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Deputy Governor: Need to rebuild consumer confidence
The regional regulators of financial institutions operating in multiple jurisdictions are working on a modern crisis management plan for the banking sector given the fallout from the collapse of CL Financial and the Stanford Group, said Joan John, deputy governor of the Central Bank.
The idea was intended to provide a strategy for co-ordinating a response in the event of liquidity or insolvency of a multi-jurisdictional financial institution. “Alongside the development of this regional plan, T&T, like other Caricom countries, is in the process of creating a national crisis management plan. All these developments are designed to improve financial stability.
“Their scope speaks in part to how much the industry has developed over time. These changes inevitably involve costs, but the crisis has shown that these are likely to be far less than what could be required in the absence of adequate arrangements,” John said. She was speaking at Thursday’s Banking on the Future Summit 2012 held at the Hyatt Regency Trinidad hotel, located at Dock Road, Port-of-Spain.
John said the plan has been presented for the consideration of central bank governors. She said while it is believed T&T was relatively unscathed by the negative world financial events, much more needed to be done to keep the local economy strong.
She outlined five steps that could improve T&T, financial stability declaring board must set the tone for their operations with good governance practices from which employees can emulate, while developing new organisational models to better fit the new environment, as well as allow flexibility to respond more easily to whatever charges emerge.
“There is need for a special effort to help rebuild consumer confidence. I know that all our banks undertake initiatives to enhance the consumer experience. In the more advanced markets, competition has driven banks to embrace the newer technologies which enable them to provide a host of services to customers as and when needed.
“Our banks would need to do likewise or run the risk that other institutions, including non-financial institutions, move into their traditional markets.” “The sector needs to better manage and utilise IT solutions. I know that for years, many of our banks have been seeking to better align information technology with business needs.
Nevertheless, it is still the case that the industry has not responded sufficiently in utilising available technologies. “While I fully appreciate the difficulties involved in changing out legacy systems, the evidence suggests that doing so in a timely fashion would prove to me more cost effective and improve business productivity,” John said.
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