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EDITORIAL - Opportunity to review BOJ
Published: Monday | November 2, 2009
While the Golding administration, and particularly Finance Minister Audley Shaw, was never fully at ease with Derick Latibeaudiere's stewardship at the Bank of Jamaica (BOJ), there is no gainsaying that his departure last weekend was sudden and unsettling.
For, despite the publicly aired difference between Mr Shaw and Mr Latibeaudiere over the central bank's interest-rate policies, Mr Latibeaudiere not only maintained his job two years into Mr Shaw's tenure but, up to last week, was leading, at the technical level, Jamaica's negotiations with the International Monetary Fund for a US$1.2-billion loan agreement. This suggests that something precipitous developed last weekend, which either the BOJ governor, or Mr Shaw or the other members of the board of the central bank felt made Mr Latibeaudiere's continued leadership of the bank untenable.
If this is indeed the case, it is not sufficient, we believe, to just note Mr Latibeaudiere's departure from the central bank, including 13 years as its head, and move on - which is all that was done in last weekend's press statements.
Need for transparency
A fuller explanation, with further and better particulars, is important for several reasons, not least of which is the need for transparency in the managgement of the public's affairs, including the context within which Mr Latibeaudiere's successor, Mr Brian Wynter, will assume the job and the expectations the public should have of him. Additionally, there have long been public discussion and debate about the role, structure and management of the central bank, which Mr Latibeaudiere's resignation allows us to revisit without the weight of his lengthy period in office and the ingrained positions usually inherent in long incumbencies.
If substantive policy differences between Mr Latibeaudiere and the administration were significant to his departure, it is important that people know what exactly these were. For they will have an impact on the administration's economic strategies and, thereby, establish parameters within which Mr Wynter can perform his job.
Among the administration's implied criticism of Mr Latibeaudiere were that his monetary policies rested too heavily on usually high interest rates, that there was a lack of empathy for the private sector, and that he did not bring creativity to policy formulation.
Implicit in Mr Wynter's appointment is that he will bring the intellect, technical skills and imagination required to chart a new course. It is, therefore, important that his ability to do this is not circumscribed, including via programmes to which the Government may now be committed.
Independence was limited
Mr Latibeaudiere often championed his independence as a central banker, even though the BOJ was not, in the classic sense, an independent central bank. That independence was limited not only to the BOJ's formulation and implementation of monetary policy, but by its internal administration.
Indeed, the governor's chairmanship of the BOJ's board enhances his authority and, during his time, Mr Latibeaudiere has had disagreements with board members, including some who felt strongly enough about issues as to resign. Dr Jeffrey Pyne, who was apparently disquieted over aspects of the remuneration of bank staff, was the latest of these.
It is, perhaps, a good opportunity, before a new governor settles in and entrenches his personality, to have a full debate on what sort of bank is best for Jamaica. At the very least, the country should debate and settle whether the BOJ should have what amounts to an executive chairman; that is, the governorship and the chairman of the board residing in the same person.
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.
http://www.jamaica-gleaner.com/glean...cleisure1.html
Published: Monday | November 2, 2009
While the Golding administration, and particularly Finance Minister Audley Shaw, was never fully at ease with Derick Latibeaudiere's stewardship at the Bank of Jamaica (BOJ), there is no gainsaying that his departure last weekend was sudden and unsettling.
For, despite the publicly aired difference between Mr Shaw and Mr Latibeaudiere over the central bank's interest-rate policies, Mr Latibeaudiere not only maintained his job two years into Mr Shaw's tenure but, up to last week, was leading, at the technical level, Jamaica's negotiations with the International Monetary Fund for a US$1.2-billion loan agreement. This suggests that something precipitous developed last weekend, which either the BOJ governor, or Mr Shaw or the other members of the board of the central bank felt made Mr Latibeaudiere's continued leadership of the bank untenable.
If this is indeed the case, it is not sufficient, we believe, to just note Mr Latibeaudiere's departure from the central bank, including 13 years as its head, and move on - which is all that was done in last weekend's press statements.
Need for transparency
A fuller explanation, with further and better particulars, is important for several reasons, not least of which is the need for transparency in the managgement of the public's affairs, including the context within which Mr Latibeaudiere's successor, Mr Brian Wynter, will assume the job and the expectations the public should have of him. Additionally, there have long been public discussion and debate about the role, structure and management of the central bank, which Mr Latibeaudiere's resignation allows us to revisit without the weight of his lengthy period in office and the ingrained positions usually inherent in long incumbencies.
If substantive policy differences between Mr Latibeaudiere and the administration were significant to his departure, it is important that people know what exactly these were. For they will have an impact on the administration's economic strategies and, thereby, establish parameters within which Mr Wynter can perform his job.
Among the administration's implied criticism of Mr Latibeaudiere were that his monetary policies rested too heavily on usually high interest rates, that there was a lack of empathy for the private sector, and that he did not bring creativity to policy formulation.
Implicit in Mr Wynter's appointment is that he will bring the intellect, technical skills and imagination required to chart a new course. It is, therefore, important that his ability to do this is not circumscribed, including via programmes to which the Government may now be committed.
Independence was limited
Mr Latibeaudiere often championed his independence as a central banker, even though the BOJ was not, in the classic sense, an independent central bank. That independence was limited not only to the BOJ's formulation and implementation of monetary policy, but by its internal administration.
Indeed, the governor's chairmanship of the BOJ's board enhances his authority and, during his time, Mr Latibeaudiere has had disagreements with board members, including some who felt strongly enough about issues as to resign. Dr Jeffrey Pyne, who was apparently disquieted over aspects of the remuneration of bank staff, was the latest of these.
It is, perhaps, a good opportunity, before a new governor settles in and entrenches his personality, to have a full debate on what sort of bank is best for Jamaica. At the very least, the country should debate and settle whether the BOJ should have what amounts to an executive chairman; that is, the governorship and the chairman of the board residing in the same person.
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.
http://www.jamaica-gleaner.com/glean...cleisure1.html
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