BOJ explains purchase of billion-dollar property in St Andrew

The Bank of Jamaica (BOJ) says its recent purchase of a billion-dollar property in St Andrew is to relocate some its operations as part of a strategy to boost the bank's ability to respond to potential disruptions.

The comment follows the Jamaica Observer's Wednesday report that the bank purchased a property on Hillcrest Avenue for US$7.965 million (J$1.25 billion) from Sygnus Real Estate Finance Limited in October. 

The BOJ's statement on Friday did not mention the cost and other associated details.

But it noted that the acquisition of the property is to protect critical central banking functions that underpin business and government operations in Jamaica, as well as to minimise the chances of a complete operational shutdown. 

"The location of the bank on the Kingston waterfront makes it particularly vulnerable to geological activities such as earthquakes and to the potential effects of sea level rise either by itself, or resulting from an earthquake or storm surges driven by tropical cyclones," said the BOJ Governor Richard Byles. 

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Byles said central banking functions "are critical to business activity and government operations for the entire country, and are required to facilitate business transactions between Jamaica and the rest of the world". 

The move also comes as the BOJ prepares to expand its oversight role within the financial sector, following the fallout from the Stocks and Securities Limited fraud scandal. 

"Building operational resilience and mitigating risks of various forms is especially critical as Bank of Jamaica prepares to assume wider prudential responsibilities for the regulation and supervision of the entire financial sector. With this in mind, planning for expansion at our current site while also ensuring adequate mitigation of risks to critical operational functions are not mutually exclusive," he said. 

The BOJ said the operations at the St Andrew location will not include services to the public. 

Under the law, the BOJ, which regulates deposit-taking institutions such as commercial banks, is tasked with maintaining price and financial system stability. With the soon-to-be new roles, the central bank will also supervise non-deposit-taking institutions such as securities dealers, insurance companies and pension funds. 

The central bank also formulates and implements monetary policy; manages Jamaica's external reserves; acts as banker to the Government deposit taking institutions, among other things.