International Journal of Humanities and Social Science

ISSN 2220-8488 (Print), 2221-0989 (Online) 10.30845/ijhss

A Study of Corporate Failure and the Political Economy of Financial Regulation in Trinidad and Tobago and the Caribbean
Dr. Wayne Soverall, Wilberne Persaud

The corporate failure of CLICO/CL Financial in January 2009, the largest conglomerate in Trinidad and Tobago and the Caribbean, is the worst financial crisis experienced by the region to date. Today, more than three years later, despite a disputed bailout by the Government of Trinidad and Tobago (GOTT), the devastating spillover effects of contagion are still unfolding as regional governments struggle to find appropriate solutions to stabilize their financial systems, mitigate risks, and bring closure to the ensuing financial crisis. Thus, despite a partial resolution by GOTT and a proposal offered by the Government of Barbados (GOB) to its policyholders and those in the Eastern Caribbean, there is still a long way to go in finding a lasting solution. At issue is the nexus between corporate failure and the political economy of financial regulation, especially concerns related to the lack of appropriate national and regional financial regulations to mitigate corporate failure of large and complex institutions deemed too big to fail (TBTF) now and in the future. This paper examines these public policy issues, analyzes them to find answers, and in the conclusion, makes suggestions for improving financial regulation, enhancing the capability of regulators, strengthening regulatory oversight, and empowering regulators to aggressively pursue financial fraud and enforce regulations with a view to mitigating systemic risk in the future.

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