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Finance Minister Audley Shaw has stepped up his verbal flogging of commercial banks over their failure to significantly lower lending rates.
"We need the commercial banks to sharpen their pencils and come back with interest rates that are more attractive," Shaw declared on Wednesday, as he addressed journalists at the weekly post-Cabinet media briefing.
"The commercial banks will probably end up making more money than they make now because they will have more business, and more businesses will borrow money to invest as a result of the lower interest rates," Shaw claimed.
The finance minister has been on a crusade to convince commercial banks to lower lending rates for months, but so far, there has been little reaction from the banks.
Shaw says the Government has now created the conditions for lower rates, and the commercial banks have no excuse.
31-year low
He argued that the central bank open-market rates are now at a 31-year low, and that should encourage commercial banks to follow suit.
"These rates are keeping, they are holding steady, and I once again want to remind our partners in the commercial banking community that it is time for them to step up to the plate and reduce interest rates more aggressively," Shaw said.
He charged that the spread between government rates and the lending rates of commercial banks was just too wide.
"I don't know if there is any other country in the world that has spreads over the Govern-ment's treasury bill rates of more than 100 per cent," said Shaw.
According to Shaw, "This is unacceptable and it is untenable."
He pointed to the relatively low rate of inflation, the healthy net international reserves, and the stability in the foreign- exchange market as signs that the economy was on track.
The island's major commercial banks have shaved their lending rates in recent months, but the rates remain well above the single digits that businesses have been calling for.
Lower rates are available on special loan sales, which the banks sometimes offer.
http://jamaica-gleaner.com/gleaner/2...business2.html
"We need the commercial banks to sharpen their pencils and come back with interest rates that are more attractive," Shaw declared on Wednesday, as he addressed journalists at the weekly post-Cabinet media briefing.
"The commercial banks will probably end up making more money than they make now because they will have more business, and more businesses will borrow money to invest as a result of the lower interest rates," Shaw claimed.
The finance minister has been on a crusade to convince commercial banks to lower lending rates for months, but so far, there has been little reaction from the banks.
Shaw says the Government has now created the conditions for lower rates, and the commercial banks have no excuse.
31-year low
He argued that the central bank open-market rates are now at a 31-year low, and that should encourage commercial banks to follow suit.
"These rates are keeping, they are holding steady, and I once again want to remind our partners in the commercial banking community that it is time for them to step up to the plate and reduce interest rates more aggressively," Shaw said.
He charged that the spread between government rates and the lending rates of commercial banks was just too wide.
"I don't know if there is any other country in the world that has spreads over the Govern-ment's treasury bill rates of more than 100 per cent," said Shaw.
According to Shaw, "This is unacceptable and it is untenable."
He pointed to the relatively low rate of inflation, the healthy net international reserves, and the stability in the foreign- exchange market as signs that the economy was on track.
The island's major commercial banks have shaved their lending rates in recent months, but the rates remain well above the single digits that businesses have been calling for.
Lower rates are available on special loan sales, which the banks sometimes offer.
http://jamaica-gleaner.com/gleaner/2...business2.html
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