I have been reading the many articles about the whole FINSAC matter and its current investigation, and read in your editorial that you have called for it to be halted and redone with a better plan. I agree.

With this in mind, I would like to provide a brief timetable as to what occurred in our beautiful island's financial sector just prior to the creation of FINSAC.

1) The Government opened up the once-regulated import markets, creating a massive demand for foreign goods.

2) This resulted in a massive increase in the amount of hard currency needed to purchase these goods.

3) To solve this problem the currency markets were deregulated. This caused our exchange rate to spiral out of control.

4) An initiative was launched by a noted businessman to try to bring the exchange rate under control.

5) Shortly after this initiative, a controversy erupted at the central bank in 1993 with agents, sub-agents and many deputy governors of the central bank being relieved of their duties.

6) The central bank then pursued a high-interest-rate strategy so as to try to control the exchange rate using market forces.

7) This high-interest-rate strategy caused those people and companies that were carrying debt to be put into a position where they could not service this debt. This caused massive bank failure. Many people lost all; many companies were destroyed, and many banks had to be bailed out by FINSAC.

Choices

The truth of the matter is, our leaders at the time had two choices. The first choice was, they could have held the interest rate and allowed the exchange rate to slide. In this case, the people who had debt would have been easily able to repay their debts, however, the poor consumers of our island would have suffered a great deal as the price for essentials would have skyrocketed.

The second choice was that our leaders could have raised the interest rate so as to defend the exchange rate, and this is what they did. The result was that those who had borrowed got punished, the banks failed, but the consumer was given a reprieve.

In order to examine and judge the FINSAC matter properly, all seven of the above-mentioned points need to be investigated so as to see the true picture. Sure, our leaders went one way and a lot of people were hurt; but if our leaders had gone the other way, another group would have been hurt just as badly.

So, while I welcome the fact that we will soon see truth in this area, it is also my opinion that our nation suffered this calamity due to the fact that we did not have our priorities in the right order. As a nation, we were more concerned with consuming than we were with producing. In my view we must change this.

I am, etc.,

JOHN WILDISH

wildish@express.tc

Turks and Caicos