CB says financial sector regulators warming up for close cooperation

The financial sector regulatory bodies have started closer cooperation among themselves in recent months by establishing two regulatory processes to reduce the gaps in regulatory oversight, the Central Bank said recently.

“I think we are now talking to each other more. We are trying to talk to each other more,” Central Bank Governor Dr. Indrajit Coomaraswamy said in response to a query Mirror Business raised. The International Organisation of Securities Commission (IOSCO) in its country report for Sri Lanka this year criticized the financial sector regulators and facilitators for not having formal engagement.

The Central Bank, Registrar of Companies, Attorney General’s Department, Colombo Stock Exchange (CSE) and Institute of Chartered Accountants were criticized for not having formal engagement with the Securities and Exchange Commission (SEC).

The IOSCO had found the investment banks, financial planners and advisors and the activities of the employees of market intermediaries to be largely unregulated as well.

Dr. Coomaraswamy said that one of the steps taken was to set up a forum for the SEC, Insurance Board of Sri Lanka and Central Bank to meet every quarter.

“I know we’ve had two meetings in the last six to seven months, so we have created that forum, whereby we meet reasonably regularly so that we can exchange our views and iron out any irregularities,” he said.

The Central Bank governor further added that a Financial System Stability Consultative Committee was also set up, with Rajan Asirwatham as its Chairman.

“We’ve got about 15 members and we have representation from the SEC, Stock Exchange and Insurance Board, as well as several private sector representatives representing different parts of the financial system on this committee and we’re meeting very regularly,” Dr. Coomaraswamy said.

He said that this committee had its first meeting last month.

“I think the coordination issue hopefully will get addressed through these mechanisms,” Dr. Coomaraswamy said.

(CW)