Lavern Clarke, Business Editor

Brian Wynter has found himself in the role of student, spending last week reacquainting himself with an institution where he worked in the past decade, but now returns to head in a period of turbulence and a great deal of controversy.

The new Bank of Jamaica governor, who was called early to Nethersole Place, is on a very short learning curve, however, telling Sunday Business on Thursday that he would not be leaving the critical International Monetary Fund (IMF) negotiations to other officers at the central bank but would be getting personally involved, though he is taking over at what the markets hope is the tail end of the talks.

"I don't have the luxury of standing by," said Wynter. "This is obviously very significant."

Dismissed BOJ governor Derick Latibeaudiere was leading the talks for Jamaica up to his departure in October.

Not the same supreme role

But while deputy governors Audrey Anderson and Myrtle Halsall were heavily involved in the negotiations, Wynter says he has been briefed and would step in as the BOJ's chief representative, but he would not have the same supreme role. Financial Secretary Dr Wesley Hughes now heads the negotiating team.

Wynter took up his posting 10 days ahead of schedule, a circumstance dictated, he said, by the fact that "there is a lot of work to be done".

The new governor has been away from Jamaica for two years, but is likely to need little reschooling, coming to the job with deep knowledge of the financial system as a former deputy governor up to 2000, and later as executive director of the Financial Services Commission for more than six years to the close of 2007.

Jamaica is attempting to strike a US$1.2 billion deal with the IMF for balance-of-payment support, which in turn should loosen the purse strings of other multilateral lenders from whom Jamaica is seeking budgetary support and cheap funds to replace expensive and burdensome debt.

Outside of its own budgetary load, three watchdogs for investors - the ratings agencies - have been pummelling Jamaica with downgrades of its sovereign credit, negative-watch labels, and not-so-subtle psychological pressure from warnings that any 'debt restructuring' would for them be a default - even though that is the outcome no one wants.

Wynter on Thursday was clear that he would not at this stage be going into policy issues, nor negotiating positions, and he flatly declined to speak on a potential wind-up date for the IMF talks, the issue that is making Jamaican markets - and the ratings agencies - the most nervous.

A deal was first expected at the end of September, then October, then November. No other timetable has been advanced since sister publication Wednesday Business reported that the last date would be missed and that the talks would extend into December. There are now reports that the Government and big financial institutions are close to finalising a new liquidity-management programme, being crafted to avoid the technical default that the rating agencies have threatened.

Latibeaudiere's philosophy in 13 years as governor was clear: keep inflation tamed through aggressive use of interest rates to curb money supply and keep the dollar stable. His most infamous move was the 20-point hike in rates in two adjustments done in one week that placed benchmark six-month rates at 33.15 per cent and the one-year at 35.95 per cent back in March 2003.

Creating headaches for corporates

That aggressive monetary position has fostered a landscape of high interest rates for Jamaica, creating headaches for the corporates on two fronts: having to compete with a debt-addicted government for capital; and declining competitiveness against regional and global trading partners who have access to cheaper cash to finance their businesses.

The big commercial banks have got uber rich in the process, with the largest two reporting a combined $21.8 billion of net profit in the past few weeks.

Latibeaudiere was said to have been dismissed because his potential $38 million salary package was too attractive for a capitalist but near-bankrupt society like Jamaica to stomach.

At that pay scale, his salary would have been comparable to the big bankers whom he kept in line.

But before the issue of pay was ever raised, Latibeaudiere for two years, as the Financial Gleaner reported twice, found himself in the position of denying that he was on his way out because of tensions between him and the Bruce Golding administration.

He was a man who thought interest rates were to be used as he saw fit, while others were saying bring them way down.

Rates are still hovering at around 17 per cent.

The November auction on Wednesday signalled that the market was willing to continue lowering the floor on rates.

The yield on the six-month benchmark treasury fell about 10 basis points to 16.936 per cent, from October's 17.04 per cent. The three-month bill yielded 15.992 per cent.

With Latibeaudiere's departure, the pundits, former government officials, and even the premier trade lobby, Private Sector Organisation of Jamaica (PSOJ), have called for the central bank to be restructured.

Wynter said while he has not studied the various positions, the reconfiguration of the central bank is not something to be rushed, but he was not willing to signal his thinking on the issue, nor even to say if it had come up in conversations with Finance Minister Audley Shaw or Prime Minister Bruce Golding.

Don Wehby has suggested that the governorship be separated from the chairmanship of the BOJ board, and that a nine-member monetary policy committee, including central bank senior staff, government representatives, and independent members, be created to set interest rate policy, a function now strictly guided by the governor.

Amending the law

The PSOJ agrees with the committee's creation, insists it can be done quickly by ministerial order, but says the composition should be seven members - four from the BOJ and three independents - eschewing the need for finance ministry representation as Wehby had proposed.

Governor Wynter said Thursday he would have to study the proposals more carefully before coming to a position, but said, in contrast to the PSOJ position, that such fundamental changes could not be rushed and was not now the most urgent issue.

"It may require amending the law," he said, "and you don't do that rapidly."

But governor and board chairman Wynter seems to think the central bank is doing fine as it is currently configured, and was complimentary of the team he has found in place.

"This is a fine institution with first-class staff," he said.

lavern.clarke@gleanerjm.com.