A type of ‘informer fi dead’ culture alive in financial sector
Just as Jamaica seemed to be overcoming the tragic impact of the 1990s financial meltdown that led to the infamous Financial Sector Adjustment Company (Finsac), up comes the Stocks and Securities Limited (SSL) débâcle, raising the question as to what have we learnt since then.
One of the clear takeaways from the era of Finsac is that, to this day, there has been little clarity within the public sphere about what really caused the meltdown that hurt so many trying Jamaicans.
To be sure, the SSL scandal is no Finsac, but its impact on public perception — driven by a famous victim in Mr Usain Bolt — might not be much less devastating in respect of generating fear in the minds of Jamaicans about the security of investing in the sector.
In the place of information, what we had from the Finsac crisis was a dark hole of charges and counter-charges by politically partisan interests, obscuring the important lessons we should have learnt, especially about regulating and monitoring the financial sector.
In the case of SSL, the lack of straight up information about the company’s decade-long operations with so many weaknesses is staggering. Like the Roman Pontius Pilate, everyone, at every level, seems to be washing their hands of the estimated $3 billion stain. Quid est veritas?
There is an appearance of a conspiracy of silence among people in the financial sector. From the historical absence of whistle-blower action it can be concluded that a type of “informer fi dead” culture exists within the sector. Out of seeming fear of reprisal, these people see no evil, speak no evil and hear no evil.
In their apparent panic, all the financial institutions have unleashed their public relations arsenal, asking the public to take them at their word that their money is safe, even though we know there is some inherent risk in investing.
A known characteristic of Jamaicans is their strong distrust in “the system”, giving way to gossip and rumourmongering, with the information jungle that is social media waiting to fill its ever hungry belly. This can only be successfully counteracted by truth-telling.
We must also factor in the interest that is being shown globally in the SSL mess, because of Mr Bolt’s loss, and the invoking of the United States Federal Bureau of Investigation (FBI), which lends it an air of international intrigue.
The involvement of the FBI suggests there is an American interest beyond just helping out a friend, since this is not part of the natural remit of the agency. We expect that the Jamaican Government will take the country into its confidence on this.
For this reason, Prime Minister Andrew Holness and Finance Minister Dr Nigel Clarke must follow through on their promise to leave no stone unturned in getting to the bottom of the SSL scandal, as well as to fix the regulatory system, starting with the hapless Financial Services Commission.
The measures outlined by Dr Clarke, if carried out effectively, will help to restore local and international confidence in our financial system. They appear to be well thought out and even though some fallout will be expected in the short term, the important securities sector and the country will benefit in the longer term.
We need not stress that speed is of the essence. God forbid another SSL-type scandal should hit us now.