An­tho­ny Wil­son

At its week­ly meet­ing on Wednes­day, Cab­i­net took a de­ci­sion to re­quest the Pres­i­dent to ter­mi­nate the ap­point­ment of for­mer Cen­tral Bank Gov­er­nor, Jwala Ram­bar­ran, in ac­cor­dance with sec­tions 12(e) and 12(g) of the Cen­tral Bank Act, Fi­nance Min­is­ter Colm Im­bert said in a state­ment on Thurs­day.

That de­ci­sion is un­prece­dent­ed in lo­cal his­to­ry, but is pre­ced­ed in the Com­mon­wealth, by the Ja­maican gov­ern­ment's dis­missal of Gov­er­nor De­r­ick Lat­i­beaudiere in No­vem­ber 2009 (over com­pen­sa­tion is­sues) and the Feb­ru­ary 2014 dis­missal of Niger­ian gov­er­nor Lami­do Sanusi (for al­leg­ing cor­rup­tion in oil rev­enues). Cyprus gov­er­nor Pan­i­cos Deme­tri­ades re­signed in March 2014 af­ter be­ing pres­sured by the gov­ern­ment there.

The sec­tions of the Cen­tral Bank Act cit­ed by the min­is­ter al­low the Pres­i­dent to ter­mi­nate the ap­point­ment of a gov­er­nor if he "is guilty of mis­con­duct in re­la­tion to his du­ties" and "fails to car­ry out any of the du­ties or func­tions con­ferred or im­posed up­on him un­der this Act."

It seems ev­i­dent that the Cab­i­net formed the opin­ion–based pri­mar­i­ly on le­gal ad­vice from both in­ter­nal and ex­ter­nal coun­sel, in­clud­ing se­nior coun­sel, ac­cord­ing to the min­is­ter–"that the dis­clo­sure by the for­mer Gov­er­nor of the names of the largest users of for­eign ex­change in T&T and the amounts of for­eign ex­change that they used was a breach of sec­tion 56 of the Cen­tral Bank Act and sec­tion 8 of the Fi­nan­cial In­sti­tu­tions Act."

Those laws im­pose a du­ty of con­fi­den­tial­i­ty on all of­fi­cers of the Cen­tral Bank, which is re­quired to main­tain the se­cre­cy of in­for­ma­tion passed to it by T&T's com­mer­cial banks as the Cen­tral Bank serves as banker to the coun­try's fi­nan­cial in­sti­tu­tions and al­so as reg­u­la­tor and su­per­vi­sor of the coun­try's com­mer­cial banks.

In oth­er words, in the same way that a bank has an oblig­a­tion to main­tain the con­fi­den­tial­i­ty of a cus­tomer's ac­counts, the Cen­tral Bank must main­tain the con­fi­den­tial­i­ty of the in­for­ma­tion passed to it by com­mer­cial banks.

The Fi­nan­cial In­sti­tu­tions Act (FIA), at sec­tion 8(1) un­der the rubric of con­fi­den­tial­i­ty, states: "No di­rec­tor, of­fi­cer or em­ploy­ee of the Cen­tral Bank or per­son act­ing un­der the di­rec­tion of the Cen­tral Bank shall dis­close any in­for­ma­tion re­gard­ing the busi­ness or af­fairs of a li­censee or any of its af­fil­i­ates or in­for­ma­tion re­gard­ing a de­pos­i­tor, cus­tomer or oth­er per­son deal­ing with a li­censee, that is ob­tained in the course of of­fi­cial du­ties."

That sec­tion makes it clear that Cen­tral Bank gov­er­nors have a du­ty of con­fi­den­tial­i­ty not to dis­close any in­for­ma­tion ob­tained in the course of of­fi­cial du­ties.

On that ba­sis alone, the Pres­i­dent could have sum­mar­i­ly ter­mi­nat­ed the ap­point­ment of for­mer gov­er­nor Jwala Ram­bar­ran.

In seek­ing to de­fend the de­ci­sion by the for­mer gov­er­nor to dis­close the names of some of the coun­try's main for­eign ex­change users, the Cen­tral Bank pub­lished a state­ment on its Web site and pub­licly on De­cem­ber 8.

That state­ment, which negates the per­cep­tion that the Gov­ern­ment did not al­low Ram­bar­ran the right to be heard, quot­ed sec­tion 8(6) of the FIA.

That sec­tion al­lows dis­clo­sure of in­for­ma­tion that would be in the best in­ter­ests of the fi­nan­cial sys­tem of T&T or in the best in­ter­ests of de­pos­i­tors, oth­er cus­tomers, cred­i­tors or share­hold­ers of such a li­censee.

The Cen­tral Bank state­ment, which was draft­ed no doubt by the for­mer gov­er­nor, does NOT out­line how the breach of con­fi­den­tial­i­ty would be in the best in­ter­ests of the fi­nan­cial sys­tem of T&T or of de­pos­i­tors, cus­tomers, cred­i­tors or share­hold­ers of those li­censees.

In­stead, the state­ment said the use of T&T's pre­cious for­eign ex­change re­serves "is an is­sue of pub­lic con­cern and jus­ti­fies the dis­sem­i­na­tion of the iden­ti­ty of the main re­cip­i­ents to whom such re­serves are dis­trib­uted."

The Cen­tral Bank Act, it must be not­ed, al­lows dis­clo­sure of in­for­ma­tion that is in the best in­ter­ests of T&T's fi­nan­cial sys­tem or in the "best in­ter­ests" of li­censees. It does not al­low dis­clo­sure of is­sues of "pub­lic con­cern" be­cause if it did then the Cen­tral Bank would have been oblig­ed to make pub­lic the names of those Cli­co di­rec­tors who re­ceived monies un­der the first dis­tri­b­u­tion to non-as­sent­ing pol­i­cy­hold­ers.

In ad­di­tion, the for­mer gov­er­nor's state­ment con­ve­nient­ly ig­nores sec­tion 8(7) of the FIA, which states: "Noth­ing in this sec­tion au­tho­ris­es the Cen­tral Bank or any per­son act­ing un­der the di­rec­tion of the Cen­tral Bank to dis­close in­for­ma­tion about a par­tic­u­lar de­pos­i­tor or cred­i­tor of a li­censee, ex­cept where such dis­clo­sure is re­quired by any writ­ten law or or­dered by the Court."

It should be not­ed that con­tra­ven­tion of sec­tion 8 of the FIA is an of­fence for which the of­fend­er "is li­able on sum­ma­ry con­vic­tion to a fine of $600,000 and to im­pris­on­ment for two years."

The Cen­tral Bank state­ment of De­cem­ber 8 al­so seeks to de­fend the for­mer gov­er­nor by quot­ing the Cen­tral Bank Act at sec­tion 56 (1), which states: "Ex­cept in so far as may be nec­es­sary for the due per­for­mance of its ob­jects, and sub­ject to sec­tion 8 of the FIA, every di­rec­tor, of­fi­cer and em­ploy­ee of the Bank shall pre­serve and aid in pre­serv­ing se­cre­cy with re­gard to all mat­ters re­lat­ing to the af­fairs of the Bank, any fi­nan­cial in­sti­tu­tion...or of any cus­tomers there­of that may come to his knowl­edge in the course of his du­ties."

The Ram­bar­ran state­ment un­der­lines and em­bold­ens the first clause of the quote. But the state­ment fails to en­light­en the pub­lic on how the breach of the ex­pect­ed con­fi­den­tial­i­ty is nec­es­sary for the "due per­for­mance of the Cen­tral Bank's ob­jects" or what are the ob­jects of the Cen­tral Bank.

If one takes the Ox­ford dic­tio­nary de­f­i­n­i­tion of ob­jects as be­ing a goal or pur­pose, the ques­tion then be­comes how is the dis­clo­sure of some of T&T's largest users of for­eign ex­change nec­es­sary for the due per­for­mance of the Cen­tral Bank's goals or pur­pos­es.

The Cen­tral Bank's "ob­jects," or its goal and pur­pose," is en­cap­su­lat­ed in its mis­sion state­ment, which reads: "The Bank shall have as its pur­pose the pro­mo­tion of such mon­e­tary, cred­it and ex­change poli­cies as would fos­ter mon­e­tary and fi­nan­cial sta­bil­i­ty and pub­lic con­fi­dence and be favourable to the econ­o­my of Trinidad and To­ba­go."

In short, the goal and pur­pose of the Cen­tral Bank (its ob­jects) is to pro­mote mon­e­tary and fi­nan­cial sta­bil­i­ty, pub­lic con­fi­dence and a favourable econ­o­my for T&T.

The ques­tion is this: How does the nam­ing of some of the largest users of for­eign ex­change pro­mote the coun­try's fi­nan­cial sta­bil­i­ty, pub­lic con­fi­dence and a favourable out­come for T&T?

The De­cem­ber 8 state­ment by the Cen­tral Bank al­so ig­nores the Ex­change Con­trol Act, which is strange con­sid­er­ing the fact that the dis­clo­sure in­volved the use of for­eign ex­change.

Sec­tion 44 of the Ex­change Con­trol Act states: "No per­son who ob­tains in­for­ma­tion by virtue of this Act shall dis­close that in­for­ma­tion oth­er­wise than in the dis­charge of his func­tions un­der this Act or for the pur­pose of any crim­i­nal pro­ceed­ings; but noth­ing in this sub­sec­tion shall ap­ply to in­for­ma­tion law­ful­ly re­ceived by a mem­ber of the pub­lic in the course of an or­di­nary trans­ac­tion be­tween such per­son and the Bank."