From left, Shaw, Roper and Latibeaudiere.

R Anne Shirley, Business Writer

Seven years ago, the world was riveted by unfolding events on the morning of September 11 and the subsequent responses and ripple effects throughout the United States and the rest of the global community.

Those events have had a profound effect on communications, travel, cross-border business transactions and other aspects of our daily lives.

Seven years later, we are now facing another cataclysmic event in the US. This time, there are no terrorists in planes. Instead, we are facing the possibility of a global recession led by the current economic turmoil.

The cause and effect of the sub-prime mortgage crisis has no relation to the terror attacks of 9/11, but there is an eerie sense of déjà vu - a sense of helplessness, anger, frustration and absolute fascination as the daily events unfold.

Situation seems manageable

In terms of the potential impact of the US turmoil on the Jamaican economy, Audley Shaw, minister of finance and the public service, and members of the Jamaican financial sector, have sought to downplay any potential repercussions.

We are being told that most of our commercial banks have a very limited exposure to holdings in foreign financial institutions, their delinquent loan portfolios are within manageable limits and further, that the assets in the NIR are 'safe'.

The head of the Financial Services Commission, George Roper, has also publicly stated that all of the licensed securities institutions are properly capitalised and although there is some exposure, he contends that the situation seems manageable - although he declines to provide specifics.

However, these statements are not enough to alleviate the skittishness amongst the Jamaican investing public.

The situation calls for strong and decisive leadership. There are a number of undercurrents in the Jamaican financial markets that need to be handled quickly and delicately.

Rumour mills

This is not a time for high-profile, highly paid top executives in the financial houses and their board members to go into hiding. The rumour mills are working overtime, and we are now in the era of bloggers. It is interesting to note ebb and flow in the verandah chat and the chat rooms. It is possible that a number of seemingly unrelated events could coalesce in people's minds, with possible negative effects down the road.

The audit queries at the Bank of Jamaica need to be dealt with as a matter of urgency. The Gleaner lead story of Tuesday, September 30, has stirred up a media investigative frenzy that will be hard to contain.

"The Bank of Jamaica and the Ministry of Finance officials need to stay on top of liquidity in the local financial markets. Care needs to be taken with the signals that are being sent to the market. Most of the major players do not want liquidity to be taken out of the system at this time and they are not enthusiastic about the proposed roll-over this week of US$ denominated bonds for 24 months.

"Local financial institutions would be well advised to hire crisis-communication consultants to assist their management teams in handling their dealings with their customer base and the media."

A word to the wise should be sufficient.

rashir0@hotmail.com