In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
Guernsey is a leading international insurance center in Europe. Its economy purely depends on the performance of the financial sector. As per the 2003 assessment under the Offshore Financial Center (OFC) program, it is found that the Guernsey Financial Services Commission (GFSC)’s powers have been strengthened in recent years and many recommendations of the 2003 Financial Sector Assessment Program (FSAP) have been implemented. The GFSC has developed a strategy for addressing banks' financial stability risks, but strong policy measures will be essential to deal with the potential vulnerabilities and challenges ahead.
Jersey has put in place a comprehensive and robust Antimoney Laundering/Combating the Financing of Terrorism (AML/CFT) legal framework with a high level of compliance with almost all aspects of the Financial Action Task Force recommendations. The paper discusses a Detailed Assessment of Observance of AML/CFT report on Jersey. Both money laundering and financing of terrorism are criminalized largely in line with the international standard, and Jersey has implemented the provisions effectively.
This paper examines the Financial System Stability Assessment on Jersey. Most banks in Jersey are branches or subsidiaries of large international groups, to which they provide financing. This close relationship reduces risk in normal times, given the groups’ ability to support their Jersey operations. The Jersey Financial Services Commission has significantly reformed the regulatory framework of funds, mainly to make Jersey funds more attractive to institutional investors. A key challenge in insurance supervision is to maintain effective and proportionate regulation of a small sector with limited insurance risk.
Jersey’s macroeconomic performance is generally satisfactory. Unemployment is low, and the trend growth rate and inflation have been satisfactorily examined. A Detailed Assessment of the Observance of the Basel Core Principles for Effective Banking Supervision Report on Jersey was also done. The legal system, which is broadly based on common law with French and Norman elements, is highly developed. The authorities have substantially adequate powers to direct, intervene in, and close a troubled financial institution.
This review of financial sector regulation and supervision in Jersey in the context of the offshore financial center assessment program contains technical advice and recommendations. The report provides a general overview of the financial system, a summary of the assessment findings and the Reports on Observance of Standards and Codes (ROSCs), and the authorities’ action plan. It also presents the detailed assessment for banking, insurance, securities, Anti-Money Laundering and Combating the Financing of Terrorism (AML/CFT), and company and trust service providers.