legislation is expected to form part of the ‘twin peaks’ reform programme that will make the central bank the regulator of all financial institutions, including insurance firms, investment houses, and fund managers, and reposition the Financial Services Commission as an overseer of market conduct and consumer protection.

Byles, now 73, said the reforms should be finalised in about two years, just around the time of his retirement.

“I retire in two years and two months,” said the BOJ Governor.

Meanwhile, PIAJ President Sanya Goffe used the occasion to continue championing new legislation for automatic pension enrolment in the private sector.

Byles indicated that the central bank, which will also to have oversight of the pension sector under the twin peaks reforms, was of like mind.

“It is the right thing at the right time, and you have my endorsement on that,” the BOJ governor said.

The private pension market was last valued at $746 billion in assets under management.

steven.jackson@gleanerjm.com