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The Sacred Cow

Jul 22, 2012

This is a reply to Terrence Farrell's "No Sacred Cows'' column, which was published on
July 16 in the Express.

There are potent questions of whether the best process was followed in making the
critical appointment of the new Central Bank Governor and those have been raised by
several commentators, most notably in last week's BG View "Is Jwala's appointment good
or bad for T&T'' .

Those questions revolve around the scope of discretion which our governments are
allowed in these matters and the extent to which the public interest can be sacri ced in
favour of what can appear to be political favouritism. Matters like these are always open
to fair and robust scrutiny in the press.

My own view is that there is a related, larger series of Central Bank issues which are in
danger of being obscured by the line Farrell has taken in this debate

In writing on the CL Financial asco, I have adopted the phrase "Code of Silence'' to
describe the unspoken agreement that the entire mess is to be mentioned as little as
possible. That silence is especially pronounced amongst those best equipped to analyse
the issues, so the intention of the Code would appear to be to preserve the existing order
of things.

Silence is the enemy of progress, so that is an abysmal showing from our most educated
brethren, miserable really.
Take for example the January 30, 2009 Central Bank press release by then governor Ewart
US "Invisible" Jet Being Shot Down By Serbia Led To An Unex…
Williams. On the rst page we are told:
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"In our regular monitoring of CIB, and of Clico since 2004 (when insurance supervision
was transferred from the Ministry of Finance), the Central Bank has consistently focused
on these de ciencies but have been stymied by the inevitable challenge of change and by
inadequacies in the legislative framework which do not give the Bank the authority to
demand these changes."

Williams was saying that since 2004 serious problems were identi ed in the CL Financial
group, but that he did not have the proper tools to deal with these. Dr Farrell's opinion is
that the Governor must be "su ciently strong and respected to keep the nancial system
stable". Yet this is the same Governor who had two investments with that "de cient''
group, so how can one reconcile that What is more, within a week of that fateful bailout
date, our Parliament had debated the Central Bank (Amendment) Bill and the Insurance
(Amendment) Bill, both being immediately assented to.

The burning question is "Where were these draft bills when the CL Financial crisis was
gathering force since 2004''

But there is more. According to para 23 of the April 16, 2010 a davit by the Inspector of
Financial Institutions, Clico Investment Bank (CIB) did not le Corporation tax returns
for 2007, 2008 and 2009. I am reliably advised that means CIB did not pay corporation tax
for those years. Yet CIB was somehow able to retain its banking licence throughout that
period, and, upon collapsing, obtain an immediate bailout on most generous terms.

Dr Farrell also tells us that the Central Bank needs to be "a decisive actor when action is
required". Obviously, that standard did not obtain over the last decade.

The entire situation reeks of corruption in the highest o ces in the republic and on the
largest possible scale. We are witness to an epic swindle being carried out on our Treasury
and in broad daylight.

There is plenty more evidence to discuss on this issue, including the seminal July 15, 1996
Republic Bank letter to shareholders which warned of the perils of the then ongoing
aggressive takeover by CLICO.
At the critical turns in this crisis, we have been without Dr Farrell's views in terms of the
US "Invisible" Jet Being Shot Down By Serbia Led To An Unex…
rigorous scrutiny from which we Wanderoam
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have been bene tting.

Dr Farrell also adds, in relation to Williams' impact at the Central Bank, that it was
"repaired and strengthened by Ewart Williams over the last ten years". That seems to be a
straight case of "nearer to church, further from God''. Given Dr Farrell's reading of
events, it seems that Ewart Williams is being treated like a "sacred cow''.

I continue to be outraged that the outgoing governor appears to have retired with full
bene ts after having presided over a disaster on this scale.

The quest for better governance cannot only comprise criticising the administration and
its o cials, educated commentators also have a responsibility to uphold consistent
standards of rigour. Given his background, I consider Dr Farrell's contribution on this
asco to be lacking that standard.

For my own part, I will be looking to see how Jwala Rambarran performs on the burning
issue of properly applying the "Fit and Proper regulations'' to the nancial sector.

Afra Raymond is president of the Joint Consultative Council for the Construction Industry
(JCC) and

managing director of Raymond & Pierre Ltd