8 months ago
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The Bank of Jamaica will be adding a second tower to its Nethersole Place headquarters, an investment necessitated by its expanding regulatory portfolio.
The BOJ building, which sits on the Kingston waterfront, is currently said to be fully utilised. But under the twin-peaks model, which will see it taking on the responsibility of regulating insurance companies, investment firms, and pension funds, the central bank will need more space to accommodate the staff and operations that it will absorb from the Financial Services Commission.
Progress on legislation towards the new model is expected by 2025. But it is going take longer than that for the BOJ to develop the tower.
“The project is contemplated for execution over the next five years,” the BOJ said. “The current planning contemplates the construction of a new tower on land owned by the bank.”
The costing of the project will be determined by the final design and various other inputs that have not yet been decided on, the BOJ said.
“As such, it would be premature to provide any estimate at this point,” it added.
Earlier this month, the BOJ issued a tender for architectural, civil, structural, mechanical, and electrical quantity surveying services for the construction of a “10-storey office building and parking facility” at Nethersole Place. The bids are due by May 3.
The current tower spans 14 storeys and was opened in 1976. The BOJ started operating in 1961 in a smaller building.
The BOJ explained that for several years, it has been “grappling” with the need for space to accommodate the expansion of its staff corps, which, according to its latest annual report, numbered 690 persons up to last December.
The expansion of its mandate to microlending firms and credit unions and moreso the coming changes once the twin-peaks project makes headway makes the issue of space not just an inconvenience, but a problem that is imperative to resolve.
Bank of Jamaica’s regulatory portfolio is already expansive. In includes 11 banking institutions, a range of remittance providers numbering 237 companies, and a network of 505 locations, 45 cambios or non-bank foreign exchange traders that operate 141 locations, three credit bureaus, the pending onboarding of 26 credit unions, and the continuing onboarding of microlending firms. In the case of the latter, the BOJ is in the process of licensing the mircolenders and now has 50 approved operators listed on its website.
Under the twin-peaks model that’s being adopted, the central bank will become the regulator for both ‘deposit-taking’ and ‘non-deposit-taking’ financial institutions. The FSC will cease being a prudential regulator for the latter grouping but will focus entirely instead on policing market conduct and consumer protection. It might do so under a new name.
The current consideration is that the new FSC as a financial consumer watchdog would also be housed on the BOJ building. The FSC currently operates from Barbados Avenue in New Kingston.
The central bank said the expansion of its headquarters has been under consideration for many years but was delayed by the COVID-19 pandemic.
“Planning for expansion resumed with the ending of the pandemic and before the announcement by the Government of the intention to move to the twin-peaks model of supervision of the financial sector. That announcement, with its implications for impending additional mandates for BOJ, has made planning for physical expansion an absolute imperative,” the central bank said in written responses to Financial Gleaner queries.
“In the ongoing planning and preparation for the transition to twin peaks, and considering the essential collaboration that will be necessary between the two financial sector regulators under that system, there is the possibility that the new market conduct and consumer protection entity will be located within an expanded complex at Nethersole Place, albeit with entirely separate offices and independent operations,” the BOJ said. “However, no decision has been taken on this,” it cautioned.
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