In a well-received address to the annual Jamaica Securities Dealers Association Breakfast Forum on February 13, 2019, Minister of Finance and the Public Service Dr Nigel Clarke started by noting that “it was the first time this century” that Jamaica had a debt to GDP ratio below 100 per cent, and 15 consecutive quarters of economic growth.
He noted the current growth rate of roughly two per cent was 10 times the 10-year average of 0.2 per cent, and compared favourably to the 20 year average of 0.5 per cent and even the 40-year average of 0.9 per cent.
He emphasised the importance of Government of Jamaica’s (GOJ) policy thrust of deepening financial markets to achieve development.
Stating that the social and physical infrastructural needs of Jamaica cannot all be financed from existing revenues, he argued the GOJ has a strong interest in the development of efficient capital markets.
“We intend to catalyse the development of deep financial markets — markets for corporate debt, public equities and foreign exchange — that are characterised by transparency, competition and liquidity,” he said.
Arguing particularly for the development of a deeper (more liquid), more transparent (where any market participant can have access to the bid offer of dealers at any time of day) and competitive foreign exchange market (explicitly asking the question as to whether financial institutions were okay with lower margins but higher volumes), the minister highlighted the challenge posed by the tendency of financial institutions to trade only with their clients and not with each other.
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