FSC, Central Bank sign MOU 8/30/2013 A MEMORANDUM of Understanding (MOU) has been officially signed between the Financial Services Commission (FSC) and the Central Bank of Barbados ensuring greater stability in Barbados’ financial system. Principals of the two entities met at the Tom Adams Financial Centre yesterday afternoon to cement an already existing relationship as regulators of the securities, insurance, credit union and banking sector within Barbados. Chairman of the FSC, Sir Frank Alleyne, stated yesterday that the purpose of this collaborative effort was to ensure that all residents of Barbados and international partners are assured that their legitimate interests will be protected. “It must be clearly understood by all that the Central Bank of Barbados and the FSC cannot discharge their respective legal responsibilities successfully if their operations are separated with Chinese walls,” he said. “Barbados has only one financial system where operations within it are very much intertwined and clearly as regulators we need to collaborate to ensure the integrity of the system is maintained.” To achieve this, he said it must be assured that a number of areas are properly addressed, most notably surveillance, deployment of early warning indicators of financial stress, thorough assessment of households and corporate balance sheets, indebtedness and vulnerabilities. Sir Frank also highlighted the need to develop contingency plans and resolution mechanisms, ensuring there is no fragmentation within the regulatory and supervisory framework and mapping financial sector inter-linkages. “In all cases, the enhanced work agenda demands high frequency and timely data for analysis and policy decision,” he indicated. Central Bank Governor, Dr. Delisle Worrell, reminded that the World Bank and International Monetary Fund (IMF) are currently conducting a Financial Sector Assessment programme for Barbados. He explained that 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 team return next month,” he said. He stated that Barbados has a history of cooperation among its financial regulators that goes back decades and the Central Bank has for many years lent its regulatory expertise to the regulators of credit unions, insurance companies and securities traders. The Central Bank Governor said the MOU therefore codifies a process of working together which is now firmly established, adding, “In partnership we will continue to lend our best efforts toward the health of our financial system in these uncertain times.” Legal Counsel Sadie Dixon explained that the MOU also establishes an oversight committee comprising principal functionaries of both the FSC and the Central Bank, including the CEO of the FSC and the Governor of the Central Bank. She said the objective of this committee is to meet regularly to discuss and formulate the Financial Stability Report and to closely monitor and respond to developments within the financial system. “We are confident that the synergies between ourselves and the FSC, coupled with formal arrangements being signed, as well as imminent amendments to the Central Bank of Barbados Act, will further strengthen the mechanisms for ensuring and maintaining financial stability in Barbados,” she said. (JH) barbadosadvocate/newsitem.asp?more=local&NewsID=32126
Posted on: Fri, 30 Aug 2013 12:47:37 +0000