March 24, 2010

Central Bank to Grant Loans to Businesses Affected by Cyclone Tomas

Our knowledge of the intracacies associated with financial systems may be a tad limited but when we saw the news that our central bank had taken it upon itself to grant loans AGAIN to businesses affected by the recent cyclone, it raised a few questions in our minds.

First and foremost is how these loan intiatives are supposed to be aligned to the central bank's legal mandate.

Second of all, in this day and age it should be almost automatic that the private sector has ample insurance cover as well as ample reserves to tide them over during times of sudden disaster.

If there is one thing we can learn from the USA, it is that it is NEVER a good idea to let the central bank run amuck and bail out or subsidise entities that are well placed to look after themselves, compared to the everyday citizens who face the brunt of the natural disasters head on.

1 comment:

Anonymous said...

Anything is possible in Fiji its a Banana Republic