Authorities must share blame for financial scandals – Poll

A TNS Lanka survey finds that Golden Key and other sagas have eroded confidence in our financial-services sector, LMD reports.
“The public is not amused by the scandalous dealings of financial-services entities,” says business magazine LMD, in its July edition. And according to LMD, an overwhelming 78% point the finger at regulatory authorities such as the Central Bank, saying that they have not done enough to monitor the questionable dealings of crooked financial-services entities.
It is the duty of the Central Bank to educate the public about such operations, respondents say – and they add that the country’s foremost monetary authority should have investigated all financial entities when the first frauds were detected, so as to contain the fallout.
But on the other hand, some 20 per cent of participants believe that the Central Bank should monitor the dealings of only state financial institutions.
How about the depositors though – shouldn’t they take part of the blame? LMD-TNS asked the 500-strong sample population. “Just over 75 per cent of those polled answer in the affirmative. Although these entities promised higher returns, depositors should have checked their backgrounds before parting with their savings, they say, while acknowledging that a lack of awareness about such matters may have played a part in this,” LMD reports.
It adds: “Predictably, the fallout from these scandals has given way to an erosion of public confidence in the financial-services sector. Some 57 per cent are of the view that many businesses engage in unethical practices and say they cannot place their trust in private banks.”
The pioneering magazine’s “Talking Point’ columns also says that “on the flipside, nearly 40 per cent of survey participants point out that there are trustworthy financial institutions in the country and that they have confidence in institutions that have been regulated by the Central Bank”.
The July issue of LMD releases to supermarkets and bookshops on Friday, 3 July.