Senator Keith Duncan, CEO of JMMB Group
Chief Executive Officer of JMMB Group, Senator Keith Duncan, says the proposed adjustments of the liquidity ratio for financial holding companies by the Bank of Jamaica to 120 per cent from the current 100 per cent will force some commercial banks, building societies and merchant banks to adjust their internal operations.
He also warned that this could result in lower profits for these institutions or higher fees to the public.
The liquidity coverage ratio is a measure of a bank's high liquidity assets such as cash and marketable securities and short-term government debt.
The BOJ says the value of these securities must amount to 120 per cent of the cash paid out minus the cash deposited into any one of these deposit-taking institutions during a 30-day period.
For instance, if the amount of cash paid out by any one of these institutions minus the amount deposited during a 30-day period is a billion dollars, the institution must have $1.2 billion in cash, marketable securities as well as treasury bills.
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