Finance Minister Audley Shaw yesterday reassured Parliament that Jamaica's financial system is not endangered by the financial crisis in the United States.
"Depositors, policyholders and pensioners can rest assured that our financial system remains well capitalised, well supervised and has the strong backing of the central bank and the Government," Shaw said in a statement in the House of Representatives.

"I should also indicate that, in terms of additional challenges that may arise in raising capital on the international capital markets, this is being supplemented by the Government's proactive agenda in re-engaging with multilateral institutions on an aggressive basis over the past year, and is now beginning to see the finalisation of significant access to project and policy-based loans from the World Bank, Inter-American Development Bank and the Caribbean Development Bank, at attractive interest rates," Shaw said.

Shaw's statement came as a powerful Wall Street rally helped lift global markets a day after a near-meltdown as investor hopes grew on the prospects for a new US financial rescue package to ease the crisis.

The Dow Jones Industrial Average leapt 485.21 points (4.68 per cent) to close at 10,850.66, in the third-largest single-day point gain a day after the worst one-day point loss for the blue-chip index.

The Nasdaq jumped 4.97 per cent and the broad-market Standard & Poor's 500 index rallied 5.27 per cent, recovering a large portion of Monday's losses.

Shaw also stated that, from all indications, the potential need for US dollar liquidity by institutions over the next few months was only a small portion of the current net international reserves (NIR) of the Bank of Jamaica of US$2.2 billion. The NIR represents Jamaica's store of US dollar liquidity.

He said that domestic financial institutions have suffered minimal setback from their relationship with foreign institutions, and that a survey of the exposures of commercial banks, other deposit-taking institutions, securities dealers, insurance companies and pension funds showed that the overwhelming share of their foreign assets consist of Government of Jamaica bonds, the integrity of which is not in question.

Wide speculation that the current financial crisis in the United States could seriously affect local financial institutions has strengthened since Monday's rejection of a US$700-billion bailout proposal by the US House of Representatives.

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