Shaw to probe financial crash - To set up commission of enquiry
published:
Friday | February 22, 2008
Dionne Rose, Business Reporter
Audley Shaw, minister of finance and the public service.
- Ian Allen/Staff Photographer
Audley Shaw, minister of finance and the public service, says he will be recommending that a Commis-sion of Enquiry be set up to investigate what went wrong in the meltdown of the financial sector in the 1990s.
But he says the panel would not be convened before an audit of the Financial Sector Adjustment Company (FINSAC) is completed.
"This is something I am going to make a formal submission to the Cabinet on," Shaw told the Financial Gleaner.
"It has to be properly considered," he said, "the propose terms of reference will have to be put together."
Announced on Wednesday
Shaw initially made the announcement while addressing Today's Money Expo 2008 on Wednesday at the Jamaica Pegasus hotel in Kingston.
But he later said the enquiry would follow the audit of Finsac, the bail out entity used by government to rescue failing financial companies and to take over those that had failed.
Finsac was created to expedite recovery of failed banks during the period and to restructure the sector.
"That audit is on the way. I am not too sure how long it is going to take but it is a comprehensive forensic audit of FINSAC but that in itself will only be a prerequisite to the commission of enquiry," he said.
Shaw said the audit would assess the manner in which assets were disposed of by Finsac.
Asked about the purpose of the commission of enquiry, Shaw said it was important to learn from the mistakes made during the run up to the crash.
"Outside of the financial audit, I think we need a more comprehensive commission that can go into the details of it, the antecedents, how did it come about," he said.
The finance minister said it was important to catalogue what went wrong. He said the former government had promised that there would be criminal prosecution of some of these bankers but none of this took place.
"There are more questions than answers now, and because of the impact this had had on the economy ... we believe that this government had the duty to put in place a commission of enquiry, bring the thing to some kind of conclusive position where we can learn specifically and conclusively from the experiences and from the cataloguing as to how we got to that point," he said.
Addressing concerns raised by the Opposition spokesperson on finance, Dr Omar Davies, that Shaw's examination be a "witch hunt", the minister said failure to examine the events would be a dereliction of duty.
"This is no plan for a witch hunt because in a real sense the horse has gone through the gate already and we are left as a people holding a bag of $140 billion in debt," he said.
The meltdown, he noted, had to be documented for future generations.
"It is important that something of such monumental consequences to our economy, that there is a fulsome explanation. If we don't have it and don't put it on the record future generations are going to say 'these guys were crazy, they never even studied something like that, what caused it?'," he said.
