Tweet
Finsac and its aftermath
Tuesday, May 06, 2008
Dear Editor,
Over the past few months, and it has become more frenzied now, especially since the announcement in the budget debate about a commission of inquiry to probe what happened, I have read and listened to many arguments and tales of lives that were ruined by Finsac. However, most of this is coming from one source or only one section of the "victimised" - people who were debtors to the financial institutions that went belly-up.
As I remember it, Finsac was established as a means to protect the depositors, savers, and policy holders of the various financial institutions - banks and insurance companies - so that they wouldn't lose their life savings in some cases.
As someone with some financial training and work experience and knowledge of how the financial systems or markets work, I have been asking myself some questions. Was the Financial Sector Adjustment Company (Finsac) formed to bail out the bankers, shareholders, and the attendant debtors to these institutions, or was it to save the depositors and policy holders?
If this was the stated purpose, then I would love to hear from those whose life savings were saved by this entity and what would have happened if it didn't. I have some personal knowledge, as my father and other family members had savings in some of these institutions and know what would have and what actually happened to their savings.
We all must remember that we didn't have the deposit insurance scheme at that time, and I believe that the creation of the Jamaica Deposit Insurance (JDIC) is similar to what holds in the USA (FDIC). So if the taxpayers bailed out savers and policy holders and also the bankers and debtors, who then would bear any of the losses of the failed institutions or banks?
Also let's not muddle the debate and argue about whether it's government policy or the bankers and company executives that caused the problem. These two issues have to be examined differently and with their own merits and de-merits.There is the cause of the problem and the solution that was implemented to resolve the problem.
Dennis M Johnson
Miramar, FL
jano_238@yahoo.com
Tuesday, May 06, 2008
Dear Editor,
Over the past few months, and it has become more frenzied now, especially since the announcement in the budget debate about a commission of inquiry to probe what happened, I have read and listened to many arguments and tales of lives that were ruined by Finsac. However, most of this is coming from one source or only one section of the "victimised" - people who were debtors to the financial institutions that went belly-up.
As I remember it, Finsac was established as a means to protect the depositors, savers, and policy holders of the various financial institutions - banks and insurance companies - so that they wouldn't lose their life savings in some cases.
As someone with some financial training and work experience and knowledge of how the financial systems or markets work, I have been asking myself some questions. Was the Financial Sector Adjustment Company (Finsac) formed to bail out the bankers, shareholders, and the attendant debtors to these institutions, or was it to save the depositors and policy holders?
If this was the stated purpose, then I would love to hear from those whose life savings were saved by this entity and what would have happened if it didn't. I have some personal knowledge, as my father and other family members had savings in some of these institutions and know what would have and what actually happened to their savings.
We all must remember that we didn't have the deposit insurance scheme at that time, and I believe that the creation of the Jamaica Deposit Insurance (JDIC) is similar to what holds in the USA (FDIC). So if the taxpayers bailed out savers and policy holders and also the bankers and debtors, who then would bear any of the losses of the failed institutions or banks?
Also let's not muddle the debate and argue about whether it's government policy or the bankers and company executives that caused the problem. These two issues have to be examined differently and with their own merits and de-merits.There is the cause of the problem and the solution that was implemented to resolve the problem.
Dennis M Johnson
Miramar, FL
jano_238@yahoo.com
Comment