Two global experts give thumbs up for independent debt office

Monday, 5 September 2022 00:27 - - {{hitsCtrl.values.hits}}

Brian McEnery

Grant Spencer

Two internationally renowned experts; New Zealand former Acting Governor Reserve Bank Grant Spencer and BDO Ireland Head of Advisory, National Asset Management Agency (2009 – 2018) Member and ACCA Global President 2017 Brian McEnery on Saturday backed the setting up of an independent debt office in Sri Lanka.

They gave their thumbs for the move at the Daily FT-SLID and ICCSL high profile webinar titled ‘Challenges in the Banking Sector – way forward for Sri Lanka’ in response to a question whether Central Bank of Sri Lanka (CBSL) should focus only on single objective of price stability and there should be an independent debt office and a banking commission to ensure sustainability. The experts opined that it was the way forward for Sri Lanka.

“The Central Bank shouldn’t not be doing agency functions for the Treasury or the Government,” said Spencer. “The New Zealand Central Bank used to run the Government's debt management.

When we did the reforms the debt management was shifted back to the Treasury which set up a new Debt management office. That is a very sensible thing to do,” he added.

“I would absolutely agree,” added McEnery. “The Ireland did the same. We have the National Treasury Management Agency which is independent. It has the ability to recruit specialists at market rates . I agree the mandate of debt management should be separated from the Central Bank,” he added.

In Sri Lanka, the Government debt management related activities are carried out by the Central Bank of Sri Lanka, External Resources Department, National Budget Department and the Treasury Operations Department at present.

President Ranil Wickremesinghe in his interim Budget last week said “as it is important to pay special attention to the management of public debt, an independent National Debt Management Agency (NDMA) will be set up under the General Treasury in lieu of current arrangement in this respect”.

Experts at the webinar said effective debt management can help strike the balance between funding Sri Lanka’s needs with debt levels that are sustainable, meaning that debt can be serviced at a reasonable cost. It is evident that Sri Lanka needs the tools, institutions, legal frameworks, or know-how to actively manage the debt to win the confidence of the creditors.

The webinar panel included FJ&G de Saram Partner, Banking and Finance Tilani Ford, Ernst & Young Sri Lanka Managing Partner Manil Jayasinghe, Union Bank Chairman Atul Malik, Commercial Bank Deputy Chairman Sharhan Muhseen, and Sampath Bank Managing Director Nanda Fernando. BDO Sri Lanka and ACCA were partners for the event. The session was moderated by Daily FT Editor Nisthar Cassim and SLID Vice Chairman and ICCSL Past Chairman Dinesh Weerakkody.

The webinar can be watched on facebook.com/events/1446441462490871/.