State to participate in IMF/World Bank assessment programme
Jun 1, 2005, 12:10

Fiji has agreed to participate in a joint International Monetary Fund and World Bank Financial Sector Assessment Programme, said the Prime Minister Laisenia Qarase.

He made the comment while officially opening the 40th Conference of the South East Asian Central Bank of Governors conference held at the Sheraton Resort in Nadi yesterday afternoon.

This, the Prime Minister said will provide a very comprehensive evaluation of Fiji’s financial system, with emphasis on its ability to absorb the shock of the unexpected.

“The recommendations that come from this assessment are likely to be central to the framework for its future development,” he said.

Mr Qarase revealed that the Reserve Bank is also planning to introduce a Real Time Gross Settlement System this year.

“The Reserve Bank of Fiji is presently modernising the country’s financial system.

“International analysts have described it as being relatively advanced with almost all facilities normally available elsewhere. It provides a sound underpinning for the economy and in comparison to our neighbours, is relatively diverse and competitive.”

The Prime Minister said there is a clear and present threat from money laundering and its associated activities.

“After we considered several international assessments of our ability to deal with this, the Government introduced an Act last year for the reporting of suspicious transactions.

“It compliments several other pieces of legislation. A Financial Intelligence Unit is now established at the Reserve Bank,” Mr Qarase said.

The Prime Minister told participants that we all look to our Central Banks to keep a steady hand on our financial systems to ensure they are sound and strong.

This supervisory aspect he said, is critical for maintaining the public confidence upon which any banking and finance system is built.

“It has been under scrutiny for some time, leading to the establishment of universal guidelines.”

Mr Qarase said the last decade saw a number of financial crises, including one in the Asian region.

“This of course, created a lot of pain and suffering. Some nations were able to cope better than others, because their economies were more resilient.”

The major lesson that can be learnt from here, Mr Qarase said is that protection is always better than cure.

Economic stability, he said must be safeguarded always.

“Early warning signals are needed. Vigilant Central Banks with adequate resources and skills must effectively monitor and read these signals, and be proactive about solutions,” Mr Qarase added.

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