Published: Tuesday November 11, 2008
Inspector of Financial Institutions at the Central Bank, Carl Hiralal, yesterday said T&T has much work to do to build a culture of compliance in local financial institutions.
Hiralal made the comment at the opening of a two day conference hosted by the Caribbean Regional Compliance Association (CRCA) at the Hyatt Regency Trinidad hotel, 1 Dock Road, Port-of-Spain.
“In T&T it is clear that we still have a way to go before we make a culture of compliance within our institutions, although we have come a long way from where we were. We recognise that compliance is an important function for all corporations,” he said.
Hiralal said the current global financial crisis had shown that there is a need for good governance and risk management capability.
“In recent times the financial services industry has experienced numerous challenges that has tested compliance and risk management capabilities. There are a number of well known examples of breakdown of compliance culture in financial institutions.
“The current financial crisis which Alan Greenspan referred to as a ‘financial tsunami’ has underscored the need for good governance,” he said.
He said compliance risk management systems are important safeguards against financial losses.
“Compliance is a critical factor for any country. In the financial services industry you need more effective compliance systems given that public confidence is a critical factor. Therefore, it is evident that robust and comprehensive and compliance risk management systems are a critical defence system against significant losses,” he said.
He said financial institutions now operate in a complex world.
“Increasingly globalisation, trade, interests with corporate governance and complex institutions, changing laws and regulations, the understanding of what constitute sound risk management creates a complex situation for financial institutions particularly those that operate on a cross border basis,” he said.
Hiralal said that the cost of non-compliance could be costly.
Source: Trinidad Guardian Newspapers