hefty legislative big this week’s agenda this quarter us

Daraine LutonSenior Staff Reporter

THE CHIEF parliamentarycounsel is currently preparingan Omnibus Banking Act, a

structural benchmark under Jamaica’sfour-year extended fund facility withthe International Monetary Fund(IMF).

The statute, which will, amongother things, see the Bank of Jamaicabeing vested with the authority toissue binding rules on financialinstitutions, must be passed by theend of March.

Phillip Paulwell, leader ofgovernment business in the House ofRepresentatives, served noticerecently that the last quarter of theparliamentary year will be an activeone.

Paulwell pointed to key IMF-required bills which must be passedbefore the parliamentary year ends.

The bills include an act to enactfiscal rules, the Omnibus BankingAct, a flexible work arrangementlaw, and the promulgation of a newelectricity act.

The Omnibus Banking Act will set out in one statute provisionscurrently contained in three statutes –the Banking Act, the FinancialInstitutions Act, and the Bank ofJamaica (Building Societies) Act andregulations.

“The omnibus legislation wouldalso set out the autonomy of thesupervisor of banks and vestsauthority to grant and revokelicences with the Bank ofJamaica,” a ministry papertabled in Parliament says.

Paulwell also told the

House that the Omnibus Banking Actwill provide a “consolidated supervisionof banks, near banks and buildingsocieties”, including consolidatedsupervision of groups of companies.

The IMF has signalled that it ispressing ahead for Jamaica toundertake the next round of reforms,including strengthening the fiscalpolicy framework, reforming thesecurities dealers sector, and enhancingpublic financial management.

Paulwell described the legislativeagenda as a “very hefty schedule”,but stressed that the Governmentintends to complete those works byMarch 31.

BANKRUPTCY ACT MISSING

Notably absent from the list ofIMF-required bills listed to be passedby March 31 is the Bankruptcy andInsolvency Act.

The bill, which was tabled in theSenate just before the Christmasbreak, was sent to a joint selectcommittee for consideration. Thecommittee is to be chaired byIndustry, Investment and CommerceMinister Anthony Hylton, and will

include Members of ParliamentPeter Bunting, Richard Parchment,Mikael Phillips, André Hylton,Audley Shaw, Pearnel Charles,Karl Samuda, and Delroy Chuck.It will also include SenatorsMark Golding, Norman Grant,Imani Duncan-Price, SophiaFraser-Binns, AlexanderWilliams and Nigel Clarke.

The Bankruptcy andInsolvency Act will repeal the 1880 Bankruptcy Act,which was last amended 19 years ago.

In the new act, theGovernment is proposingthat a bankrupt who makes afraudulent disposition of hisproperty before or after thedate of the initial bankruptcyevent has committed an offenceand is liable on conviction before aResident Magistrate’s Court to a fineof up to $1 million and/or up to oneyear in prison.

• www.jamaica-gleaner.com • gleanerjamaica • jamaicagleaner • BUSINESSTHE GLEANER, WEDNESDAY, FEBRUARY 5, 2014 C4

US$678.7MILLION

Estimate of thecurrent account

deficit for the fiscalyear to September

2013, a reduction ofUS$347.8 million or a 33.8 per cent

improvement whencompared to thecorresponding

period in 2012-13,says Finance andPlanning MinisterDr Peter Phillips.

2014

MMaarr 2200 Third test results and SDR

distribution

MMaarr 3311 Adoption of new fiscal rule

Finalise review of public

sector employment and

compensation

Broad tax reform takes effect

GOJ to implement

legislation to deal with

illegal financial operations

Omnibus banking law to

be enacted

JJuunn 2200 Fourth test results and

SDR distribution

SSeepptt 2222 Fifth test results and SDR

distribution

DDeecc 2222 Sixth test results and SDR

distribution

2015

MMaarr 2233 Seventh test results and

SDR distribution

JJuunn 2222 Eighth test results and

SDR distribution

SSeepptt 2211 Ninth test results and SDR

distribution

DDeecc 2211 Tenth test results and SDR

distribution

2016

MMaarr 2211 Eleventh test results and

SDR distribution

JJuunn 2200 Twelfth test results and

SDR distribution

SSeepptt 2222 Thirteenth test results and

SDR distribution

DDeecc 2222 Fourteenth test results and

SDR distribution

2017

MMaarr 2200 Fifteenth test results and

SDR distribution

THIS WEEK’S

BIGNUMBER:

Check here weekly for calendar updates

McPherse ThompsonAssistant Business Editor

IF CANADA’S banking systemwere a person, a suitor couldintroduce it to their parents: stable,resilient, prudently regulated, andrich. Similar to other advancedeconomy commodity-exportingcountries, Canadian banks havebeen among the most profitablesince 2008.

The country’s housing marketis a potential risk to financialstability, but the country’sgovernment-backed mortgageinsurance scheme would cushionany initial blow dealt by a crisis,according to the InternationalMonetary Fund’s (IMF) latestassessment of the country’sfinancial sector.

The report says the householddebt-to-income ratio has surgedin recent years, in large partrelated to high house prices insome areas, and this makes theeconomy more vulnerable in theevent of a shock. Mortgages andconsumer loans secured by realestate represent the singlelargest asset group for Canadianbanks. One-third of all non-performing loans are mortgages.

The report said the govern-ment has taken steps to imposelimits on government-backedmortgage insurance, but theIMF said the government coulddo more to limit the risk totaxpayers.

According to the report, datedFebruary 3, 2014, six federallyregulated banks hold 93 per centof bank assets, a relatively highconcentration in comparison to

countries such as the UnitedKingdom.

The federal authorities regulatethe majority of the financialsector, though a significantsegment comes under provincialregulations.

The IMF said the frameworkfor regulation and oversight iscurrent with internationalstandards, and is well coordinatedacross the different federaloversight bodies. But Canadalacks a single regulator to keep aneye on risks to the financialsystem as a whole.

PERFORMING WELL

“The Canadian financialsystem has performed remarkablywell over the years. This reflects acombination of a conservativeapproach to banking, effectiveregulation and supervision by aregulator which keeps close to itsmarket, and good coordinationbetween the federal authorities,”the IMF said.

The report said Canada is oneof the major 25 financial centresthat must undergo a regularreview of its financial health aspart of the IMF’s surveillance. Itadded that the global economiccrisis laid bare the devastatingeconomic consequences afinancial crisis in one countrycan have on the global economy.

Since 2010, countries withfinancial sectors that have thegreatest impact on globalfinancial stability have beenrequired to undergo in-depthreviews of their financial healthevery five years.

business@gleanerjm.com

Canadianbanks safe andsound – IMF

Hefty legislativeagenda this quarter

PAULWELL

IMF CALENDAR