Review redirects focus to financial sector

THE financial sector which covers banks, finance companies, superannuation funds, insurance companies and money lenders will be the focus of phase two of review of BPNG Central Banking Act 2000.
The Government through the Minister for Treasury appointed and commissioned the Independent Advisory Group (IAG) last April to carry out this review.
The group comprised Sir Wilson Kamit, former Governor of the Bank of PNG; Stephen Howes, professor of Economics and director of Development Policy Centre at Crawford School, Australian National University; and Robert Igara, Chancellor of the University of Papua New Guinea and former chief secretary to Government.
The second phase of the review will include financial sector regulatory and supervisory arrangements to increase competition and improve accessibility for the people and businesses, especially small-to-medium enterprises (SMEs), and development of the Government’s bond markets to reduce borrowing costs.
“We need to encourage competition, investment, accessibility, and growth in our financial sector, and use modern technology to increase productivity and efficiency, look at our laws governing our banks and institutions as well as the insurance and superannuation industries, and ask whether they are robust enough to support these reforms,” chairman Robert Igara said.
“We need to revisit our Anti-Money Laundering and Counter Terrorism Act 2014 and whether it poses a threat to the accessibility of our banking system to farmers and small businesses.
“We need to re-look at whether our central bank has the appropriate legislation to fulfil its functions in light of changing technologies and global banking dynamics.”
The IAG completed phase one of its review last November and provided report on its findings which addressed terms of reference issued by Treasurer Ian Ling-Stuckey on May 13, 2021.
Phase one covered governance, accountability and transparency; government; financing; crisis management; the bank’s objectives; and issues for consideration in phase two of the review.
The report included 31 recommendations which were brought to the attention of the National Executive Council (NEC). NEC and parliamentary deliberations resulted in the unanimous passage of the Central Banking (Amendment) Act 2021.