Rethinking the framework for regulation of the Jamaican financial sector

Abstract

The Jamaican economy and the financial sector, in particular, suffered a liquidity and confidence crisis in the late 1990s, the repercussions of which are still being felt. Although the impact has largely been negative, the crisis highlighted the need for and has been the impetus for fundamental reform in the Jamaican financial sector. The Jamaican financial sector crisis of the late 1990s has been rationalised by reference to several historical and other events. Notwithstanding the level and type of analysis, the crisis remains a significant point of reference and in this paper it forms the fulcrum against which the pre-existing and current frameworks for regulation and supervision of the Jamaican financial sector are examined. In particular, the paper includes an overview of significant legislative, macroeconomic, social and other factors which impacted the crisis. It also highlights aspects of the theoretical and other principles which ought to be considered in financial sector law reform.