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Identify Economic Issues in the Jamaican Economy That Created the Need for Financial Regulation

In: Business and Management

Submitted By sscott12
Words 784
Pages 4
According to Ely (2008), “financial regulation is a form of supervision, which subjects financial institutions to certain requirements, restrictions and guidelines, aiming to maintain the integrity of the financial system. The regulatory body may be handled by either a government or non-government organization”. The Jamaican financial landscape consists of various financial institutions. These include banks, security brokers, pension schemes and insurance companies.
The main objectives of the financial regulator are usually:
• Market confidence – to maintain confidence in the financial system
• Financial stability – contributing to the protection and enhancement of stability of the financial system
• Consumers’ protection – securing the appropriate degree of protection for consumers.
• Reduction of financial crime – reducing the extent to which it is possible for a regulated business to be used for a purpose connected with financial crime. With the objectives being outlined, the Bank of Jamaica is the Central Bank of Jamaica that carries out the government’s financial regulation and supervision pertaining to all banks’ operations. The Bank of Jamaica, established by the Bank of Jamaica Law (1960), began operations in May 1961. The establishment of the Central Bank was in recognition of the need for an appropriately regulated financial structure to encourage the economy’s development process after independence. Although the Bank of Jamaica carries out the financial regulation of the Jamaican government; the Jamaican economy started having grave financial challenges in the mid-80s through to the mid 1990’s. The economic challenges and instability were mainly caused as a result of the Government's tight monetary policy, weak governance, poor central bank regulations, supervision and also deficiencies in the management of the failed indigenous banks. This emits a...

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