Remember that Fund By The BOJ To Protect The Financial Sector During the JDX? Well, It’s Back!

In 2010 Jamaica embarked on the Jamaica Debt Exchange, aimed at restructuring J$702 billion of domestic debt and reducing the government’s interest expenses, while lengthening the maturities of the debt. At that time US$950 million was earmarked to protect any institution that would buckle under the pressure.

However, no one used it.

Fast-forward to 2013; and the Jamaican government again is embarking on a second debt exchange.

BOJ Governor Brian Wynter said on Tuesday that Central bank support will be repo-based.

“Our technical team has reviewed the debt exchange offer in detail and has run various stress tests that assure us that the temporary impact on financial institutions’ profitability and capital adequacy will be manageable,” said Wynter.”Nonetheless, in order to ensure financial stability, the Government has revived the Financial System Support Fund (FSSF), which will be administered by the Financial Regulatory Council on behalf of the minister of finance,” he said.