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Tuesday, February 9, 2016
Central Bank’s clarification on EPF has unwittingly refuted Prime Minister and Minister of Finance?
Selective response by EPF to concerns raised
The Central Bank has issued a clarification, carried by Daily FT in its print edition of 1 February 2016, on the Monetary Board’s alleged failure to publish the annual reports of the EPF after 2012, a concern raised by this writer in a previous article in this series.
This alleged failure has been only one of the concerns raised in the article under reference among many failures of the Monetary Board in the recent past as the trustee of EPF (available at: http://www.ft.lk/article/520800/EPF-and-ETF--Should-or-shouldn-t-they-be-merged-into-a-separate-institution?). Thus, the bank has been very selective in making its clarification and defensive in its tone. Yet, it could be considered a good sign since it displays the bank’s willingness to engage itself in an exchange with the public concerning its role in EPF.
The Monetary Board as trustee of EPF is ultimately accountable
The Monetary Board is the trustee of EPF and in terms of the Monetary Law Act, or MLA, it is the Monetary Board which has been incorporated and not the Central Bank. Hence, the Monetary Board is responsible for both the good and the bad outcomes of the actions of the institution known as the Central Bank.
The Governor, who is the Chairman of the Monetary Board, functions as CEO of the Central Bank and performs his duties on a delegated authority basis. Hence, it is the Monetary Board which is the master and not the Governor or any other officer of the Central Bank. Ultimately, the Board has to be accountable for everything which the Central Bank or its officers do, requiring it to be extra vigilant and cautious.
Central Bank’s ‘fault-finding’ with others
In this context, it is not clear whether the clarification in question had received the Monetary Board’s sanction, though it had defended the board’s failure to publish EPF annual reports after 2012. The clarification, while indirectly admitting that the Monetary Board had not published annual reports of EPF after 2012, had made three points in defence of the board.
Selective response by EPF to concerns raisedThe Central Bank has issued a clarification, carried by Daily FT in its print edition of 1 February 2016, on the Monetary Board’s alleged failure to publish the annual reports of the EPF after 2012, a concern raised by this writer in a previous article in this series.
This alleged failure has been only one of the concerns raised in the article under reference among many failures of the Monetary Board in the recent past as the trustee of EPF (available at: http://www.ft.lk/article/520800/EPF-and-ETF--Should-or-shouldn-t-they-be-merged-into-a-separate-institution?). Thus, the bank has been very selective in making its clarification and defensive in its tone. Yet, it could be considered a good sign since it displays the bank’s willingness to engage itself in an exchange with the public concerning its role in EPF.
The Monetary Board as trustee of EPF is ultimately accountable
The Monetary Board is the trustee of EPF and in terms of the Monetary Law Act, or MLA, it is the Monetary Board which has been incorporated and not the Central Bank. Hence, the Monetary Board is responsible for both the good and the bad outcomes of the actions of the institution known as the Central Bank.
The Governor, who is the Chairman of the Monetary Board, functions as CEO of the Central Bank and performs his duties on a delegated authority basis. Hence, it is the Monetary Board which is the master and not the Governor or any other officer of the Central Bank. Ultimately, the Board has to be accountable for everything which the Central Bank or its officers do, requiring it to be extra vigilant and cautious.
Central Bank’s ‘fault-finding’ with others
In this context, it is not clear whether the clarification in question had received the Monetary Board’s sanction, though it had defended the board’s failure to publish EPF annual reports after 2012. The clarification, while indirectly admitting that the Monetary Board had not published annual reports of EPF after 2012, had made three points in defence of the board.
