Sir Frank Alleyne (left) and Dr. DeLisle Worrell signing the MOU today.
Experts from the World Bank and International Monetary Fund are travelling to Barbados next month to complete an assessment of Barbados’ financial sector.
But even before the findings from the two multilateral bodies are presented, senior officials of the Central Bank of Barbados and Financial Services Commission are establishing a joint oversight committee “to closely monitor and respond to developments within the financial system”, among other steps to enhance regulation.
This was announced as FSC Chairman Sir Frank Alleyne and Central Bank of Barbados Governor Dr. DeLisle Worrell signed a memorandum of understanding formalising their regulatory cooperation this afternoon at the bank’s boardroom.
While Sir Frank said the FSAP started last month and that the FSC was “encouraged” by the preliminary findings, Worrell noted:
“The World Bank and the IMF are currently conducting a financial sector assessment programme for Barbados and our regulatory agencies have worked hand in hand on the preparations and we continue to partner in the completion of the assessment when the World Bank and IMF teams return next month.”
Established in 1999, FSAP is “a comprehensive and in-depth analysis of a country’s financial sector”.
Regulators in Barbados are not waiting for the World Bank and IMF to submit their final report before taking their own steps to enhance surveillance.
The MOU establishes an oversight committee comprising principal functionaries of both organisations including the FSC CEO, and Central Bank governor.
It’s objective was to “meet regularly and formulate the Financial Stability Report and to closely monitor and respond to developments within the financial system”.
The wider MOU focus was to “provide detailed parameters for the cooperation between the two entities in relation to the exchange of information, the monitoring of financial soundness indicators for banks, insurance companies and credits unions, and the development of early warning systems and the conducting of stress tests”.
Sir Frank said the FSC, which regulates insurance companies, credit unions, and securities trading, and the Central Bank, which regulates banks, were aiming “to ensure that all residents of Barbados and our international partners are assured that their legitimate interests will be protected”.
“To do this we need to ensure that a number of areas are properly addressed, most notably surveillance, our deployment of early warning indicators of financial stress, that there is a thorough assessment of households and corporate balance sheets, indebtedness and vulnerabilities, development of contingency plans and resolution mechanisms, ensuring that there is no fragmentation within the regulatory and supervisory framework a mapping financial sector inter linkages,” he said.
“In all cases the enhanced work agenda demands high frequency and timely data for analysis and policy decision, another area of key collaboration.
“In the final analysis, as a result of the signing of this MOU today the FSC and the Central Bank will be able to more efficiently strengthen the financial system and accelerate a process which has already begun and one which I am pleased to be a part of,” he added. Worrell pointed out that financial regulars “have cooperated for decades and the bank has for many years lent its expertise in this area to credit unions, insurance companies and securities traders”.
“The Memorandum of Understanding we are signing today therefore codifies a process of working together, which is now firmly established. In partnership we will continue to bend our best efforts towards the health of our financial system in these uncertain times,” he said. (SC)