Wait lazie nuh si dis? - Davies testifies at FINSAC Enquiry

[Karl]

Davies testifies at FINSAC Enquiry

2009-11-24 12:58:01 | (0 Comments)
Former Fianace Minister Dr Omar Davies is now on the stand at the enquiry into the operations of the Financial Sector Adjustment Company (FINSAC).

Dr Davies has so far been questioned about the other options which were available in the 1990’s to address the collapse of the financial sector.

He told the enquiry that while there were two major options available, the creation of FINSAC seemed to be the best decision at the time.

Questions were also raised as to why a recommendation by the International Monetary Fund to allow some banks to fail and shut down the system for two weeks in an attempt to clean it up was not considered.

The former finance minister said while he noted the recommendation no formal steps were taken to pursue it.

Dr Davies is expected to remain on the stand for the rest of the day.

The FINSAC enquiry is seeking to examine the circumstances that led to the collapse of Jamaica’s financial institutions in the 1990’s.

Retired high court judge Boyd Carey is presiding over the sittings.

[Jawge]

We are still following the slavery model of doing business (where it was the crown''s responsibility to shore up the planters' business. That was then because it was in the strategic interest of England. Since the info age the dynamics have changed).

What I can't understand is the premise of the anti finsac crowd: It's the govt. duty to see that their business stay afloat in any financial storm. How can this be?

[Jawge]

Ouch, Sorry I meant industrial age ( where you have info age) above.

[Karl]

Omar blasts ex-bankers

Omar blasts ex-bankers
Blames them for 1990s financial sector meltdown

BY PAUL HENRY Observer staff reporter
henryp@jamaicaobserver.com
Wednesday, November 25, 2009

FORMER finance minister Dr Omar Davies yesterday placed the blame for the financial sector meltdown of the 1990s on bad management and actions he described as "criminal" on the part of the executives of failed financial institutions.

Davies, who was answering a wide range of questions from his lawyer Michael Hylton, QC, during the enquiry into the meltdown, said that those responsible for the mess should be brought before the commission to give account.

Former Finance Minister Dr Omar Davies (in photo at right) responds to questions on his first day before the commission of enquiry into the financial sector meltdown of the 1990s and the role of Finsac yesterday at the Jamaica Pegasus Hotel in Kingston. In the the photo at left Charles Ross (left), one of the three commissioners, asks a question while chairman of the commission, retired high court judge Boyd Carey, listens. The other member of the commission is Worrick Bogle. (Photos: Michael Gordon)

He listed the principals of Caldon Financial, Century National Bank, Blaise Trust and Horizon, among those whom he said should be held responsible for the collapse.

Davies, who was giving evidence at the Financial Sector Adjustment Company (Finsac) enquiry at the Jamaica Pegasus Hotel in New Kingston, said that the only error his ministry made was to trust the word of the executives that new investments were being made in their institutions.
He said also that the bankers could not be trusted as they gave commitments to the finance ministry then backed out at the last minute.

When questioned about the finance ministry's procedure by retired Justice Boyd Carey, chairman of the commission, Davies agreed that he may have been naive.

In addition to Justice Carey, the commissioners are Charles Ross and Worrick Bogle.

Yesterday, the former minister in the People's National Party (PNP) Government spent the day defending the high interest rate regime of the then administration, saying that it did not wreck the economy, but helped to provide stability.

He, however, emphasised that he was not in favour of a high interest rate policy.

To groans from persons observing the enquiry, Davies commented that current interest rates were twice as high as they were under the PNP administration.

He also stoutly defended the role of Finsac, noting that it had accomplished all that it was established to achieve.
According to Davies, the Finsac intervention stabilised the financial sector, out of which came legislation that offer greater protection to investors.

He said further that the current strength of the island's financial sector was a direct result of these legislation, which led to the formation of the Financial Services Commission and the Jamaica Deposit Insurance scheme, among other things.

According to Davies, Finsac was the best way out of the crisis rocking the country at the time.

Under Finsac, insolvent insurance companies and banks were shut down and bad debt portfolio eventually sold to the Jamaica Redevelopment Foundation Inc. Real Estate assets of the failed companies were sold on the open market.

Under questioning from commission members, Davies said the Government at the time was not slow in responding to the crisis, as it received the auditors' reports into the activities - some criminal - of the financial institutions in November 1996 and that Finsac was formed in January 1997.

Davies argued that it would be difficult for a repeat of the 1990s meltdown as early alert systems were now in place that would prompt corrective action.

Davies is set to face questions until tomorrow, during which persons observing the enquiry will also be able quiz the former finance minister.
The enquiry continues today at 9:30 am.

http://www.jamaicaobserver.com/news/...X_BANKERS_.asp

[Karl]

Davies defends FINSAC

Davies defends FINSAC

Published: Wednesday | November 25, 2009



Dr Omar Davies testifies during the Finsac enquiry at The Jamaica Pegasus hotel in New Kingston yesterday. - Rudolph Brown/Photographer

Former Minister of Finance Dr Omar Davies has staunchly defended the establishment of the Financial Sector Adjustment Company (FINSAC).

Taking centre stage at yesterday's session of the FINSAC Commission of Enquiry, Davies said the only thing he regretted during the period was trusting some of the players in the banking industry to deliver on the promises they made during the financial crisis of the mid-1990s, which dealt a heavy blow to the Jamaican banking and insurance sectors.

"In retrospect, if there is one error, it was the deal we struck with attempting to work with some of the institutions," Davies said during the enquiry at The Jamaica Pegasus hotel in New Kingston. "Mr (Don) Crawford (head of Century National Bank) never kept a single commitment. When a group of local owners, they call themselves the 'Owners Club' ... they came to us with a proposal and we thought they were going to introduce capital and we thought we were close to a solution, and at the last minute Mr Crawford said they were trying to 'steal our bank' and the whole thing collapsed."

Davies said some of the individuals who were in the Owners Club have sold the notion that they have been robbed and he called for them to appear at the commission and tell the truth.

Prime objective
Davies, who headed the Ministry of Finance from 1993 to 2007, said FINSAC was the most viable option to deal with the crisis.

In a prepared statement, Davies declared "The prime objective in establishing FINSAC was to allow for the orderly intervention in the failed institutions to prevent a total loss of confidence in the financial system, to preserve the savings, insurance policies and pension funds of the public."

http://www.jamaica-gleaner.com/glean...ead/lead3.html

[Willi]

Who created the storm?

Dont be obtuse!

[Gamma]

come now willi...at THIS stage yuh start making those demands?

[Gamma]

he has to, whether he wants to or not .......

[Assasin]

At least he finally accepted that the high interest rate policy played a role.