Last week's introduction in the House of Parliament of a bill dealing with the establishment of a Financial Services Commission (FSC) in Barbados is an indication that we are closer to the actually fruition of a plan that has been undergoing development and has been talked about over the last few years. Minister of Finance Christopher Sinckler said the new body would ensure better management of financial institutions, particularly non-bank financial services institutions, which would be governed by the pieces of legislation developed and managed by the FSC.
Minister of Agriculture Dr David Estwick told the House that the establishment of the commission and the role that it would play in overseeing the operations of non-banking institutions would provide significant confidence to investors and ensure proper regulation to effect customer protection. The latter is quite important considering the experience of the last three years, where lapsed regulation was seen to be very telling. The absence of adequate oversight was viewed as one of the main reasons for the onset of the global financial crisis and the economic turmoil that followed.
Closer to home, a similar situation was seen in the region with the demise of CL Financial/Clico, which rocked the Caribbean financial landscape, and threw many policyholders and those people with links to associated companies into a state of panic. This situation was said to have developed because of a lack of adequate regulation, and according to Roger Cave, investment director with Fortress Fund Managers Ltd, regional taxpayers are now paying the heavy price for the collective failures of regulatory oversight.
Matter of urgency
Enhanced regulation has become a common theme at all local, regional and international meetings or conferences on financial matters, therefore it can no longer be business as usual where the management of the financial sector is concerned as this aspect needs to be fully taken into account from here on out. Deputy Opposition Leader Dale Marshall argued during the debate in Parliament last week that more time needs to be spent working out the details of the FSC and its operations. The argument can be made, however, that too much time has been spent getting us to this point and that the commission needs to be set up as a matter of urgency.
However, the Member of Parliament's comment does raise a pertinent issue, this being the need to ensure that we do all that is necessary to get it right. There is no sense in spending taxpayer dollars to set up a commission that fails to protect the very people that funded its establishment. There is also no sense in establishing a body that fails to enhance investor confidence to the point that it benefits the growth of the financial services sector.
In light of all of this, it is hoped therefore that Government has done the research necessary to make this a worthwhile project. From all accounts its necessity is unquestionable; however, mediocrity certainly should and would not be tolerated.