1. Financial Liberalization and its Impact on Financial Stability in Guyanaby
Debra Roberts

2. Outline of Presentation
Introduction.
Pre- ERP Conditions.
Post- ERP Conditions .
Evaluation of the current regulatory framework.
Conclusion and Recommendations.

3. Introduction
Financial Repression and Financial Liberalization Repression
Expansion of financial markets
Washington Consensus policies promoted by the International Financial Institutions
A condition to access technical and financial assistance from the IMF

4. Pre- ERP Conditions
Government controlled approximately 80 percent of the banking system’s capital.
Inadequate supervision
Poor management of financial institutions
Poor asset quality

5. Post – ERP Conditions Restrictions were eliminated
No state-owned banks
Financial Institutions Act 1995 – empowered BOG to regulate and supervise financial institutions
BOG Act 1998
The presence of foreign banks

6. Current Regulatory framework
Prudential Component –embraces the CAMELS approach / in line with BASLE recommendations.
Regulatory Structure – organized along institutional lines
Other Features – risk- based supervision, little macro- prudential analysis

7. Weaknesses Insufficient macro- prudential analysis
Inter- agency coordination is absent
Regulatory arbitrage
Depositors are not protected.
Globe Trust – deposit taking institutions
CLICO - liquidated

8. Conclusions
Financial Liberalization has strengthened financial stability
The financial crisis highlighted new challenges.
Need for additional reform to strengthen supervision

9. Recommendations
Expand the coverage of regulated financial institutions.
Foreign exchange exposures should be monitored
Need for more macro- prudential analysis
An integrated regulatory structure should be adopted
Deposit Insurance / Consumer protection

10. THANK YOU