Wednesday, June 19, 2013 12:27
CBL Boss Wants WAMZ Sticks To Reform
The Executive Governor of the Central Bank of Liberia (CBL) Dr. J. Mills Jones has cautioned the College of Supervisors of the West African Monetary Zone (CSWAMZ) to remain wedded to the ethics of reform, taking into account the specific circumstances of individual member countries.
Dr. Jones encouraged the delegates attending the ninth meeting of CSWAMZ in Monrovia to focus on a supervisory approach that will achieve tangible objectives.
Dr. Jones named those objectives as a deliver forward-looking, risk-based and supervision, at the core of intervention mechanisms to identify cross- border linkages and their associated risks as well as establish adequate surveillance tools to determine the effectiveness of the corporate governance system of banks and the competency of their executives.
Dr. Jones who was delivering the keynote address at the occasion said the delegates should also ensure consumers have the right information to make informed judgments and ensure that banks act in a more transparent and accountable manner.
Speaking further the CBL Boss also asked the delegates to ensure that banking system is capable of supporting sustainable economic growth and development, adding, “We must deliver meaningful and effective competition in the banking sector across the zone.”
Dr Jones said, “Achieving these objectives means that we must act individually and collectively to train and maintain high quality, experienced supervisors who are willing to make difficult decisions and command the respect of the banks they supervise.”
“It will also require that the College of Supervisors must be proactive, rather than reactive, in ensuring financial stability in the zone. Greater coordination between and among member countries of the College is critical to this process,” Governor Jones said.
Shedding some light on recent developments in the Liberian banking sector, Dr. Jones said, “There has been relative stability in the sector with majority of the banks having strong capital and liquidity positions far in excess of the regulatory requirements.” However he noted that the main challenge of the sector, which in his belief, may also apply to a number of the other member countries, is the high incidence of non-performing loans.
Governor Jones in concluding recognized the enormous support of WAMI and WAIFEM to the work of the College and noted that such collaboration among the WAMZ organs will lead to the timely realization of the dreams of the WAMZ.
Also speaking at the occasion Mr. J.H. Tei Kitcher, Acting Director General of the West African Monetary Institute based in Accra, Ghana said an important take-away message from the current global economic uncertainty is that developing countries, including the WAMZ member countries, should prepare for prolonged period of volatility in the global economy by re-emphasizing medium-term development strategies.
He said unlike the situation before the 2008/2009 crisis, developing countries today are more vulnerable to external shocks as generally, fiscal deficits, as percentage of GDP, are higher than they were in 2007, suggesting that there is less room for fiscal stimulus.
The WAMI official said external vulnerabilities have also increased, as current account balances have deteriorated on average.
He further noted that international reserves, however, remain at relatively comfortable levels, indicating that most countries would be able to deal with short-term fluctuations in capital flows.
“If conditions in the euro area continue to deteriorate, growth in developing countries could be severely affected and the rebound may not be as quick as it was in the 2008/2009 crisis, as there is less room now for counter-cyclical policies. There is therefore the urgent need for developing countries to rebuild policy buffers wherever possible,” he said.