“Tom fool” day in 1996 heralded the appointment of Derick Latibeaudiere as governor of the Bank of Jamaica (BOJ); fortunately he left on the eve of Halloween. In an article titled “Get that governor out of Nethersole place”, published on October 28, 2007 we called for the dismissal of Mr. Latibeaudiere so, for us his going is 2 years too late.
The appointment of Brian Wynter as governor is a bad joke. Mr. Wynter was recruited from Citibank by Dr. Omar Davies in September 1995 to become Deputy Governor in charge of Banking and Market Operations at BOJ, which ironically became vacant on the promotion of Mr. Latibeaudiere to Senior Deputy Governor. Mr. Wynter was technically demoted four years later (August 1999) in a reorganization, and his duties were assigned to another deputy governor Colin Bullock; however, new functions were specifically created for him, namely investor relations and as the bank’s Finsac liaison. It took another two years to arrange a comfortable dwelling for Mr. Wynter, and in August 2001 he was placed as the first Executive Director of the Financial Services Commission (FSC), which incidentally he was instrumental in creating. After 6 ineffective years he resigned on August 31, 2007.
Kept at the trough
During the financial collapse in the mid to late 1990’s the leadership team at the BOJ at some point included:
1. Derick Latibeaudiere- Governor
2. Colin Bullock- Deputy Governor Research and Economic Programming
3. Brian Wynter- Deputy Governor Banking and Market Operations
4. Audrey Anderson- Deputy Governor Bank Inspection
Colin Bullock was seconded for 3 years to Ministry of Finance as Financial Secretary in May 2005; there is no indication that the Minister of Finance, Audley Shaw was interested in retaining him at the end of his tenure in May 2008.
How and why Audrey Anderson is still a deputy governor is beyond us! This along with the appointment of Brian Wynter as governor demonstrates the incapacity and unpreparedness of the Bruce Golding administration to govern.
While in opposition, Mr. Shaw entertained the country by highlighting, and dramatizing numerous scandals perpetrated under the leadership of the PNP. He was therefore not unaware of the details of the scandals at the bank of Jamaica itself. Governor Latibeaudiere was by no means an innocent bystander in at least two scandals, one involved improperly authorized salary increase and the other massive low-interest loan.
The FSC was formed to regulate and supervise all entities providing financial services that do not involve deposit taking. On the other hand there is the Jamaica Stock Exchange (JSE) which is a self regulating body. Why do we have two regulators for the stock market, and why do investors pay twice for essentially the same service? Mr. Wynter is the man to ask, he played a significant role in the establishment of the FSC.
His ineffectiveness at the FSC was demonstrated in its handling of the Dyoll fiasco in December 2004. Again, from 2006 onwards he did poorly in stemming the rise of unregulated investment schemes.
The question is whether Mr. Wynter’s abrasive management style and his inability to forge consensus and make decisions is what is needed at the BOJ.
Interest rate conundrum
Over the past 3 decades the central bank has conducted monetary policy primarily to contain (reduce) inflation by managing exchange rate through movement in interest rate. What started as a short-term tool soon became entrenched, strangled the economy, and in the 1990’s contributed significantly to the demise of many indigenous financial institutions.
The new governor will be challenged to refocus the economy for growth and determine how best to invest the net international reserves.
For purposes of transparency, we urge the new governor to place his investments in a Blind Trust. The same suggestion was made in 2007 when Don Wehby became Minister without portfolio in the Ministry of Finance and Public Service. There is no indication that he did.
Source: Jamaica Gleaner