:: Documents
::
Bank Insolvency in the Caribbean: Law and Best Practice Conference
o
The Jamaica Deposit Insurance Corporation (JDIC) in association with the Caribbean Regional Technical Assistance Centre (CARTAC) held the first ever bank insolvency conference in the region. The Conference was held in Montego Bay, Jamaica, on March 24-26, 2010.
Under the theme ‘Bank Insolvency in the Caribbean: Law and Best Practice' with the sub-name ‘Detecting and Managing Banking Crises: Assessment of the Global Financial Crisis of 2007-2009’, the Conference was intended to facilitate dialogue between Caribbean and other professionals and enable participants to consider and identify best practices for addressing bank insolvency issues.
INVESTMENT IN FOREIGN CURRENCY DENOMINATED
SECURITIES –Report on Questionnaire findings
o
The Jamaica Deposit Insurance
Corporation’s “Policy for the Investment of the
Deposit Insurance Fund” (Investment Policy),
dated May 24, 2006 cites, inter alia, seven
investment objectives to guide the Corporation’s
investments. One of these objectives states that the
Corporation will seek “…to further minimise
overall risk by portfolio diversification”. In
keeping with this objective, the Corporation develop
guidelines for the investment in foreign currency
denominated securities. The
practice of other Deposit
Insurers (DI) provided valuable information on how
deposit insurance funds are managed worldwide and to
gather the required information, the JDIC surveyed a
number of Deposit Insurers through the use of a
questionnaire
o
The “Report on
Questionnaire findings” represents the
findings of the Corporation’s survey of the practice
of other deposit and provided important information
in respect of how foreign currency securities are
managed within the deposit insurance community.
-
Background
to the Jamaica Deposit Insurance Scheme
- In September
1995, the Government established a Task Force to
identify the main policy issues and legislative
requirements and to make recommendations for the
introduction of an explicit deposit insurance
scheme in Jamaica. The regulatory authorities
were of the view that a formal deposit insurance
scheme should be established to provide
stability and safeguard depositors' interest in
cases where financial institutions experienced
difficulties and had to be closed.
Arising from
the recommendations of the Task Force and the
deliberations of a Joint Select Committee, it
was agreed that a modest level of coverage both
in nominal and real terms would contribute
towards a satisfactory level of market
discipline. Large depositors would therefore be
forced to monitor the condition of their bank or
financial institution. It is for this reason
that the level of coverage was set at $200,000
per depositor. This limit represents over two
times Jamaica's per capita GDP which satisfies
the conventional maxim that coverage should be
about twice a country's per capita income.
The Deposit
Insurance Act (the Act) was passed by Parliament
in March 1998, and the Jamaica Deposit Insurance
Corporation (JDIC) formally commenced operation
on August 31, 1998. The Scheme is not intended
to be a substitute for adequate regulation and
supervision, or a panacea for the problems in
the banking sector which may emerge from time to
time. In this regard, steps were therefore taken
to strengthen the supervisory capacity of the
Bank of Jamaica . Significant amendments were
also made to the governing legislation of all
deposit-taking financial institutions.
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Deposit
Insurance Schemes - A Comparative Analysis
SPECIAL REPORT 1999
- The analysis
looks briefly at selected countries that have
deposit insurance schemes and the reasons why
these schemes were established, also the
principle of moral hazard and implicit versus
explicit deposit insurance. Countries in Africa,
Europe, Asia, the Middle East, and the Western
Hemisphere are compared in terms of types of
deposits covered, coverage limit, source of
funding and premiums charged.
-
IMF
Criteria & The JDIC
SPECIAL
REPORT 1999
- The
International Monetary Fund (IMF) has developed
a set of criteria or "best practices"
for the operation of deposit insurance schemes
in normal times. Jamaica's deposit insurance
scheme is examined to see how well it meets
those criteria.
-
Ministry
Paper #16 - The Deposit Insurance Scheme
- Summary
of International Study Group on Deposit Insurance
- Recognizing the
crucial role of deposit insurance in
contributing to confidence in the financial
system, the Financial Stability Forum ("FSF")
established a Study Group on Deposit Insurance
("Study Group") in December 1999. The
Study Group Chaired by Mr. Jean Pierre Sabourin,
President and Chief Executive Officer of the
Canada Deposit Insurance Corporation was
composed of officials from twelve (12) countries
representing a wide spectrum of deposit
insurance systems as well as the International
Monetary Fund (IMF) and the World Bank.
The mandate of
the Study Group was to study recent experiences
and to synthesize key lessons learned with
deposit insurance, sketch the policy trade-offs
presented by different types of deposit
insurance systems and examine the issues
involved in transitioning from blanket
guarantees to limited-coverage deposit insurance
systems. The Study Group was also asked to
assess the desirability and feasibility of
setting up international guidance on deposit
insurance, to evaluate what form such guidance
should take and who should take this work
forward. The report of the Study Group (the
"Report") submitted to the FSF in
March 2000 responded to these issues.
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:: Speeches
and Seminars ::
o The
Caribbean Regional Technical Assistance Centre
(CARTAC), in association with the Bank of Jamaica
and the Financial Services Commission launched its
Regional Financial Literacy Website (www.financialliteracycaribbean.com)
and Public Education Programme on Friday January
22, 2010 at the Jamaica Conference Centre. The
programme is in response to the global economic
crisis and the imperative for persons in the region
to improve their financial health. The Honourable
Audley Shaw, Minister of Finance & the Public
Service gave the feature address. Other speakers
included Brian Wynter, Governor of the Bank of
Jamaica; Rohan Barnett, Executive Director of the
Financial Services Commission; Antoinette McKain,
Chief Executive Officer of the Jamaica Deposit
Insurance Corporation, as well as representatives
from the Eastern Caribbean Central Bank and the
Central Bank of Trinidad & Tobago. The Eastern
Caribbean and Trinidad & Tobago have already
established financial literacy programmes in their
countries.
o
CARTAC,
set up in September 1999, is a regional agency based
in Barbados which provides technical assistance and
training in core areas of economic and financial
management at the request of its member countries.
o The
Jamaica Stack Exchange held its fifth Regional
Investments & Capital Markets Conference on January
18-20, 2010. The theme of the conference was “Revival
& Renewal: Growth Frontiers for the Regional Capital
Markets”. JDIC’s CEO, Ms Antoinette McKain
participated in a panel discussion on Leadership,
CEO Performance and Company Profitability.
- Chairman's
Address At JDIC's First Year Press Briefing -
December 1, 1999
- Shortly after
the JDIC celebrated its first anniversary a
press briefing was called to update media houses
and ultimately the public of the achievements of
the Corporation. The Chairman gave the address,
he spoke about the critical objectives of the
Scheme, also the Corporation's Mission
Statement, Corporate Vision, Strategic Plan,
Investment Policy, Public Education Programme
and concerns regarding Y2K issues. Special
mention was also made of the CDIC who assisted
tremendously in making the Scheme a reality.
- Banking
On Safety Seminars - Kingston, Jamaica
- Seminar
For Returning Residents - "Protecting Your
Money"
- Jamaicans
residing abroad as well as those who have
returned home play a very important role in
Jamaica's economy. It was with this in mind,
that the Corporation, as part of its public
education programme, invited returning residents
from all over the island to participate in a
special seminar entitled " Proctecting Your
Money" . They were informed not only of
deposit insurance issues but also about the
regulation of banks and other financial
institutions and some of the new measures put in
place by the Government to ensure sounder
banking practices . The main speakers included:
The
Deposit Insurance Scheme & the JDIC - July
24, 1999 .... Mr. Winston Carr,
CEO, JDIC
Monitoring
& Regulating Commercial Banks
Merchant Banks & Building Societies - July
22, 1999 .........
Mr. Randolph Dandy,
Snr. Legal Counsel,
Bank of Jamaica
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