Tweet
EDITORIAL - Prelude to Finsac inquiry
published: Monday | April 28, 2008
During his tenure as finance minister, Dr Davies often lectured Jamaicans about the skittishness of financial markets and the need to be measured and reasoned in debates about the financial/economic environment lest we undermine confidence and damage Jamaica's interest.
Dr Davies also made a virtue of not making public information to which he became privy during the course of his job, even when what flowed from such information involved the expenditure of billions of dollars of taxpayers' money, as with the late 1990s bailout of banks and insurance companies in the aftermath of a financial sector collapse.
Indeed, this need for confidentiality, as a moral imperative and legal requirement, was part of the argument used by Dr Davies to resist demands by his critics for a public inquiry into the cause of the collapse and the government's response to it, which included the establishment of the Financial Sector Adjustment Company (Finsac), the vehicle used to facilitate the bailout.
Naming names
Last Thursday, Dr Davies broke his own rule. He named the current finance minister, Mr Audley Shaw, as one of the persons whose defaulted loan at a commercial bank was acquired by Finsac and who then failed to honour terms for the heavily discounted debt.
Although not naming names, the former minister also revealed that four current Cabinet ministers and a minister of state had loans that were acquired by Finsac. One minister was a shareholder in an institution that received a Finsac bailout.
Whatever the provocation, perceived or real, by the present administration, we believe that Dr Davies was wrong. In any event, he may have clouded any debate about what went wrong in the 1990s with an overburden of politics to the detriment of rationality of facts. Hopefully, that was not Dr Davies' intent.
We expect, of course, Dr Davies and his colleagues in the Opposition People's National Party (PNP) to say that they didn't start it and point to the posture and tone of Mr Shaw during the budget debate. They will point to Dr Davies' broader argument, a questioning of Mr Shaw's credibility and impartiality in any review of the financial sector meltdown and the recipe for recovery.
Substantial review
Mr Shaw, last week, formally announced that the government will establish a public inquiry into what went wrong and how Finsac and the agency to which it subsequently sold its bad-debt portfolio behaved. In the context of the financial sector collapse and the response to it, we feel it worthy of a substantial review. After all, it cost taxpayers more than $140 billion and was a significant part of the cause for the ballooning of the national debt. But, any such inquiry must be devoid of narrowly partisan politics and any attempt to sully personalities. While it searches for the truth, it must be respectful of the private affairs of people who did nothing wrong and sought no public spectacle.
It is up to Prime Minister Bruce Golding to ensure an inquiry that is independent, transparent and credible and not the public spectacle recent events suggest it can become.
published: Monday | April 28, 2008
During his tenure as finance minister, Dr Davies often lectured Jamaicans about the skittishness of financial markets and the need to be measured and reasoned in debates about the financial/economic environment lest we undermine confidence and damage Jamaica's interest.
Dr Davies also made a virtue of not making public information to which he became privy during the course of his job, even when what flowed from such information involved the expenditure of billions of dollars of taxpayers' money, as with the late 1990s bailout of banks and insurance companies in the aftermath of a financial sector collapse.
Indeed, this need for confidentiality, as a moral imperative and legal requirement, was part of the argument used by Dr Davies to resist demands by his critics for a public inquiry into the cause of the collapse and the government's response to it, which included the establishment of the Financial Sector Adjustment Company (Finsac), the vehicle used to facilitate the bailout.
Naming names
Last Thursday, Dr Davies broke his own rule. He named the current finance minister, Mr Audley Shaw, as one of the persons whose defaulted loan at a commercial bank was acquired by Finsac and who then failed to honour terms for the heavily discounted debt.
Although not naming names, the former minister also revealed that four current Cabinet ministers and a minister of state had loans that were acquired by Finsac. One minister was a shareholder in an institution that received a Finsac bailout.
Whatever the provocation, perceived or real, by the present administration, we believe that Dr Davies was wrong. In any event, he may have clouded any debate about what went wrong in the 1990s with an overburden of politics to the detriment of rationality of facts. Hopefully, that was not Dr Davies' intent.
We expect, of course, Dr Davies and his colleagues in the Opposition People's National Party (PNP) to say that they didn't start it and point to the posture and tone of Mr Shaw during the budget debate. They will point to Dr Davies' broader argument, a questioning of Mr Shaw's credibility and impartiality in any review of the financial sector meltdown and the recipe for recovery.
Substantial review
Mr Shaw, last week, formally announced that the government will establish a public inquiry into what went wrong and how Finsac and the agency to which it subsequently sold its bad-debt portfolio behaved. In the context of the financial sector collapse and the response to it, we feel it worthy of a substantial review. After all, it cost taxpayers more than $140 billion and was a significant part of the cause for the ballooning of the national debt. But, any such inquiry must be devoid of narrowly partisan politics and any attempt to sully personalities. While it searches for the truth, it must be respectful of the private affairs of people who did nothing wrong and sought no public spectacle.
It is up to Prime Minister Bruce Golding to ensure an inquiry that is independent, transparent and credible and not the public spectacle recent events suggest it can become.
The opinions on this page, except for the above, do not necessarily reflect the views of The Gleaner. To respond to a Gleaner editorial, email us: editor@gleanerjm.com or fax: 922-6223. Responses should be no longer than 400 words. Not all responses will be published.
Comment