Alleged fraud at Sri Lanka's central bank should be probed externally: Governor
Sep 29, 2016 08:54 AM GMT+0530 | 2 Comment(s)
ECONOMYNEXT - Sri Lanka's new Central Bank Governor Indrajit Coomaraswamy said he is putting in systems to boost transparency and focussing his energies on having independent monetary policy and effective regulation and any probes should be conducted externally.
"Let me look forward first, we are trying to put in place systems and processes which will (a) be more suitable for our system," Coomaraswamy told reporters Wednesday. "
"We are looking at international experience. We are trying to get as much experience and knowledge into the process as possible to come up with what we think is the best for this country.
"Not only our best people - and we have very experienced and very good people looking at it - we are also consulting the IMF (International Monetary Fund), the World Bank.
"Second this we are doing is we are trying to put in place systems that will make things very transparent."
Electronic trading will make it easier to see whether insider information is leaking from the central bank and will be deterrent.
"Looking back, the position I have taken is…If we stand looking back at everything that has gone on over the years, the central bank staff will spend all their time looking into inquiries.
He said the central bank had an important role in ensuring price and economic stability and he is trying to build an independent monetary authority.
"These are very bid things we are trying to do. If the COPE (parliament's committee on public enterprises) report there should be an inquiry. But in my view it should be an external inquiry. If the central bank has done something wrong it should not be the central bank that looks at that.
"But for that there has to be evidence."
The COPE is expected to release a report on a series of so-called 'bondscams' involving alleged rigging of bond auctions leading and trading in insider information and dumping bonds at inflated prices on the Employees Provident Fund in 2015 and 2016.
However the central bank has come under fire for buying stock at inflated into the EPF especially during and shortly after a stock market bubble that collapsed in 2011.
In addition the central bank had also come under fire for mis-managing international reserves by buying Greek junk bonds, spending hundreds of millions of dollars on Western lobbying firms, as well as questions over regulating firms controlled by politically connected persons. (Colombo/Sept29/2016)