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The Gleaner - February 3, 2000

 

IMF: Name the debtors

- Government says disclosure would hamper recovery.

THE INTERNATIONAL Monetary Fund (IMF) wants the Government to publish the names and the amounts of all defaulting borrowers aided by the Financial Sector Adjustment Company (FINSAC) to enhance collection and accountability.

This is contained in the recently released annual IMF staff report on Jamaica, a full copy of which has been obtained by The Gleaner. The report also quotes the Government has saying the publication of names would hamper its rehabilitation of the economy.

At the start of the 61-page document's section headed Structural Issues, the question of whether bad debtors should be named was tackled by the nine-man IMF mission team that studied the performance of the economy.

The report said: "In order to improve collection on non-performing loans and enhance accountability the mission recommended that the list of names and amounts of all defaulting borrowers be made public."

It adds: "The (Jamaican) authorities took note of these recommendations, but expressed a view that publication of defaulters would perhaps make it more difficult to move ahead with corrective policies".

The news that the IMF's assessment team called for the publishing of names and details re-ignites an argument which has raged since the Government said it would bail-out the thousands of depositors and pensioners in banks and insurance companies.

Prime Minister P.J. Patterson, Finance Minister Dr. Omar Davies and Financial Sector Adjustment Company managing director Patrick Hylton have repeatedly said they would not publish names of depositors and claimed that the law would not allow it.

Allegations of political interference and bias have surfaced a number of times since FINSAC was set up in 1997 to administer the Government's bail-out plan.

FINSAC's gross obligations after taking over a range of banks, insurers and related operations was put at $95.2 billion at the end of September. Its non-performing loan portfolio was acquired for $28.8 billion and represented 10,290 accounts.

Some 794 have been subject to foreclosure or seizure of assets, largely real estate. Another 1,523 accounts with a value of $6.5 billion have been subject to restructuring and rescheduling. A total of $403.8 million in principal and interest payments had been written off at the end of September.

Minimal detail of who has benefited from the restructuring has been given out by FINSAC.

FINSAC boss Patrick Hylton argued last July that the depositors could not be named because of legal considerations. "We have maintained that the law pertaining to banker-customer confidentiality prevents us from disclosing the information to the public."

However, that defence does not appear to have stopped the IMF from calling for the names to be published with full details of which companies and individuals have benefited from state aid.

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