Gary Spaulding, Senior Gleaner Writer

The resignation of Derick Latibeaudiere as head of the Bank of Jamaica has done little to slow predictions that the challenges to the sector were set to mount.

In an immediate response, former Finance Minister Dr Omar Davies characterised the latest development as unsettling.

"The sudden demitting of the office by the governor of the central bank is unsettling in the best of times. It's most unsettling in difficult times," Dr Davies told The Gleaner late last evening.

Latibeaudiere's replacement by Brian Wynter has also brought questions.

Financial analyst Ann Shirley believes that Wynter is the compromise to satisfy the International Monetary Fund (IMF) and Government in the delicately poised negotiations.

However, Shirley warned that despite Wynter's experience, the learning curve as the new central bank governor would be challenging at this critical juncture.

Scoffing at explanation

With tensions reportedly mounting between Latibeaudiere and the Bruce Golding administration, over a protracted period, financial analysts and players in the sector are scoffing at the explanation proffered by the finance ministry late yesterday.

For many, the latest development has not come as a surprise, following the months of apparent tension between Latibeaudiere and the political directorate.

Financial observers say the tensions increased in intensity when the Government found it hard going fleshing out a suitable arrangement to take to the negotiations with the IMF.

Financial analyst Ralston Hyman suggested that the latest round in the ongoing dispute between Latibeaudiere and the finance ministry was precipitated by the inability of the Government to present a credible set of fiscal targets to the IMF team, currently in the island and expected to leave on November 6.

"The villain is not the central bank but the Ministry of Finance, as they have not presented those targets," Hyman declared.

For Shirley, it was a matter of time before the tensions would have culminated in a parting of ways.

"He is a person who likes to go by the rules ... A good example is the bringing down of interest rates according to market and other conditions ... . This has created tension as the Government thinks that he is not as flexible as they would like him to be ... tension over the past two years, and it has been building."

No deterioration

But for the past two years, the Government adamantly denied that the relationship between Latibeaudiere and the finance minister had been deteriorating, even when four other deputy financial secretaries were displaced.

When the news surfaced yesterday that the central bank governor had finally decided to call it quits, Davies, with whom Latibeaudiere worked for years, was the first to pay tribute to the outgoing governor. However, Dr Davies declined to comment on whether he had anticipated Latibeaudiere's departure.

"I wish to express gratitude to him for his over three decades of service to the central bank and for his extended period as governor. I wish him all the best in his endeavours, come whatever they may be," Davies said.

Opposition support

He added: "I welcome Mr Brian Wynter to the position and pledge the Opposition's support and cooperation,"

But Hyman was more forthright in his pronouncement.

"The bottom line is that it (Latibeaudiere's resignation) is going to lead to a huge loss of confidence and possibly a run on the dollar," he warned.

Hyman said Latibeaudiere was the most experienced technocrat in Jamaica in relation to the IMF and the multilateral agencies.

Hyman accused the Government of playing politics with the issue.

"They fired Colin Bullock (former financial secretary) and they have been itching to fire Latibeaudiere for a long time," he declared.

Efforts to contact Finance Minister Audley Shaw up to late last night proved futile.

gary.spaulding@gleanerjm.com