Experts hope for improvements in Pacific banking

Transcript

Financial experts from around the Pacific region have met in Fiji to discuss the development of stable banking and stock market activity.

A lecturer from Griffith University, Parmendra Sharma told Jenny Meyer the purpose of the forum was to strengthen future strategic alliances in the finance sector.

PARMENDRA SHARMA: The banking system is relatively stable at least here in Fiji. But in terms of efficiency there might be some room for improvement. The suggestion was that given the fact that the banking system here in Fiji and elsewhere in the South Pacific is really dominated by the large share presence of Australian banks it might be useful to explore the idea of seeing whether there could be strategies to make the banking  system here in Fiji and the rest of the South Pacific very similar to what it might be in Australia.

JENNY MEYER: And how could that be done?

PS: Some of the things we could be looking at could be the products and services provided and looking at the cost structures. Looking at the environment itself, when I say environment it includes the regulatory environment. So working towards harmonising the environment in Fiji and the South Pacific generally and Australia.

JM: I think you also discussed stock markets. Can you tell me a little bit about hopes for the stock exchange in the South Pacific?

PS: Well it is widely known I suppose now, and it has also been, you know the Prime Minister of Fiji agrees with the fact that the South Pacific stock exchange, while it has been there, it has been in operation for a number of years now for about three decades or so, it has remained small and ill-liquid and inactive. If the Prime Minister even went to the extent of saying that the stock market has remained stagnant over many years. We did a research on this a couple of years back and our paper was published in a journal. And that finding, the finding there was the same as what the Prime Minister has been saying. So the situation is that there has been a number of incentives by the government, a number of efforts by many other stakeholders to develop the South Pacific stock exchange, nothing significant seems to be happening. So in terms of size and in terms of activity, liquidity you know it's not really moving much.

JM: So were there any decisions made about that today?

PS: No, no decisions made but we were exploring. One of the speakers was suggesting that one of the reasons why the stock market may not be developing is that is because of these economies of scale. You know we are operating in a very small market. And so his proposal was to see if there might be an opportunity to form strategic alliances or partnerships or cooperation with other stock markets in the region. And that would just be the Papua New Guinea stock exchange at this stage and also with the Australian stock exchange. We had the Chief Executive of the South Pacific stock exchange in the audience and she was one of the speakers as well, she seemed positive about the idea of exploring that proposal but I'm not sure of how the other stakeholders might look at it. But we are hoping to have further discussions with the Chief Executive of the stock exchange in the next few days.