Treasury Cabinet Secretary Henry Rotich has clashed with President Uhuru Kenyatta's senior economic adviser Dr Mbui Wagacha over his proposed creation of a banks authority.
CS Rotich had proposed to have a Financial Markets Conduct Authority (FMCA) to police banks following the indictment of a number of banks in the Ksh9 Billion National Youth Service (NYS) scandal.
Dr Wagacha backed the argument by Central Bank of Kenya (CBK) Governor Patrick Njoroge that the authority was unnecessary.
He further insisted that the proposed law would be rejected by Parliament adding that the CS did not consult before coming up with the document.
[caption caption="CS Henry Rotich"]
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"The law is unlikely to pass or work because it wants to take away roles currently played by the Central Bank.
"It is completely irrelevant and I don’t see it going anywhere. There was no consultation before it was published," he stated.
He, instead, advised that the CS ought to revise the current CBK Act to include a clause on the Financial Conduct Authority (FCA) complete with a board and skilled staff – as an organ oF CBK.
Dr Wagacha added that CBK should also propose the creation of a Financial Stability Committee (FSC) that will be mandated to ensure the money markets, as well as financial institutions, remain stable.
He argues that the organs would assist to avoid confusion over roles: "For example, one regulator would not approve a bond, only for another one to reject because it has adverse information against the issuer."
"We had proposed to have eight directors for the FSC, which would be a body within the central bank. That means that the CBK already has something to work with and it can move quickly to make the changes through Parliament. It should not wait any further," he stated.
[caption caption="File image of Dr Mbui Wagacha"]
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