Guyana urges banking supervisors towards college of regulators
– Dr. Ashni Singh says local financial sector growing at ‘a most commendable pace’ THE 30th Annual Conference of the Caribbean Group of Banking Supervisors (CGBS) convened in Guyana yesterday, with Finance Minister, Dr. Ashni Singh noting it is a time when the Region is facing challenges from the aftermath of the global financial crisis.
“Many of our economies are still in the process of coming up with a strategy for recovery and growth. The challenges of many of our economies, particularly as it relates to our smaller ones and the constraints on opportunities for diversification of our productive sector for growth are well known,” he told the assemblage at the Bank of Guyana (BoG) in Georgetown.
Noting that the issue is a subject for debate across the Region, Dr Singh told supervisors that the implications for the financial services will not be insignificant, as opportunities for growth in many jurisdictions are extremely limited and degrees of freedom in confronting the challenges are also inadequate.
Even as they reflect on the problems that confront the financial sector, such as regulatory structures and other subjects, they must focus on what is happening in the Region as a whole, particularly as it relates to faltering growth and how it is likely to impact on the financial services sector and how the sector rides through the difficulties in achieving the recovery, he advised.
Minister Singh said the Guyana Government has reflected on how the financial sector can be mobilised to contribute to growth and development and poverty reduction and proffered that there are initiatives which can be implemented to promote access to credit and growth in lending without compromising the stability of the sector.
He commended the BOG for the work it has done in supervising the financial services sector over the years and urged supervisors to reflect on the challenges that are confronting the Region and take advantage of the chance to share experiences.
Dr. Singh said he is hopeful that regulators will accelerate the establishment of the college of regulators as was put forward by Caribbean Leaders in the aftermath of collapse of Caribbean Life Insurance Company (CLICO).

ABSOLUTE PREREQUISITE
“Guyana has long recognised that a strong, stable, well regulated, well managed financial sector is an absolute prerequisite to macro-economic growth and development in our country. With this recognition in mind, we have endeavoured, over the years, to ensure the assembling of an architecture that would accommodate and promote such a financial services sector,” he stated.
Thirteen of the sixteen CBGS members are attending the two-day meeting and the Finance Minister, delivering the feature address, told them that Guyana has, over the years, ensured the enactment of the legislative prerequisites for a well regulated sector.
He cited the modern Central Bank Act, a Financial Institutions Act, Insurance Securities, Anti-Money Laundering and Countering the Financing of Terrorism Acts and Money Transfer Agencies, among other laws.
“The financial sector in Guyana has, certainly by most measures, reflected the objectives that we seek; that is to say strength and stability and, importantly, struck the desired balance between promoting and fostering and catalysing growth on one hand without compromising prudence and stability,” Dr Singh asserted.
He boasted that the financial sector in Guyana has been growing at a most commendable pace and said the key sector indicators have shown this. The dynamism in the financial sector, particularly growth in credit that has contributed to some of the real expansion seen locally over the last six to ten years.
Singh expressed the view that those who are tasked with regulating and supervising the sector need to be recognised and commended for their efforts over the years, particularly in responding to the environment in which they operate.
He acknowledged that it is not the easiest of times in the financial sector, both in the Region and globally, adding that there are examples all around of the challenges that confront it.

RAISED STANDARDS
Singh made reference to the fact that the financial institutions are strong, have been practising increasingly improved, raised standards of management and governance, including through the efforts of the BOG, which are, increasingly, transparent in their operations.
He posited that much of what occurred in the global crisis can be attributed to a wide range of issues, some emerging from a more domestic and regional reflection on experiences that confront regulators in the Region.
Governor of the BoG, Mr. Lawrence Williams, in his speech, said the Region met the challenges posed by the changing landscape and remained safe and sound.
He remembered that 30 years ago, financial commercial banks were primarily anchored in mediation, garnering deposits and making loans. But new innovations, distribution channels, advances in technology, deregulation on one hand and tightening of regulation on the other hand and emerging new competitors have changed the way banks now do business.
Williams said banks have now become more complex and spawn across the globe, apart from their expansion.
Three decades ago, bank failure was not a frequently mentioned jargon as in today’s society, where it is discussed at every financial forum, as the collapse of one could trigger a domino effect across many countries simultaneously, he admitted.
Williams said much emphasis has been placed to ensure that the banking sector remains safe and sound. However, there are non-banking institutions that could severely threaten such safety and soundness and he called for the same attention to be given those entities.
He revealed that the CGBS is considering expanding its scope in the future, to include regional non-bank regulators in view of the fact that both banks and non-bank financial institutions are integral to the safety and soundness of the financial system.

SPECIFIC MANDATE
The CGBS was established in 1983 under the aegis of CARICOM Central Bank Governors, with the specific mandate to enhance and coordinate the harmonisation of the banking supervisory practices in the English-speaking Caribbean, aimed at bringing them in line with internationally accepted practices.
The CGBS was, subsequently, expanded to include non-CARICOM territories and has been formally accepted as a regional grouping under the Basel Committee for Banking Supervision.
The CGBS membership currently comprises banking supervisors from sixteen regional jurisdictions, including CARICOM and non-CARICOM countries. The most recently admitted member is the international Financial Services Authority of Saint Vincent and the Grenadines, which gained admission on November 19, 2010.
The Chairmanship of the grouping rotates among CAIRCOM central banks and, in each case, it assumes the lead role in maintaining interface with the Basel Committee, on various technical issues as well as with international regulatory agencies on relevant matters, including the planning and organisation of various training courses for the benefit of all countries.
Guyana assumed the Chair for a term scheduled to end in 2013.