Jamaica’s Prime Minister Andrew Holness has declared that the government will not compensate for losses of failed financial institutions as a result of the inability to secure their clients’ funds.
He made the disclosure at Tuesday night’s annual Jamaica Stock Exchange capital markets conference.
“The government will not socialize any debt, and we will not socialize the failure of our banks to be prudential and to protect your customers,” Holness said.
“Were we to do that, it would send a very bad signal to the banks and investment houses that they can be negligent and expect the Bank (of Jamaica) to cover their negligence. That will not happen,” he further said.
Prime minister Andrew Holness said the socialization of debt landed the country in a catastrophe that took decades to resolve and “made the entire country poor,” and said the country should use the opportunity to fortify the regulations governing the sector.
Holness also said there would be “no political interference or political cover” into investigations of the fraud.
The Jamaican government recently announced that the United States Federal Bureau of Investigation (FBI) will assist local authorities in the investigation of the multi-million-dollar fraud at the investment firm, Stocks and Securities Limited (SSL).
Holness also noted the penalties for financial and white-collar crimes.
On Monday, Finance Minister, Dr. Nigel Clarke said the government is moving to review the financial sector legislation to apply harsher penalties for breaches.
Clarke said the review will improve the country’s ability to detect, investigate, and prosecute financial crimes in the banking, securities, insurance, and pensions sectors, with amendments to the Securities Act, Banking Act, Insurance Act, and Pensions Act.