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Develop Caribbean financial system to prevent other ‘Clicos’

Published: 
Tuesday, November 30, 2010

The financial system in the Caribbean needs to be further developed to prevent further cases like the CL Financial one. This according to Dr Maurice Odle, economic adviser to the Secretary General of Caricom. He was giving a review of the 2010 Caribbean Trade and Investment report which deals with trade, investment and the performance of companies in the region. “The third part of this report looks at the non-bank reforms. It analyses what has taken place after 2008 and the failure of CL Financial and the non-bank financial sector. What we need to do is develop our financial architecture. It is not in bad shape but it needs further development.

“It shows that problems can be systemic and not relegated to a single jurisdiction. This is what the CL Financial problem told us. We need to look at cross-border contagion effects and the entire financial system and not just one part,” he said. He was speaking yesterday at the launch of the 2010 Caribbean Trade and Investment Report at the Hyatt Hotel, Port-of-Spain. The report is released every five years. According to the report at least six Caribbean countries will experience negative growth this year. “We talk all the time about the persistent vulnerability of and lack of resilience of the Caribbean economies. This of course was starkly revealed because of the economic crisis. So we really need to think in terms of developing new development paradigms. So these issues are discussed in the report,” he said. He added that the report examines experiences over the last five years and also future strategic options and policy implications for the region. “It’s both retrospective but also forward looking,” he said.

He pointed out that there are not many “home-grown publications” in the region and the report fills many “gaps.” He also said many hemispheric reports are not every sympathetic to small Caribbean economies and that the data in the region is not readily available to decision makers. “It is hoped this publication fills an important void for analysing the regional integration process. It also should be noted that the national statistical departments they need to undergo serious re-tooling exercises,” he said. He called the process of compiling the document a “difficult” one. “This is a difficult exercise producing a resource with limited resources. The limited human intellect, financial resources and so on. We should be producing this report every year instead of every five years. It does take some work,” he said.

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