MODERN insolvency laws would have reduced the cost of Finsac during the 90s meltdown, according to think tank Caribbean Policy Research Institute (CaPRI) .

The body wants Government to fast track passing legislative reforms in order to allow businesses to fail or restructure, in similar ways to developed nations.

During the 1990s meltdown some businesses were putatively denied that chance to recover.

“What I am prepared to say is that modern insolvency laws would provide a mechanism to support restructuring in some cases that may not have led to the job losses in the aftermath [of Finsac],” said Christopher Tufton co-executive director at CaPRI during a Monday Exchange at the Jamaica Observer headquarters in Kingston.

Earlier Tufton hinted that some 100,000 jobs were lost during that period.

The law was last updated around the period of the Second World War from its original formation in 1800s, experts indicated.

The International Monetary Fund requires the passing of modern insolvency laws as part of qualitative conditionalities under the country’s lending arrangement.

It’s aimed at providing the framework for fuelling new business formation and will facilitate the resuscitation of bankrupt business.

“We would have still had a Finsac,” responded Damien King co-executive director at CaPRI, adding that poor monetary policies and weak regulation mainly caused the meltdown. “Had we had better insolvency legislation then the cost of Finsac would have been less and would have manifested itself in fewer job losses and smaller (bad debts).”

Finsac (the Financial Sector Adjustment Company) was established by government in 1997 to recover bad debts and dispose of assets arising from the 90s’ meltdown which affected thousands of locally owned businesses, and cost the country approximately 40 per cent of its gross domestic product and the government over $120 billion.

Finsac goal was to restore stability to Jamaica’s financial institutions after a number of local banks and companies went under in the financial meltdown. However, some 20 years later the Finsac Enquiry was convened to examine the controversial collapse of a number of businesses but the commission itself became a matter of controversy.