Gov’t Pursuing Twin Peaks Regulatory Model for Financial Sector
- The Government is pursuing the creation of a “twin peaks model” of financial sector supervision and regulation, which is being programmed for implementation within 18 to 24 months.
- Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, who made the disclosure, said that the model is intended to modify the existing sector-by-sector-based regulatory approach, which sees the Bank of Jamaica (BOJ) supervising deposit-taking institutions (DTIs), with the Financial Services Commission (FSC) having oversight for non-bank financial institutions.
- The new dispensation will see DTIs, inclusive of commercial banks, building societies, merchant banks, and credit unions, along with non-bank financial institutions, comprising securities dealers, insurance companies, and pension funds, being consolidated into one institution, the BOJ.
- In this regard, a separate regulator, the FSC, will be designated to oversee market conduct and consumer protection for the full spectrum of financial services.
- Market conduct and consumer protection regulation refers to the oversight of financial institutions to ensure that they are engaging in fair and ethical business practices and are treating customers fairly.
- Clarke explained that the proposed integration of the FSC’s prudential activities into the BOJ involves three components – Interim Management, Legal and Governance Reform, and Institutional Restructuring.
- These changes are being made to strengthen the sector’s supervisory capacity and there is currently an 18-24 months implementation timeline.
(Source: JIS News)