Susan Gordon, Staff Reporter
( L - R ) Grant and Frankson
Refusing to retreat from its claim that Jamaican banks collude in setting interest rates, the farmers' lobby yesterday vowed to continue its effort to prove its case despite a declaration by the Fair Trading Commission (FTC) that it found no evidence of such a practice.
"The battle is far from over," said Norman Grant, the president of the Jamaica Agricultural Society (JAS).
It was not immediately clear whether Grant also spoke on behalf of the Jamaica Manufacturers' Association which had joined the JAS in the complaint to FTC about the alleged collusion by banks and was also with the farmers' group in rejecting how the competition watchdog handled the issue.
"We don't accept that the Fair Trading Commission has done an extensive work," Grant told the Financial Gleaner. "The FTC has done a half-cooked approach and wants to bury it (the complaint)."
The two organisations first wrote to the FTC a year ago, expressing suspicion over the fact that commercial banks largely maintained the same 22 percentage point spread between what they paid on pass book accounts - an average 5.48 per cent - and what they charged their best customers, 22 per cent on average. Although rates have slipped over the past year, the banks have maintained an average 16-17 per cent on pass book and lending rates.
Collusive agreement
However, in a report last month, the FTC said there was no evidence of "a collusive agreement" between banks, a finding that was welcomed by the Jamaica Bankers Association (JBA).
But in a letter to this newspaper this week, Grant and JMA president, Doreen Frankson, said that they could not accept the FTC's approach in the case.
"They have informed us that they will close this case even though they have not discussed the findings with the complainants," they said. "Is there no avenue for appeal?"
The FTC's approach, they said, smacked of "arrogance and high-handedness".
Grant told the Financial Gleaner that the two organisations would set up their own investigation. But Dr. Kevin Harriott, the head of FTC's competition analysis and economics bureau, insisted that the agency's investigation was "extensive and thorough", conducted with its mandate of determining whether the environment was competitive.
The investigation, he indicated, focused on commercial banks and the relationship of the rates they charged with those set by the central bank on its instruments.
"FTC is not a price board," he said. "We are not concerned with high prices in a free market. We are concerned with 'how' prices are arrived."
