Ladies and Gentlemen on behalf of the Board of Directors and the management of the Jamaica Deposit Insurance Corporation (JDIC), I extend to all of you a very warm welcome.

The purpose of this Press Briefing is to share with you some of the main achievements of the Corporation since it began operation on the 31^st August 1998, or a little over a year ago.

I would like to begin by drawing to your attention the critical objectives of the Deposit Insurance Scheme. These are:

• To provide protection mainly to small unsophisticated depositors who are not in a position to assess the risks of the institutions in which they choose to put their savings. This is so either because most depositors are not generally able to undertake such risk assessments or there is insufficient information available to them, even if they were able to do so. The level of basic coverage under the Scheme currently stands at J$300,000 per depositor, per institution. At this level, approximately 90% of the number of depositors in the commercial banks, merchant banks, trust companies, finance houses, and building societies are fully covered.

• To assist in the restoration and maintenance of confidence in, and stability of deposit taking institutions. The scheme will reduce the probability of contagious deposit runs on these institutions which could jeopardize the health of the financial system as a whole.

• To provide the Government in conjunction with the Supervisory and Regulatory authorities with a more formal mechanism for dealing with problem financial institutions, with a view to protecting depositors. By replacing discretion with an established legal regime, the Scheme will allow for a faster, and more consistent administrative process.

Deposit Insurance by itself should not of course be viewed as a panacea for all the ills of the banking system. In late 1997, the Government took steps to strengthen the supervisory mechanism for banks and other deposit-taking financial institutions, and introduced significant amendments to the regulatory and legislative framework.

It should be particularly noted that the Corporation relies on the supervisory machinery of the Bank of Jamaica and it is of crucial importance that the Bank and the Corporation work closely together to ensure the success of the Scheme.

Let me now turn to the substantive issue of the accomplishments of the JDIC since its inception in August 1998. The Board of Directors met on thirteen (13) occasions which is significantly above the statutory requirement of at least six (6) meetings in each calendar year.

Arising out of these meetings and managements initiatives, the Corporation now has in place the following:

• A Mission Statement to guide and focus its operations

• An agreed Corporate Vision coupled with a set of Corporate Values.

• A three year Strategic Plan covering the period FY 1999/2000 to FY 2001/2002 to address the longer term issues facing the organisation.

• A Corporate Investment Policy.

• A comprehensive Public Education Programme.

The main objective of this Programme is to keep the public informed as to how best to protect their funds. Some aspects of the Programme are being implemented in collaboration with the Securities Commission, the Jamaica Stock Exchange and the Bank of Jamaica under the Theme "Protecting Your Money - It’s Your Business to Know."

The critical elements of our public education programme include the following:

• Advertising and publication of several features on the Scheme in the print and electronic media.

• Radio and television interviews (including JIS radio programmes)

• Distribution of Brochures on Deposit Insurance

• Hosting of public seminars.

In addition, several workshops have been held to educate the staff of financial institutions about the Scheme. Presentations have been made also to various community groups, service clubs, professional organisations and students across the island. The JDIC website was launched in September of this year and can be found at www.jdic.org.

In July 1999, JDIC hosted a Seminar at the Jamaica Conference Centre for the benefit of Returning Residents under the theme "Protecting Your Money". Over four hundred (400) returning residents from all over the Island attended and benefited from this Seminar. In October, representatives from the JDIC, the Securities Commission, the Jamaica Stock Exchange and the Ministry of Foreign Affairs visited several cities in the UK, USA and Canada to inform Jamaicans residing overseas of recent developments in the financial sector including the strengthening of the legislative framework, the roles and functions of the different regulatory agencies, and investment and savings opportunities in Jamaica’s money and capital markets.

• I consider the human resources of any organisation to be its most critical ingredient in achieving its ultimate goals. The Corporation in February 1999, engaged the services of a Human Resource Consultant to develop a comprehensive set of guidelines relating to compensation, terms and condition of employment, performance appraisal etc. This exercise was completed at the end of July 1999 and is being steadily implemented.

• I would like to place on record my deep appreciation to the Canada Deposit Insurance Corporation (CDIC) in general and to their President and Chief Executive Officer in particular, Mr. J.P. Sabourin for their technical assistance and consistent support in making our Scheme a reality. During the months of September and October 1998 and again in July 1999, the Corporation hosted senior staff members from CDIC who provided training and technical assistance in the following areas: Communication strategies, finance and internal control systems and payout policies and procedures.

• The Corporation is an independent statutory body it is naturally accountable to Parliament through the Minister of Finance. In this connection, the Deposit Insurance Act stipulates that the Corporation’s Annual Report together with its audited accounts should be submitted to the Minister not later than three months after the end of each financial year. The Corporation’s first Annual Report covering the seven month period August 31, 1998 to March 31, 1999 was submitted to the Minister on time and steps are now being taken to have it tabled in Parliament shortly.

• I would also like to use this opportunity to announce that the Chief Executive Officer, Mr. Winston Carr, has been elected to sit on a high level Committee (chaired by the President and CEO of the Canada Deposit Insurance Corporation) of Deposit Insurers drawn from all over the world to study issues relating inter alia to recent experiences with deposit insurance by examining systems that have worked well, those that did not, and the reasons why and synthesizing the key lessons learned. Mr. Carr will be travelling later this month to the CDIC, Ottawa, to attend the first meeting of the Committee. The report of this Committee or Study Group will be sent to a Financial Stability Forum which will be meeting in Basle, Switzerland in April 2000. We are delighted with this recognition which has been accorded to the Corporation given the fact that we are only a little over a year old.

• The year 2000 concerns of the Corporation relate primarily to the status of the Y2K readiness of the institutions covered under the Scheme, as well as to the equipment and systems utilised by JDIC. All JDIC’s software systems and equipment are Y2K complaint, and the Bank of Jamaica has kept us informed of the progress of our policyholders in identifying and addressing Y2K computer problems.

• JDIC derives most of its financial resources from the initial and annual premiums paid by its policyholders. The amount of initial and annual premiums paid by each institution is calculated on the basis of 0.1 percent of their insurable deposit base as at December 31, each year. Approximately $134.2 million was collected as initial premiums in 1998 and a further $141.2 million representing annual premiums was collected in November. The Corporation is obliged to invest the bulk of its resources in risk free Government Securities, such as treasury Bills and Local Registered Stocks.

As we look ahead to the start of a new millennium, we need to come to grips with the major challenges which will confront the Corporation. JDIC will strive to fulfill its mission as outlined in its Strategic Plan for the three-year period FY 1999/2000 – FY 2001/2002, and by doing so, gain credibility with both the financial community and depositors. It will act not only as a vehicle for deposit insurance but also actively contribute to the restoration of confidence and stability in the nation’s banking system. My impression is that the financial sector is now operating with greater caution, more prudence, and increased competence.

I am confident that in this climate, the Corporation will be able to build the necessary resources and expertise to deal with problems that might confront us in the future.

Ladies and Gentlemen thank you very much for coming.

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