WARNING: BARBADOS’ FINANCIAL SERVICES SECTOR TO BE FULLY SCRUTINISED – WORLD BANK & IMF ON THE PROWL…

Barbados’ financial services sector will undergo a comprehensive health check in July.

The World Bank and the International Monetary Fund will conduct a financial sector assessment programme (FSAP) between July 1 and 17.

(PERSONAL FILE IMAGE) This is the third such assessment of the island's financial services sector; the other two evaluations were completed in 2002 and 2008. On both occasions, the local financial services sector was deemed to be well regulated and generally compliant with the international standards established by the Basel Committee on Banking Supervision (BCBS) and the International Association of Insurance Supervisors (IAIS).

(PERSONAL FILE IMAGE) This is the third such assessment of the island’s financial services sector; the other two evaluations were completed in 2002 and 2008. On both occasions, the local financial services sector was deemed to be well regulated and generally compliant with the international standards established by the Basel Committee on Banking Supervision (BCBS) and the International Association of Insurance Supervisors (IAIS).

Director of Bank Supervision at the Central Bank of Barbados, Marlene Bayne, explained that the Bank and the Financial Services Commission (FSC) have been jointly preparing for the review since the start of 2012.

She commented further that the preparatory work for the FSAP included a self-assessment of Barbados’ compliance with the international standards for banking, insurance and credit unions.

“This self-assessment sought to identify any weaknesses in the existing system of supervision and regulation, and to allow for the appropriate remedial measures by the supervisory authorities. Following the self-assessment, enhancements to the supervisory framework by way of amendments to the legislation or practices were completed. The Bank and the FSC are currently finalising arrangements for the onsite visit by the IMF and World Bank reviewers,” Bayne further stated.

The FSAP, which can be likened to a Central Bank’s examination of a commercial bank, is a comprehensive and in-depth analysis of a country’s financial sector.

The World Bank and the IMF have been conducting these assessments since 1999 of both developed and developing countries, including the United Kingdom, the United States of America, Canada, Australia, Belgium, New Zealand and India, to name a few. This year, the World Bank and IMF have 25 such assessments underway or in the pipeline.

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