About FINSAC...

FINSAC Strategic Workplan

In order to achieve its objectives, FINSAC has planned its work in three broad "phases" to be completed over its expected five to seven year life span. The phases are known as Intervention, Rehabilitation and Divestment

Intervention usually involves FINSAC "stepping in" to assist troubled institutions with an injection of capital. This is done in order to protect the investments of depositors, policyholders and pensioners, which may otherwise be at an unacceptable risk. In exchange, FINSAC may acquire from the troubled institution a combination of equity, board seats and other assets. Equity will often be in the form of preference shares. To remove uncertain assets from the balance sheets, non-performing loans are frequently included in FINSAC's acquisitions. An agreement on overall terms, together with a rehabilitation plan, is negotiated with the owners and managers.

Occasionally, FINSAC's intervention may take the form of a take-over and/or closure. However, this course of action is a last resort, and is used only in the cases of deeply distressed institutions. When this happens FINSAC takes on the deposit liabilities of the intervened institution and places matching funds in replacement accounts at a stable, healthy institution. This has the desirable effect of ensuring that depositors in the failed institution do not suffer any loss and continue to have uninterrupted access to their deposits. The funds FINSAC dispenses in this part of the process are Government backed securities.


Rehabilitation is the name FINSAC has given to a range of activities, which follow intervention. Multiple causes have contributed to the non-viability of many Jamaican financial institutions. In the rehabilitation phase, all aspects of the sector's weaknesses are being addressed, and remedial action implemented.

Industry re-structure in the financial sector will be recommended by FINSAC. There are too many companies competing for limited funds in each industry, so that consolidation and rationalisation through mergers and closures is appropriate. Since foreign capital has been shown to be extremely beneficial to the building of a sound and strong financial sector, the balance between locally-owned and foreign-owned institutions may also need adjustment.

Appropriate arrangements have been made to deal with FINSAC's non-performing loan portfolios and to carry out strategies of foreclosure, refinancing, litigation and/or the calling of loans as appropriate to maximize the return on FINSAC's investment.

Regulatory reform has been addressed, so that a strong framework for proper standards and rules is established for Jamaica’s banking and insurance sectors in particular. New rules will be recommended, including regulations to cover capital adequacy, accounting, disclosure, transactions between related parties, large exposures to certain types of investments or industries, and restrictions on the type of business financial institutions may engage in. 

The Government of Jamaica has received funding from the IADB and the CDB to assist with the creation of the Financial Serviced Commission (“FSC”) supervisory bodies, with appropriate powers and mechanisms to ensure that the new rules and regulations are observed.


Divestment of all assets acquired will be the final phase of FINSAC's activities. The future role of government in the financial sector will be examined and recommendations made. "Approved buyer lists" will be drawn up, and the re-privatization process will then be completed.


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