Can a Central Bank Governor Act Alone… or Is Sri Lanka Now Criminalising Collective Decision-Making Selectively?
Be that as it may, one of the most uncomfortable questions now quietly resurfacing inside Sri Lanka’s legal, financial and political circles is not merely whether Ajith Nivard Cabraal should once again face proceedings over the infamous Greek Bonds investment controversy.
The deeper question is this:
how exactly does a Central Bank Governor acting within a Monetary Board structure become isolated as the principal surviving accused in a decision that could never realistically have been executed by one individual acting alone?
Because central banking does not function like a private wallet.
Reserve-management decisions involving sovereign investments, foreign bonds and portfolio allocation ordinarily pass through institutional frameworks involving:
investment committees,
technical evaluations,
reserve managers,
risk assessments,
Monetary Board processes,
documentation structures,
market advisories,
and operational execution layers.
In other words, no Governor physically wakes up one morning and independently transfers sovereign reserve money into foreign bond markets purely on personal whim.
That is not how modern central banking works.
Which perhaps explains why the latest developments surrounding the Greek Bonds case are beginning to generate renewed legal and philosophical discomfort well beyond partisan politics.
Particularly because several fellow officials initially charged alongside Cabraal reportedly secured discharge without equivalent continuing conditionality, while the spotlight now increasingly narrows around the former Governor himself.
And naturally the question emerges:
why?
Because if the underlying allegation is that the purchase itself constituted wrongful or unlawful conduct, then the decision-making architecture surrounding such investments becomes critically important.
Was this a collective institutional process?
Or was it genuinely a one-man operation?
Those are not political questions.
They are fundamental legal questions.
And perhaps even more significantly, the matter becomes exceptionally delicate because Sri Lanka’s Supreme Court had already previously examined substantial aspects of the Greek Bonds controversy.
The apex court reportedly observed there had been no systemic deviation from established procedures and that the Monetary Board members could not simply be held personally liable merely because certain investments later generated losses. The broader reserve-management portfolio itself reportedly yielded a net gain in the region of approximately USD 420 million.
That point matters enormously.
Because reserve management is not casino gambling conducted investment-by-investment in isolation.
Central banks globally operate diversified sovereign portfolios where some positions inevitably underperform while others generate significant gains. The ultimate assessment ordinarily concerns the integrity of the process, prudence of decision-making and adherence to institutional frameworks rather than the hindsight profitability of one individual trade.
Otherwise every adverse market movement risks becoming potential criminal exposure.
And that creates a profoundly dangerous precedent.
Because once prosecutors begin criminalising economic judgment retrospectively, central bankers, treasury officials and public financial managers inevitably become paralysed by defensive fear rather than guided by strategic economic reasoning.
That does not mean wrongdoing can never occur.
Of course it can.
Corruption, abuse of office, insider arrangements and reckless misconduct must always remain subject to scrutiny where evidence exists.
But there is also an equally important principle underpinning financial governance systems globally:
bad outcomes alone do not automatically prove criminal intent.
Which is precisely why the selective narrowing now perceived in the Cabraal proceedings is generating such unease.
Because if the transaction architecture itself involved multiple institutional layers, approvals and operational participants, then isolating one individual while others exit the prosecutorial landscape inevitably creates questions regarding consistency, proportionality and legal coherence.
Especially after earlier Supreme Court scrutiny had already substantially addressed questions relating to procedural deviation and liability.
And perhaps that is where the matter now becomes larger than Ajith Nivard Cabraal himself.
The real issue increasingly concerns the boundaries between:
economic misjudgment,
policy risk,
administrative responsibility,
collective decision-making,
and criminal culpability.
Sri Lanka has struggled with this distinction repeatedly.
Too often, complex economic failures become retrospectively simplified into politically digestible narratives requiring villains rather than nuanced institutional analysis. Public anger understandably demands accountability. But accountability itself becomes dangerous if it evolves into selective reconstruction of collective decision-making processes after the fact.
Investment in Greek Bonds was done by CBSL well BEFORE the crisis,.not AFTER the Crisis ….. (Not a lot of people know that)
Greece was NOT in difficult times or in danger of crashing at the time of the investment in it’s Government Bonds by the CBSL in April 2011. Greece’s Credit Rating at that time of BB+ was far better than Sri Lanka’s current rating of CCC or then rating of BB-. Greece had also been provided with favourable reviews by the IMF, EU Stability Fund, and the European Union. Many billions of USD was being invested in Greece Government Bonds by the world’s top investment agencies and Country Wealth Funds at the same time the CBSL was making its own investment in the Greece Government Bonds.
The entire Monetary Board had approved the “investment policy” which covered the investment in Greece Government Bonds, and had also been duly informed of the investment in Greek Bonds and approved it.
The CBSL had also made it’s highest ever Forex Reserves Management profit in history in that year of 2011 which was USD 430.2 million and hence it is clear that then Governor Cabraal had every intention of making profits for the CBSL, and certainly not to cause any loss to the CBSL or the Government.
If it is contended that then Governor Cabraal is personally responsible for the loss of Rs.1.8 billion as a result of the investment in the Greece Government Bonds, he should then be properly held personally responsible for the profit of USD 430.2 million or Rs.47.3 billion – i.e., 26 times the alleged loss – that was made by the CBSL in that year.
Because sophisticated sovereign financial systems depend heavily upon one fragile reality:
officials must be able to make difficult investment and policy decisions without constantly fearing that future political climates will reinterpret adverse outcomes as criminal conduct years later.
Otherwise risk management itself collapses into paralysis.
And perhaps the most uncomfortable question of all still remains unresolved:
if the Greek bond purchases were truly unlawful at inception, how could they possibly have been operationally executed without broader institutional participation inside the Central Bank framework itself?
That question continues hovering over the case. Quietly. Persistently. And increasingly unavoidably. Because in modern central banking, individual authority may be powerful.
But sovereign reserve management is almost never truly solitary.
Which perhaps explains why this controversy now feels less like a simple corruption prosecution and more like a much larger struggle over how Sri Lanka chooses to define responsibility when state financial decisions later become politically toxic.
And that distinction may ultimately matter far beyond one former Governor alone.
