BOJ governance Bill for joint select committee

Senior staff reporter

Wednesday, October 24, 2018

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A joint select committee (JSC) of Parliament is being appointed to review the new Bill to Amend the Bank of Jamaica (BOJ) Act to strengthen the governance structure of the BOJ.

The Bill also provides for the modernisation of the bank, in keeping with international best practices, according to Minister of Finance and the Public Service Dr Nigel Clarke, in its Memorandum of Objects and Reasons.

Dr Clarke announced the members of the JSC chosen from the floor of the House as: himself, as chairman; Minister of Justice Delroy Chuck; Minister without portfolio in the finance ministry, Fayval Williams; Minister of state in the Ministry of Education, Youth and Information, Floyd Green; and Leslie Campbell, MP, for the Government; and, for the Opposition, spokesman on finance Mark Golding, spokesman on industry and investment Peter Bunting; and, spokesman on tourism, Dr Wykeham McNeil.

The Senate is expected to announce its members when it meets again, which is likely to be Friday.

Clarke told the House that the aim of the reform is to institutionalise “low, stable and predictable inflation indefinitely”.

“And therefore, as a single legislation, this represents one of the most important reforms that we would have done when we have completed this period of reform,” he noted.

He said that he wished that the Bill be referred to a JSC of Parliament, but prior to that it has to be read a second time in the House. He also thanked all who contributed to the drafting and tabling of the Bill.

“The central bank represents our collective savings, and for any country a central bank is a crucial institution,” Clarke told the House.

He said that the Bill seeks to improve the governance of the central bank — to strengthen and deepen the governance — and seeks to introduce transparency to monetary policy decisions and actions of the bank.

He also said that the Bill seeks to clarify the mandate of the bank, and to give it autonomy and independence in law, in the implementation of monetary policy.

He added that it would also ensure that that the bank is adequately capitalised at all times, with a dynamic capitalisation provision that if its capital falls below prescribed levels, then the bank will be capitalised, and if it rises above a certain level there would be distribution to the Government.

Golding said the Bill represented another important step in modernising the financial architecture of the country.

“We are coming from a place in which the country's finances have been dominated by the effect of high indebtedness, and that has required significant focus and sacrifice on the part of the Jamaican people and commitment from successive governments to bring that under control,” Golding stated.

He said that he looked forward to “robust and well-thought-out and constructive debate” in the JSC.

Clarke disclosed in July that the Cabinet had approved amendments to several laws governing Bank of Jamaica (BOJ) operations to make the entity more independent, and promised that the Bill would be tabled in Parliament in October.

He said that the Bill would amend the Bank of Jamaica Act, as well as the Banking Services Act and the Public Bodies Management and Accountability Act.

He also said that the changes are intended to enhance the BOJ's governance structure through clear demarcation and assignment of roles for policy decision-making and daily management.

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