Kester Guy (left) of the Financial Services Commission in conversation with Lisa Wade of Eckler Ltd., yesterday at the Eckler Investment Conference, under the theme ‘Investment Policy Review for Pension Plans’ at the Lloyd Erskine Sandiford Centre.
As Barbados deals with the current financial climate, more attention must be placed on the development of pension funds.
This is according to Kester Guy of the Financial Services Commission (FSC), who delivered remarks yesterday at the Eckler Investment Conference, under the theme “Investment Policy Review for Pension Plans”, at the Lloyd Erskine Sandiford Centre (LESC).
“Concerns about financial vulnerabilities detection and mitigation have gained the regulators’ attention for many years. Some pension plans hold significant assets and might be linked to other aspects of the financial system. As we grapple with issues of financial stability, greater focus on consolidated supervision and tracing the linkages
of the pension sector are required,” he stated.
It was further pointed out that in order to effectively address this, certain areas must be addressed and we must ensure that the answers to all of these questions are provided in the development of the pension sector.
“Some of the questions that arise include: What are the sources of systematic risks and the potential impact of private pension funds on financial stability? What are possible supervisory challenges and potential sources of systematic risks in pension systems? What potential impact private pension funds may have on financial stability? Are pension funds distinct from insurance and banking institutions financial stability issues? What is the role of large pension funds? And should they be regulated differently to smaller ones?”
He stated that if these pension funds are well-managed, then it can result in economic sustainability and advancement.
“In some jurisdictions, pension funds have power to diminish financial volatiles by operating against the business cycle. Counter-cyclical behaviour can help to maximise profits for policy holders and aid financial stability. Well-managed pension funds can also help to reduce systematic risk and preserve financial stability and could therefore play a crucial role in supporting both financial stability and long-term economic growth.” (PJT)