Delinquencies Resulted From Personal Choices - JRF Boss

[Skeng DX]

The Jamaican Redevelopment Foundation (JRF) has knocked the high interest-rate argument as the major rationale for the huge delinquencies on loans in failed financial institutions during the 1990s, suggesting instead that it was a case of debtors 'robbing Peter to pay Paul' or borrowers otherwise exhibiting an unwillingness to repay.

Jason Rudd, chief executive officer of JRF, the American outfit to which FINSAC sold its non-performing loan portfolio, said much of the discussion about how the debts became delinquent has focused on increasing of interest rates and compounding the interest by the legacy banks as the unilateral reason.

However, JRF has itself reviewed the accounts and found the statements being made to be largely untrue, in that only a few accounts had been affected in that regard, Rudd said in testimony last week to the commission of enquiry into the meltdown of the financial sector.

read more @ http://jamaica-gleaner.com/gleaner/2...business3.html

[Me]

Yet in the US a bank is blamed if they make a loan at 70% interest to someone, who cant afford it. Wonder what he thinks the credit departments were doing.

The man them going hard with the cover up.

[Willi]

More propaganda.

[Mosiah]

Yet in the US a bank is blamed if they make a loan at 70% interest to someone, who cant afford it. Wonder what he thinks the credit departments were doing.

The man them going hard with the cover up.

True. But is that how it should be, in your opinion?

[Me]

If a company makes a loan to someone they know can't afford it, then yes they should be blamed. If an industry or govt doesn't put a limit on what a client's interest rate can be reset to, then that is poor on their part.

I saw people during that time dashing away money and living above them means and trying to jump on the finsac wagon.. i don't feel sorry for them.
On the other there were quite a few who got destroyed because of those policies. Knowing the level of debt that is typical required for manufacturing, capital intensive industries, I am not sure what the govt thought would happen beyond their friends getting big banking fees for underwriting debt and large interest returns from buying the debt.

[Gamma]

If a company makes a loan to someone they know can't afford it, then yes they should be blamed. If an industry or govt doesn't put a limit on what a client's interest rate can be reset to, then that is poor on their part.

isn't that activity REGULATED? if not why not and if so, HOW could they allow that to happen?

[Karl]

If a company makes a loan to someone they know can't afford it, then yes they should be blamed. If an industry or govt doesn't put a limit on what a client's interest rate can be reset to, then that is poor on their part.

I saw people during that time dashing away money and living above them means and trying to jump on the finsac wagon.. i don't feel sorry for them.
On the other there were quite a few who got destroyed because of those policies. Knowing the level of debt that is typical required for manufacturing, capital intensive industries, I am not sure what the govt thought would happen beyond their friends getting big banking fees for underwriting debt and large interest returns from buying the debt.

So the banks were at fault for lending to those who could not afford to repay?

Well that would mean those businesses would go under earlier! Right?

So the persons who borrowed sums they know they could not repay were 'asses'...poor managers.

So their businesses went under later! Right?

So the policies of the high interest rate regime should have had the borrowers doing the simple 'one on one' math...and taking alternate paths with their businesses. The decisions were straight-forward - Get out of business or modify or change...adapt to the envronment to ensure having success. Yup! - adapt...even if it means ghoing down a different path. The actions MUST MAKE SENSE!

Taking STUPID ACTIONS and then whinning is not an option if one wishes to continue in business.

As I heard somewhere - If you are in the business of manufacturing or selling shoes and everyone starts 'walking barefoot'...then you had better give up the shoe business and find some other thing to do.

[Me]

Clearly you missed the part about resetting rates in you essay to save face for you drinking buddies.

[Gamma]

it not so clear yuh nuh, him have the ability to disregard it whether is relevant or not ... is a gift!

[Willi]

What is the debate. The issue is clear cut.

Omar is an unmitigated disaster and the fact that some cant se this explains why Jamaica is in many ways a basket case, when it should be a beacon of light and prosperity.

Even the cultural values we have are among the best according to a report I got today. The really one think that holds us back is our short -termism and willingness to follow sweet mout.

[1of1]

karl nuff people couldn't get loan dem time enu, so mi nuh know how some man get millions of dollars dem time fi borrow

[Karl]

Clearly you missed the part about resetting rates in you essay to save face for you drinking buddies.

I was there! ...and working in a business where foreign exchange rate as it related to need to purchase...and as it related to disposing of what was bought...making a profit for repurchase and ongoing trading was the business.

The climate was as it was, and we had to deal with it and keep the business viable. As fact, the company grew. Is today one of our largest and most successful companies. The managers and the directors adapted to the environment for success.

They are still doing the same today. Everyday the job at improving the bottomline...tighten up areas where there is leakage or and improving efficiences...predicting changes in the business environment and planning for same...constantly planning for all contingencies is a way of life...it is the culture of the business.

Many, many of our local businesses the managers and directors cannot even wrap their heads around the idea of constantly working at that. They just want to see profits and they shutdown that need to constantly strive for more and more efficiency.

Businesses grow or die. There is no middle ground. There are bad managers holding back the island.

Oooh by the way, my 'drinking buddies' are found among both JLP and PNP and no P.