I am under tremendous pressure- CB Guv.
By Ishara Gamage
Ceylon Finance Today: Sri Lanka's Central Bank Governor Dr. Indrajit Coomaraswamy (66) is under tremendous pressure in his bank confidence-building process, however, he said he is ready to accept those challenges and committed to introduce a more transparent and efficient Central Bank system very soon.
"Yes, I'm now under more pressure than three months ago when I was appointed as the Governor of the Central Bank", he told Ceylon FT at the sidelines of the November post Monetary Policy media conference on Tuesday evening.
He said there were some irregularities exposed in the onsite examination report which was compiled and submitted to the Monetary Board by the Central Bank Non-bank Supervision Department with regard to the controversial primary dealer Perpetual Treasuries, however he said they were taking further legal advice before coming to a conclusion.
"We need to see what the situation is. What do we have the power to do? What can we do?" the Governor said.
He also said that even though there were allegations against Central Bank...
...officers (as the latest COPE report indicated), he cannot take any action without finding proper evidence.
The Monetary Board will meet for the second time this week on Friday for a special session to consider the three reports released on the bond fiasco including the onsite examination report, COPE report and the document compiled by the special committee appointed by Prime Minister Ranil Wickremesinghe last year.
"What I can assure you is that the Monetary Board would pay special attention to the recommendations in those reports, when they meet next Friday," he said.
He also said that the bank has been considering all options to enhance the countries' public debt management process.
"We have already stopped the Employees Provident Fund (EPF) trading in the secondary market, and also established the Bloomberg system that tracks transactions in real time, and also started a pre-bid brief to primary dealers and established an auction calendar," he said.
Responding to Ceylon FT queries he said that the Central Bank has already build natural firewalls to enhance the transparency of the bond transactions.
"Now all bond auction procedures must go through three different independent committees such as the tender board, technical committee and domestic debt management committee," he said.
The bank has also sought feedback from the International Monetary Fund (IMF) and World Bank (WB) on a proposed new auction system which will be hard to manipulate.
"No system is perfect, but we want to improve it, so current auction-only system of the bond market could change depending on IMF and WB recommendations," he said.
The bank is also considering strengthening its Finance Investigation Unit to stop the ponzi schemes and other illegal financial dealings.
Failed finance companies
The governor also told Ceylon FT that the bank is now studying a perfect legitimate model to restructure the failed finance companies.
"We will soon announce our deposit repayment procedure for three failed finance companies which we named last month," he said.
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