Appendix I: The Bahamas: Risk Assessment Matrix

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Appendix II: Stress Testing Matrix (STEM)

A. Credit Risk Stress Tests

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The stress tests covered the onshore sector. One bank with small onshore operations is excluded since most of its activity is in the offshore segment, whereas the onshore and offshore activities were reported together in the data.

B. Liquidity Risk Stress Tests

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C. Interest Rate Risk Stress Tests

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Appendix Table 8.

The Bahamas: Selected Economic Indicators

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Sources: Central Bank of The Bahamas; Department of Statistics; Ministry of Finance; UNDP Human Development Report; CIA World Factbook and Fund staff projections.

Revised national accounts data.

The 2011 figure is based on November survey and the 2012 figure is based on May survey.

The data refer to fiscal years ending on June 30.

The data refer to calendar years.

Appendix Table 9.

The Bahamas: Financial Soundness Indicators of the Onshore Banking System

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Sources: Central Bank of The Bahamas; IMF staff estimates.

Annexes: Observance of Financial Sector Standards and Codes—Summary Assessments

This Annex contains the summary assessments of the Central Bank of The Bahamas’s observance of financial standards and codes. These assessments help identify the main strengths of the supervisory, regulatory and market infrastructure framework in managing potential risks and vulnerabilities in the financial system. They also point to areas that need strengthening and further reform.

These summaries are based on detailed assessments of the following international standards:

  • Basel Core Principles (BCP) for Effective Banking Supervision – by José Tuya (external expert) and Michael Deasy (external expert).

  • IAIS Insurance Core Principles (ICP) – by Rodolfo Wehrhahn (IMF) and Christina Urias (external expert).

  • IOSCO Principles and Objectives of Securities Regulation – by Richard Britton (external expert).

Annex I. Basel Core Principles for Effective Banking Supervision

A. Introduction

1. This assessment of the Basel Core Principles for Effective Banking Supervision (BCP) was conducted from July 9 through July 24, 2012. As agreed with the authorities, the supervisory framework was assessed against the BCP methodology issued by the Basel Committee on Banking Supervision (BCBS) in October 2006. The CBoB is the sole supervisor of the banking system and as such, the assessment covers only the CBoB. An OFC assessment was conducted in 2004; however, the grading is not comparable to this assessment as the principles and methodology were revised in 2006. The assessment was performed by consultants Michael Deasy (formerly with the Central Bank of Ireland) and José Tuya (formerly with the Office of the Comptroller of the Currency, USA).

2. Since the IMF OFC Assessment in 2004, there have been significant reforms implemented. In its efforts to implement international standards, the CBoB has increased its focus on anti-money laundering, tightened the licensing process and made reforms in its banking supervision approach. Important features of the new supervisory and regulatory regime now include broader and more uniform supervision of bank and nonbank financial activities and stronger mechanisms for international cooperation among Bahamian authorities and their foreign counterparts. The CBoB has implemented a risk-based bank rating system to aid in the targeting of supervisory activities to the higher risk areas.

3. In conducting the assessment a number of information sources were reviewed and significant reliance was placed on the authorities’ self-assessment. The self-assessment was thorough and facilitated the BCP review. In addition to reviewing the self-assessment, the assessors reviewed the responses to a questionnaire sent to the authorities as part of the information gathering process which requested more detailed information to support the self-assessment. The BCP assessment included meetings with CBoB supervisory, legal and policy staff and meetings with commercial banks, the bankers’ association, the accounting association, an accounting firm and the MoF. Open access was provided to review inspection reports, licensing and enforcement documents and on-line presentations on the supervisory process so that assessors could evaluate that a review of bank compliance with requirements was effected by the CBoB.

4. The assessors appreciated the collaboration and hospitality of the CBoB. The staff always made itself available to discuss the principles and greatly facilitated the BCP assessment. Coordination of meetings, obtaining additional information and responding to ad hoc inquiries was managed in an extremely efficient and professional manner.

B. Background

5. The financial system is exceptionally large, reflecting the country’s role as a major OFC. It comprises domestic and offshore banks and trust companies, insurance companies (both domestic and external), pension funds, credit unions, and other nonbank intermediaries. At end-2011, there were 271 banks and trust companies with active licenses, of which, 155 are restricted (mainly nominee trust companies). Banks licensed in the Bahamas hold B$595 billion in assets (76 times GDP). Offshore banks account for some 98 percent of the total. The CBoB is the home country supervisor and responsible for consolidated supervision of, three indigenous, deposit-taking commercial banks.

6. The Bahamas is the fourth largest OFC (after the Cayman Islands, Hong Kong SAR, and Singapore). At end-2011, Bahamian banks held 12 percent of all foreign assets held by banks in OFCs worldwide. In March 2012, the foreign assets of offshore banks registered in The Bahamas amounted to US$501.2 billion.

7. The domestic (commercial/onshore) banking sector and the international (offshore) financial center are essentially fully segmented, with claims limited to a very modest amount of intra-group lending operations. Offshore entities are prohibited from holding balances in Bahamian dollars except to finance local expenses and cannot invest in domestic securities. They have extremely limited exposure to domestic real estate markets amid strict capital controls enacted by the CBoB, although occasionally they may assist high net worth individual clients in acquiring real estate in The Bahamas.

8. Commercial banks are primarily funded by deposits and equity (71 percent and 18 percent respectively). Capital market and interbank market funding is currently negligible. The share of equity funding has increased since 2003, partly due to conversion of foreign branches into subsidiaries. The corresponding capital injections accompanying the subsidiarization have replaced liquidity provision from parents.

9. The commercial banks engage in traditional banking activities, primarily providing residential mortgages and consumer finance to Bahamian residents. Domestic residential mortgages account for about 23 percent of the banks’ assets. Other loans, including consumer, commercial and non-resident loans, accounted for about 36 percent of the total assets in March 2012. Exposure of the commercial banks to the public sector has increased significantly since 2008 to 14 percent of total assets, as the commercial banks have absorbed a large part of government securities issued since then.

10. Financial supervision is performed by three separate institutions: the CBoB, the Insurance Commission of The Bahamas (ICB), and the SCB. Supervisory coordination takes place through regular meetings of the GFSR, consisting of the CBoB, the SCB, the ICB, the Inspector of Financial and Corporate Services, and the Compliance Commission. The GFSR is chaired by the CBoB and has been working towards greater harmonization of the regulatory system.

11. The Bahamian economy has continued its recovery from the global financial crisis. A collapse in tourism led to a 5.4 percent decline in output in 2009, but the economy has gradually picked up and GDP is expected to grow about 2.5 percent in 2012, due to a rebound in tourism and to large foreign and public investment projects (including the US$3.5 billion Baha Mar project). Substantial FDI-related imports and higher oil prices will widen the external current account deficit in 2012, but reserves are expected to remain reasonably strong. Downside risks to growth stem from the country’s high dependence on tourism, which could be disrupted by a weakening of the U.S. economy, a prolonged increase in oil prices, or a large-scale hurricane.

12. The Bahamas has a well-developed legal framework that provides adequate support for banking supervision. The CBoB can operate independently and has the authority to impose sanctions, take preventive corrective action and resolve weak banks, including revocation of the license. A deposit insurance system is in place to protect Bahamian dollar deposits.

13. A credit bureau system is not operational in The Bahamas. The authorities are reviewing options for the establishment of a credit bureau to enable banks to better determine a prospective borrower’s total indebtedness. A draft Credit Reporting Bill, 2012 has been prepared and is currently under review by the authorities.

C. Findings

14. Significant changes have occurred in The Bahamas financial system and the supervisory regime in recent years. There have been amendments to the CBoB Act, 2000 (CBBA) and the Bank and Trust Companies Regulation Act (BTCRA) to broaden the CBoB information sharing authority, and strengthen supervisory enforcement powers. A risk assessment process was introduced in the last quarter of 2010 which reviews all risk areas and assigns ratings to aid in establishing supervisory priorities. Shell banks are no longer permitted to operate in The Bahamas.

15. The onshore banking system is well capitalized, liquid, and profitable, but credit risk should continue to be monitored closely, especially in view of ongoing economic uncertainties. High NPL ratios remain the key challenge for the onshore banking system, particularly for mortgages, which constitute over half of NPLs. However, the authorities remain vigilant about the potential impact of NPLs on bank capital and have substantially improved credit risk monitoring of onshore commercial banks. Requirements and practices on provisioning and asset impairments are in compliance with international standards. Nonetheless, there is some degree of uncertainty on the overall evolution of house prices since reliable house price indices are not available and there are relatively few transactions on which to base firm judgments, although independent valuations are required for problem mortgages

16. There is no obvious near-term threat to bank stability since banks are very well capitalized (both in terms of quantity and quality of capital), profitable, and highly reliant on deposits and equity, which substantially limits funding risks. Stress tests confirm that the commercial banks can withstand severe shocks in terms of both solvency and liquidity, though banks are heterogeneous in their performance.

17. Capital ratios are calculated in accordance with Basel I. However, since 2005 the Central Bank has been steadily and progressively working on completing the requirements for compliance with Basel II Pillar II—Supervisory Review. As of last quarter of 2010, the commencement of the roll-out of the enhanced risk based framework (incorporating the comprehensive risk assessment tool), formalized the CBoB’s approach with Pillar II expectations.

18. There have been significant enhancements to the risk management guidance issued to banks and the supervision of those risks. Nonetheless, because capital ratios are calculated in accordance with Basel I, there is no specific capital cover for specific risks, e.g., market risk, operational risk, etc. The level of ratios among the banks, however, is very high and would compensate for the lack of specific cover for these risks. CBoB will be implementing the capital charges for market risks commencing the third quarter of 2012, thus completing the requirements for full compliance with Basel I. To date its risk based framework meets the expectations for Basel II-Pillar II as it relates to certain aspects of Supervisory Review. Pillar III-Minimum Disclosures is due to be implemented before year-end 2012. Focused efforts will be given to consulting and implementing Pillar I requirements by the beginning of the third quarter of 2013. Regarding Basel III, banks have been sensitized to the requirements and CBoB intends to consult the stakeholders regarding its positions on same by end 2013.

19. CBOB has a cohort of knowledgeable and dedicated staff in place. At the same time it should consider recruiting additional staff, particularly specialist staff, to meet the demands of an ever increasingly complex supervisory environment.

Annex Table 1.

The Bahamas: Summary Compliance with the Basel Core Principles—ROSCs

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Annex Table 2.

The Bahamas: Recommended Action Plan to Improve Compliance with the Basel Core Principles

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D. Authorities’ Response to the Assessment

20. The CBoB would like to convey its appreciation to the IMF FSAP Mission for this comprehensive and balanced assessment of The Bahamas’ compliance with the Basel Core Principles for Effective Banking Supervision. The assessors broadly recognize that The Bahamas has in place a very strong legal and regulatory framework for banking supervision, and we appreciate the assessors’ recommendations that guidelines and policies be further enhanced to reflect our current supervisory practices which, in themselves, are commensurate with international best practices. These expectations are aligned with the CBoB’s ongoing commitment to ensure the robustness of our regime.

21. As recognized in the assessment, a number of initiatives are already underway that will allow The Bahamas to enhance its banking supervision legislative regime and policy framework.

22. The Bank intends to have the draft Banks and Trust Companies Regulation (Amendment) Bill, 2012 enacted and to bring the draft Banks and Trust Companies (Administrative Monetary Penalties) Regulations, 2012 (the Regulations) into force in the near future, given that the industry consultation on the drafts is now complete. The draft Bill will strengthen and clarify the Central Bank’s existing penalties enforcement regime by empowering the Central Bank to impose administrative monetary penalties or fines on any person or licensee in respect of the contravention of the Banks and Trust Companies Regulation Act, 2000 (the Act) or regulations made under the Act.

23. The proposed amendments to the Act also include enhanced fit and proper requirements, new provisions relating to controllers of licensees, and new provisions which would empower the Central Bank to impose prohibition orders against persons performing regulated functions, where such persons do not, or no longer, meet the Bank’s fit and proper requirements.

24. When enacted and brought into force, the draft Banks and Trust Companies Regulation (Amendment) Bill, 2012 and the draft Banks and Trust Companies (Administrative Monetary Penalties) Regulations, 2012 will enhance the Central Bank’s compliance with Basel Core Principles.

25. The CBoB has worked aggressively over the years on the Risk Based Supervisory Framework, which has established the foundation of our approach to Pillar II requirements under the Basel II regime. A significant next step will be the alignment of this framework with the broader initiation of the Basel II-ICAAP program. The CBoB has made tremendous strides toward implementation of its market risk regime, having recently piloted the reporting forms and guidance notes with all the licensees that met the de minimis threshold. Also, the CBoB is at an advance stage of releasing, in final, its guidance document on Interest Rate Risk, which has already undergone the industry consultative process.

26. In the immediate future, the Central Bank will commence industry consultation on several key draft policy guidelines, i.e., Market Risk, Operational Risk and Minimum Disclosures. The latter of course, will set out the minimum requirements for Pillar III disclosures. Given the number of work streams underway, we are optimistic that, in the coming weeks and months, we would have successfully implemented these outstanding policy development initiatives. To ensure that we are able to deliver on our planned enhancements to banking supervision, the CBoB is already assessing its supervisory resource requirements and, at the same time, leveraging technology to achieve efficiency savings.

Annex II. Observance of the IAIS Insurance Core Principles

A. Introduction and Scope

27. This report is a full assessment of The Bahamas’s compliance with the Insurance Core Principles (ICPs) of the International Association of Insurance Supervisors (IAIS), as adopted in October 2011. The review was carried out as part of the 2012 Financial Sector Assessment Program (FSAP) assessment of The Bahamas, and was based on the regulatory framework in place, the supervisory practices employed, and other conditions as they existed in July 2012. The assessment was carried out by Mr. Rodolfo Wehrhahn, Technical Assistance Advisor in the Financial Supervision and Regulation Division, a part of the Monetary and Capital Markets Department, IMF and Ms. Christina Urias, former Insurance Commissioner, Consultant.

28. Regulation and supervision of the insurance industry in The Bahamas is the responsibility of the newly established Insurance Commission of The Bahamas (ICB). The ICB is the ultimate supervisory authority of the insurance sector that includes insurers, brokers, agents, salesmen, underwriting managers and external insurers (see External Insurance Act 2009). This assessment focuses on the ICB.

29. The assessment is based solely on the laws, regulations, and other supervisory requirements and practices that were in place at the time of assessment. Ongoing regulatory initiatives are noted by way of additional comments. The assessors met with staff from the ICB and the Ministry of Finance (MoF), insurers, industry associations, professional bodies and audit firms. The assessors are grateful for the full cooperation extended by all.

B. Executive Summary

30. Insurance supervision in The Bahamas has significantly improved in the past few years, fostered by the enactment of insurance legislation in 2009 and the creation of the ICB with a highly qualified staff and the power and independence to properly supervise the industry. The amount of infrastructure and processes created in the short time since enactment is commendable. Actions taken by the ICB have already had a very positive impact on the insurance market in The Bahamas. These include the following: (i) a major clean up of non active insurers has taken place; (ii) the overdue premium receivables have dropped dramatically with the introduction of a penalty for receivables beyond 30 days; (iii) financial requirements for insurers, brokers and agents have been put in place and have been enforced; (iv) quarterly supervisory meetings with insurers are taking place; and (v) annual stress testing is required for life insurers.

31. Risk-based supervision (RBS) is still in its initial stages and essential onsite and offsite supervisory tools for proper supervision need development. Also a standardized risk sensitive solvency framework needs to be fully implemented. The ICB is aware of the drawbacks of such a simplistic solvency regime and for the large life insurers it has required independent consultant actuaries to calculate the minimum capital requirement (MCR) based on the Canadian solvency regime. The ICB is making progress in developing ladders of intervention within its solvency framework for the exercise of progressive escalation of regulatory and remedial intervention.

32. ICB needs to enhance its market conduct supervision to improve consumer protection regulation. The ICB’s consumer protection activities are only just beginning and disclosure requirements are under development that will allow the ICB to obtain, track and analyze the nature, scope and quantity of consumer complaints and identify the companies involved. Insurers are required to establish procedures to provide disclosure of information to customers and to deal with customer complaints, but there are no specific requirements for claims handling practices.

C. Summary of Observance of the Insurance Core Principles
Annex Table 3.

The Bahamas: Summary of Observance of the Insurance Core Principles

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D. Recommendations and the Authorities’ Responses
Annex Table 4.

The Bahamas: Recommendations to Improve Observance of ICPs

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E. Authorities’ Response to the Assessment

33. The ICB welcomes the detailed assessment of the observance of the IAIS Insurance Core Principles (ICPs) conducted by the IMF through the FSAP mission. The assessment has been particularly encouraging at a critical time where the acknowledgment of our accomplishments by the IMF validates the significant progress we have made in insurance supervision over the last three years. We consider the findings of the FSAP an important benchmark as we continue to develop a robust supervisory and regulatory framework consistent with international standards and best practices. The assessors have given specific commendation for the enactment of insurance legislation and the establishment of the ICB with qualified staff, authority and autonomy to provide effective supervision. Significant improvements in supervisory infrastructure and processes were also recognized as noteworthy achievements.

34. Many of the recommendations of the FSAP have already been under consideration by the ICB, and we have developed a plan to implement most of these initiatives over the near to medium term. Some of the others can readily be incorporated into our plan and we have prioritized these as appropriate, given our resources and ongoing work plan. Below we highlight our response to some of the more notable recommendations made in the report.

Principles on the Supervisor and Cooperation (ICPs 1–3, 25–26)

35. The majority of the recommendations made with respect to the captioned principles are already incorporated into the ICB’s three year work plan and we will continue our efforts to formalize our internal processes, develop guidelines and improve our systems. We continue to strengthen our relationship with our local and regional regulators and have been recently elected to position of Vice-President of the Caribbean Association of Insurance Regulators, a position which we will use to steer the progress toward even greater cooperation and information sharing among regional regulators. Furthermore, we are currently reviewing a draft MOU with a fellow regulator in the region and we intend to enter into MOUs with home regulators of our major foreign insurers over the next eighteen months. With the assistance of the Toronto Centre, and in cooperation with the Central Bank and the Securities Commission we are embarking on a programme to develop our Crisis Management framework. The first phase of this initiative will be completed in November 2012. It is intended that at the conclusion of that programme all regulators will agree on a Crisis Management protocol and develop consistent frameworks.

Principles on Operational Requirements (ICPs 4–8)

36. Our three year plan addresses all the areas noted under the captioned ICP’s, namely licensing, change in control, corporate governance, risk management and internal controls. We will develop comprehensive best practices for the industry in the near and medium term. In the interim, we have drafted assessment criteria for corporate governance and risk management that incorporate best practices including roles and responsibilities, performance and risk indicators for key risk management functions. These will be released for industry consultation January 2013 along with the Risk Based Supervision Methodology and Framework and the Ladders of Supervisory Intervention. Additionally, we have carried out ad hoc onsite examinations addressing various aspects of corporate governance. We have now commenced a more integrated onsite examination programme which is consistent with our supervisory framework.

Principles on Supervisory Practices (ICPs 9–12, 23–24)

37. We continue to implement our Risked Based Supervision Framework, incorporating enhanced off site monitoring and focused on site examinations. As noted above, we intend to consult with the industry early in 2013 on the framework, Ladders of Intervention and the Risk Assessment Criteria. Much of the planning and preparation for our onsite examinations have been completed and two examinations are scheduled for early September 2012. Our legislation grants us the authority to conduct onsite examinations as often as needed and we are not required to give notice to the insurer, but will do so as appropriate. Further, the ICB may require the production of any information from an insurer and other related parties even where such activities are outsourced.

38. With respect to group wide supervision, we will incorporate consolidated supervision measures into our Risk Based Supervision Framework to ensure that those entities which are part of groups are effectively supervised on a consolidated basis. Additionally, we will continue to participate and become more proactive as appropriate in local and regional colleges of regulators for the supervision of group entities.

39. We acknowledge that there is work to be done in the area of macro prudential supervision and we anticipate that with the implementation and continued development of our quarterly reporting system we will further enhance our capabilities in this area. Further, the ICB has undertaken horizontal / cross-system reviews in a number of key areas over the last few years including, but not limited to actuarial valuations, early warning indicators, reinsurance and solvency. The ICB has required life insurers to perform stress testing and will also review these on a cross sector basis. Additionally, following our onsite examination for investments and investment management processes we will undertake a horizontal review and develop best practice guidelines.

Principles on Prudential Requirements (13–22)

40. The ICB is committed to the development of a Risk Based Capital Framework in the medium term. We believe that the Risk Based Supervision Framework is a first step in that direction because it facilities the assessment of capital adequacy based on the risk profile of the insurance company. However, we note your recommendations for interim measures to modify the capital test to adopt a total balance sheet approach. These recommendations will be built into our supervisory plans for the very near term.

41. Other areas such as investments, valuation, intermediaries, market conduct, and fraud are a priority for the ICB and a number of initiatives have been scheduled to address these areas. The recommendations noted will be incorporated to the extent appropriate for our market.

42. On the matter of valuing investments for solvency purposes, it must be noted that investment instruments are not rated in our market. As such, the Commission has evaluated the credit quality and liquidity of categories of instruments based on knowledge of the market and the discount rates applied to the category are published in the Regulations. This area has been reviewed and discussed with industry participants and changes were adopted following these consultations. Also, while we agree that the current exchange control requirements limit insurers’ ability to diversify their portfolio and match their long-term liabilities, any relaxations to exchange controls will have to be considered by the Government, as the exchange control regime is a crucial part of The Bahamas’ economic stability. However, the ICB will engage in dialogue with the Government regarding this recommendation.

43. Since taking over the AML functions from the Compliance Commission of The Bahamas (CCB) in 2010 our staff has undergone a number of training activities hosted by the CCB. In addition, we continue to work closely with the CCB and leverage the expertise of its staff. It should be noted that while the law does not require general insurers to undergo an AML examination and implement AML systems, the ICB has encouraged general insurers to implement such systems to the extent appropriate given their associated risks.

44. Finally, the assessment has affirmed our plans and our progress. We have taken note of the recommendations and the ICB has an aggressive agenda for continued development of our supervisory and regulatory regime and compliance with the IAIS ICPs. ICB is committed to completing the implementation of our Risk Based Supervisory Framework, to formalizing and publishing our supervisory processes, to the ongoing development of policies, guidelines and other best practices, to promoting fair market conduct, and generally to continuing to enhance our people, processes and systems.

Annex III. Implementation of the IOSCO Objectives and Principles of Securities Regulation

45. Compliance with the International Organization of Securities Commissions (IOSCO) Principles is generally high, although some weaknesses need to be resolved. The new SIA has dealt effectively with most of the issues identified in the 2004 assessment. It has reinforced the powers of the SCB to supervise the securities markets and firms and individuals carrying on securities business and to impose effective sanctions in the event of a breach of the law, regulations and rules made under it. The SIA has secured the independence of the SCB from Government although issues concerning the stability of Government funding remain. These are being addressed. The SCB is better resourced in terms of numbers of professional staff and technical facilities. The full impact of the SIA on licensees and public issuers will only begin to become apparent towards the end of 2012 and into 2013.

46. Regulation of the investment funds industry has not kept pace with regulatory developments globally. The current governing legislation, the IFA, does not provide sufficiently for the SCB, as the regulator of investment funds, to set mandatory standards for the management of the assets of a fund and their protection as is now current good practice. The need to update the IFA is recognized by the Government, the SCB and the industry and initial consultations are underway. Although amendment to the Act is necessary, the SCB could take a more proactive stance by expanding the scope of its inspections beyond the current focus on fund administrators, to cover those fund managers, operators and custodians with a physical presence in the jurisdiction.

47. The SIA provides an effective framework to enable the sharing of information and cooperation between the SCB and other regulators, domestic and foreign on supervisory and enforcement matters. Recent amendments to the SIA at the request of IOSCO are intended to enable the SCB to become a full signatory to the IOSCO MMoU. The SCB (and the Office of the Attorney General in criminal matters) have dedicated resources to responding in a timely and effective fashion to requests for information from overseas regulators and appear strongly committed to playing a full part in measures to detect and prosecute cross border abusive and criminal conduct.

I. Introduction

48. An assessment of the level of implementation of the IOSCO Principles in The Bahamas was conducted during July, 2012 as part of the Financial Sector Assessment Program. An initial IOSCO assessment was conducted in 2002. At that time several weaknesses in the scope and effectiveness of securities market regulation were identified. Since then The Bahamas has gone through a process of updating the key legislative Acts governing the provision of financial services. The SCB has also grown in size and responsibilities and has adopted more intensive and focused supervision of licensees.

II. Information and Methodology Used for Assessment

49. The assessment was conducted based primarily on the IOSCO Principles and Objectives of Securities Regulation 2003 and the Assessment Methodology as updated in 2011. The disparity arose because the FSAP commenced prior to the date at which assessment against the new Principles became mandatory. It was agreed with the authorities that the benchmarked assessment would be based on the original 30 Principles and not the new 38. In practice, the SCB prepared an extensive self-assessment based on the 38 Principles and the new Methodology which included detailed descriptions of the legal basis for the exercise of the SCB’s powers. Compliance with the new Principles was not however benchmarked.

50. The IOSCO methodology requires that assessors not only look at the legal and regulatory framework in place, but also at how it has been implemented in practice. The ongoing global financial crisis has reinforced the need for assessors to take a critical look at, and to make a judgment on, supervisory practices and to determine whether they are sufficiently effective. Among other exercises, such a judgment involves a review of the inspection programs for different types of supervised entities, the cycle, scope and quality of inspections as well an assessment of how the agency follows up on findings, including by using enforcement actions. This entails extensive discussions with the staff of the regulator when were extremely helpful, frank, and cooperative.

III. Regulatory Structure

51. The SCB is the sole regulator responsible for the administration of the securities laws. These laws are the SIA which replaced its 1999 predecessor in December 2011; and the IFA. It is also responsible for the operation of the Financial and Corporate Service Providers Act, 2000 (FCSPA) but this role was not part of the assessment. It thereby supervises and regulates the activities of the securities and capital markets and firms and individuals carrying on securities business as defined, investment funds, investment fund administrators, and corporate and financial service providers (the latter provide financial services for which a license under the banking, securities and insurance laws is not required). The components of the SCB’s mandate include the formulation of principles to regulate and govern investment funds, securities and capital markets; the maintenance of surveillance over the sector, ensuring orderly, fair and equitable dealings; creating and promoting conditions to ensure orderly growth and development; recommending regulations to the Minister and formulating rules. In executing its mandate, the SCB issues regulatory tools, rules guidance etc. to facilitate the authorization of licensees, and their compliance with ongoing supervisory requirements.

IV. Legal Framework

52. The three principal laws from which the SCB derives its powers are the SIA, the IFA and the FCSPA. The SIA was brought into force on December 30, 2011. Subsequently, the Securities Industry Regulations (SIR) were also promulgated, effective January 9, 2012. This was the end result of an extended process (including public consultation) following recommendations by a technical assistance mission by the IMF in 2004 and the engagement of a consultant by the Caribbean Regional Technical Assistance Centre (CARTAC) to draft a new Act (and Regulations) to replace the 2009 Securities Industry Act and Regulations. Objectives included addressing the recommendations and becoming consistent with international best practice as codified by the IOSCO Objectives and Principles of Securities Regulation taking account of the size, scope and development of the securities markets in The Bahamas.

53. Work has begun on updating the IFA and its associated regulations with the same objectives. As an initial step, the provisions of the SIA that apply generally to the SCB and its powers to supervise the securities markets and their participants have been applied via provisions of the SIA to investment funds, fund administrators and fund managers. These include all the provisions on investigations, inspections and enforcement and the provision of assistance to other regulators. Although many requirements of the new Act became operational immediately, some changes were subject to transition periods of 6 or 12 months. The Act will become fully effective on December 31, 2012.

54. Investment activities and services to clients and dealing for own account can be carried on by banks (subsidiarization is not required), non-bank investment firms and insurance companies. The SCB licenses and regulates non-bank investment firms, banks, investment funds (collective investment schemes), investment fund administrators, BISX (the only stock exchange in The Bahamas) and clearing and settlement facilities for business carried on under the SIA and IFA. The CBoB licenses banks and supervises them from a prudential perspective. The Insurance Commission licenses insurance companies and supervises them from a prudential perspective. The SCB licenses and supervises banks and insurance companies for their conduct of investment services and activities. In licensing and supervising clearing and settlement facilities this function is shared with the CBoB, which is responsible for designating and supervising the payment system. Currently, there is no explicit legal underpinning of the CBoB’s oversight power over the securities settlement system. Prospectuses for new issues of securities must be approved by the SCB which also supervises and grants approval to takeover bids using its powers under the SIA. The SCB has an extensive range of sanctions available to it to deal with violations. Auditors are licensed by their professional body, The BICA under the Public Accountants Act 1991 and must be approved by the SCB in order to audit public issuers, firms licensed under the SIA and IFA, and exchanges and clearing facilities.

V. Market Structure

A. Market Intermediaries

55. At end-2011, there were 132 licensees under the SIA 1999 (now repealed), up 13.8 percent year-on-year. Of the 18 “full service” broker dealer licensees, 11 are bank and trust companies. 65 entities are licensed for dealing in securities, arranging deals in securities, managing securities and advising on securities. Under the SIA 1999, the boundaries between types of license were not sufficiently clear cut. This has been corrected in the new SIA and new function-based licenses are in the process of being issued to applicants and existing licensees.

56. 1 Data on securities business done with Bahamians in the Bahamas is presently not tracked, nor the degree of business conducted with clients outside of the jurisdiction.

B. Collective Investment Schemes

57. At end 2011 there were 713 investment funds licensed by or registered with the SCB; Total funds under management were B$ 86.81 billion. Overall the number of investment funds has declined significantly particularly for Recognized Foreign Funds (RFF); the exception is the Specific Mandate Alternative Regulatory Test Fund (SMART) fund category. The SMART fund structure was enabled in 2003 following passage of the IFA. The SCB has to approve the regulatory and operational mandate of a fund as set up by the operator to address the particular risks associated with that fund. There are no money market funds. The SCB has not defined a category of investment funds as hedge funds. Resident and non-resident ownership of investment funds is not tracked. A foreign fund is recognized (and registered as such by the SCB), if it has a nexus in The Bahamas (e.g., it is incorporated in the jurisdiction) and it is either listed on an overseas exchange prescribed by the SCB or licensed or registered in a jurisdiction which, in the view of the SCB provides equivalent regulation of funds. Currently, all RFFs are registered in the United States.

58. There are only three fund managers (that is entities responsible for making investment decisions and executing orders on behalf of the fund) located in The Bahamas. They manage twelve funds. The main business in The Bahamas is fund administration, with 65 firms being licensed to carry out this business (a range of functions intended to ensure that the operation of the investment fund are carried out in accordance with the investment fund’s offering memorandum and constitutive documents and the regulations to the exclusive interest of the investors).

C. Markets

59. Securities trading is extremely thin and has been declining since 2008. Exchange control regulations have restricted the scope of the BISX largely to domestic issuers and domestic investors. According to BISX, the retail investor base is no more than 20,000 (the population in The Bahamas is 345,000), and the maximum number of potentially active investors is no more than 5,000. BISX lists 25 securities, 19 common shares, 2 preference shares, and 4 debt issues. It also lists 20 investment funds. BISX is 46 percent owned by the Government of The Bahamas and has 5 broker-dealer members In The Bahamas all transactions in BISX listed securities must be put through the exchange. Average daily trading volume in 2011 was 11,451 shares; and average daily trading value was B$59,674. The benchmark BISX All-Share Index decreased by 8.9 percent in 2011extending 2010’s 4.2 percent decline and 2009’s decline of 8.58 percent. In 2011market capitalization fell by one percent to B$2.875 billion. Six of the 19 equity issuers are banks. One bank, First Caribbean Bank, accounts for 40 percent of market capitalization. The shares of five companies trade in the over-the-counter (OTC) market. There is also an active private placement market for preference shares, including perpetuals (preference shares with no end date), estimated at B$15–20 million per annum and a similar bilaterally negotiated market for commercial paper out to one year maturity.

VI. Preconditions for Effective Securities Regulations

60. The Bahamas is a stable democracy with an independent judiciary and a legal system based on English common law principles. Court judgments are decided primarily by precedents set by previous cases. It has well qualified and professional legal and accountancy professionals and in the case of the latter requires them to use and comply with the global standards for accounting and auditing, IFRS and International Standards on Auditing (ISA) although enforcement appears weak. There has been extensive case law developed on directors’ liabilities in recent years. The impact of bankruptcy law on the protection of segregated client assets in the event of a bankruptcy of a licensed firm or custodian is untested. The SCB has published for consultation a Code of Corporate Governance based on the Organization for Economic Cooperation and Development (OECD) Principles. The CBoB has already established Corporate Governance Guidelines for banks. The State encourages new entrants to its securities and investment fund industries, is committed to meeting internationally recognized standards of regulation in banking, securities and insurance and seeks to ensure that regulatory costs are proportionate are fairly distributed.

VII. Main Findings

61. Principles relating to the regulator: The SCB has sole responsibility for regulation of securities markets and the investment fund industry in The Bahamas. Banks are able to carry on investment business without subsidiarization on the basis of a license issued by the SCB. SCB will take into account the views of the CBoB when considering an application but the decision to grant or reject is for the SCB alone. As a matter of administrative policy the SCB permits banks with securities licenses to operate under the regulatory capital rules of the CBoB. This approach is supported by cooperative arrangements between the SCB and the CBoB including the carrying out of joint inspections. Cooperation and communication is further facilitated via the GFSR which comprises the CBoB, the SCB, the Inspector of Financial and Corporate Services (the functions of which are carried out by the SCB), the ICB and the Compliance Commission. The SCB is independent of Government under the law, although its current reliance to a considerable degree on government funding has resulted in some volatility in income. This is being addressed. The SCB has a wide set of powers, in the use of which it is properly accountable. In order to translate the powers given to it under the SIA into a practical regulatory methodology and to improve standards among securities market participants and public issuers, the SCB is undertaking a very extensive and demanding program of public consultation on numerous initiatives. The SCB is at an early stage in developing an approach to deal with systemic risk and is participating in the work of the CBoB in this area. No organization has formal Self Regulatory Organization (SRO) status in The Bahamas. The BISX is licensed by and subject to the oversight of the SCB.

62. Principles for the enforcement of securities regulation: The SCB has broad powers of inspection, investigation and surveillance under the SIA. These sections of the SIA, which came into force in December 2011, also apply to licensees under the IFA. The equivalent sections of the IFA and the Investment Funds Regulations 2003 (IFR) have been disapplied. The SCB’s administrative and civil powers and sanctions as set out in the SIA are effective, proportionate and dissuasive. Weaknesses exist in the supervision of participants in the investment funds sector.

63. Principles for cooperation in regulation: The SIA gives the SCB broad authority to exercise its powers to assist both domestic and foreign regulatory authorities in the performance of their regulatory functions. The SCB appears able and willing to offer effective and timely assistance to foreign regulators in obtaining information and in responding to other requests based on its internal organization and its stated commitment to prioritize requests for information from foreign regulators. It is currently (October 2012) a B-list signatory to the MMoU but expects to become an A-list signatory in December 2012.

64. Principles for issuers: The imposition of the draft Takeover Code by the SCB, as enabled by the SIA, will close a significant gap in corporate legislation in The Bahamas while the introduction and enforcement of the Corporate Governance Code by the SCB should make a positive contribution to shareholder rights and increase the awareness of directors as to their duties and liabilities. IFRS are used unmodified and de facto are updated as the International Accounting Standards Board (IASB) produces changes without the need for intervention by the accountants’ professional body, BICA.

65. Principles for auditors, credit rating agencies and other information service providers: These principles were not benchmarked. As regards auditors, while they are required to adhere to the standards of the international standard setting body International Federation of Accountants (IFAC), there is no body acting in the public interest which oversees the work of auditors or their professional body, BICA. There is no peer preview process (though BICA has one in the planning stage) and BICA’s powers to discipline its members are limited. As regards credit rating agencies, banks are able to use external ratings when calculating capital charges under the CBoB’s market and credit risk rules; SCB proposes to permit their use by non-banks in the Specific Risk Factor of the Market Risk Requirement as set out in its draft regulatory capital rule. However, no Credit Rating Agencies (CRAs) are located in The Bahamas. As regards other information service providers there are only very limited analytical or evaluative services offered to investors and the current level of oversight is probably appropriate.

66. Principles for collective investment schemes: The current governing Act, the IFA, which was introduced in 2003, is no longer sufficient to match good practice as set out in the IOSCO Principles. It does not give the SCB sufficient powers to mandate certain actions and to encourage high standards among managers, operators and custodians as has become the norm. However, under the existing law the SCB could be more proactive in supervising those fund managers, operators and custodians that are located in The Bahamas.

67. Principles for market intermediaries: The SIA provides a function-based approach to licensing which removes the ambiguities in the previous Act as to which activities a firm was legally able to carry on under a particular class of license. The draft regulatory capital rule will bring consistency of treatment between banks and non-banks licensed to carry on securities business. Periodic on-site examinations appear to be comprehensive, tailored to match the business models of particular categories of licensees and require the exercise of judgment by examiners. The SCB has begun to develop a risk based approach to prioritize its inspection program.

68. Principles for secondary markets: The securities market is small, non-complex, and illiquid. Short selling does not appear to take place. Settlement of securities takes place at the Bahamas Central Securities Depository, which is the register of listed corporate shares, in a dematerialized manner, while settlement of funds is achieved bilaterally by brokers providing cheques in the offices of BISX. The SCB has adequate powers over the exchange and the licensing process appears comprehensive and sufficient. The transparency of trading on BISX should be improved. While the number of cases of market manipulation and similar abuses are very low there appears to be no reluctance on the part of the SCB to take administrative action or on the part of the Office of the Attorney General to take criminal action when wrong-doing is suspected.

Annex Table 5.

The Bahamas: Summary Implementation of the IOSCO Principles

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Annex Table 6.

The Bahamas: Recommended Action Plan to Improve Implementation of the IOSCO Principles

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VIII. Authorities’ Response to the Assessment

69. The SCB is satisfied with the quality of the review undertaken by the Assessors and is in agreement with the overall assessment. Mr. Britton’s patience and candour during the assessment and the level of professionalism exhibited, are greatly appreciated.

70. Subsequent to the visit, the SCB has implemented some aspects of the recommended changes. With respect to Principle 12, 24, and 25, where the Assessor notes that related parties such as managers/ advisors and custodians of investment funds should be subjected to greater oversight, the SCB has instituted, starting August 1, 2012, onsite inspections of domestic mangers/advisors and custodians. Additionally, the corporate governance paper, which is out for consultation, has been amended to set governance standards for CISs.

71. Similarly, with respect to Principle 35, the SCB, while noting that trading activity in the jurisdiction is weak, accepts the view that trading data should be published more frequently and has directed the BISX to have trade details publicly available within 15 minutes of the trade.

72. The SCB has also begun talks with key stakeholders to advance the weakness noted with respect to principles 18, 19, and 21. The concerns raised about the weaknesses in the Funds legislation were already on the SCB’s radar prior to the visit. In August, the SCB established an IFA review team, comprised of industry participants, to provide input and guidance on the industry’s perspective about the required changes. Work has also continued on a number of projects initiated prior to the FSAP assessment, including the BISX oversight program, the guidance on asset valuation and the crisis management plan for SCB constituents.

73. The SCB has reviewed the recommendations and have embarked on a two-to-three year project to implement changes which should lead to full compliance with all of IOSCO’s principles. Key projects being undertaken include, inter alia:

  • finalizing all rules, guidelines and surveillance programs required for the full implementation of the SIA 2011, including disciplinary rules, takeover codes, corporate governance, regulatory capital, fees, liquidity and large and related party exposures rules, re-categorization of licenses and revamping of internal procedures;

  • working with other regulators, the Ministry of Finance and the Office of the Attorney General (OAG) to develop a crisis management plan for the jurisdiction. A crisis management seminar with a simulation exercise is scheduled for October 31, 2012;

  • developing a full oversight program for BISX with detailed requirements which exceed those required of other licensees and ensures that the confidentiality requirements are in line with what would be required of a regulatory institution;

  • establishing an oversight body for the Accounting community;

  • repealing and replacing the legislation governing the investment funds industry and implementing the relevant oversight programs;

  • finalizing database projects targeted to improve efficiency and effectiveness with respect to the oversight of licensees/registrants;

  • working with the CBoB with respect to the creation of systems for clearing and settlements that are congruous, so that the requirements for securities settlements are met; and

  • formally recognize those credit rating agencies to be used for the calculation of market risk in the regulatory capital methodology, identifying the underlying standards required for their recognition.

Annex IV: The Bahamas: Exchange and Capital Controls

74. Bona fide current account transactions in The Bahamas are liberalized and largely delegated to be transacted, within generous limits, by commercial banks against proper documentation. These include payments for personal and business travel, imports and credit cards, and for sundry payments (such as advertising professional service charges, educational and medical expenses, etc.).

75. The CBoB maintains restrictions on capital flows in order to ensure monetary and financial stability and manage pressures on the peg. There are two exchange markets: the official exchange market and the investment currency market, with the latter currently requiring a premium of 12.5 percent over the official exchange rate for outward payments and providing a premium of 10 percent for the repatriation of the originally approved capital investment.2 The repatriation back to The Bahamas of income and capital gains over and above the initial investment amount must be converted at the official rate.

Capital and money market instruments
  • All outward capital transfers require exchange control approval, and outflows of resident-owned capital are restricted. Inward transfers by non-residents must be processed through the exchange control approval procedure.

Shares or other securities
  • Outward investments by residents require permission from the CBoB, and they are normally processed through the investment currency market. Pension funds, including the National Insurance Board (NIB), require CBoB approval to invest in securities issued by non-residents or in an investment portfolio held abroad (see below).

  • Inward investment by non-residents is unrestricted in size, but CBoB approval is required for the issue or transfer of shares or control in a Bahamian company to a nonresident. Investments in equities of companies listed on The BISX are restricted to a limit of 10 percent of the issue or offering for each investing entity. Cross listing of Bahamian and foreign companies on CARICOM stock exchanges is allowed, subject to specified limits.

Controls of credit operations
  • Resident banks and other lenders must have permission to extend loans in Bahamian dollars to any corporate body controlled by non-residents. Resident companies wholly owned by non-residents are not allowed to raise fixed capital in Bahamian dollars, although those partially owned by residents may borrow in Bahamian dollars for fixed capital purposes to the extent of their resident ownership. Resident companies set up by non-residents are not normally permitted to participate in the wholesale/retail distribution sector.

  • Residents other than authorized banks must obtain permission to borrow foreign currency from non-residents or to service foreign currency loans by converting Bahamian dollars. Exchange control approval is required if local real estate is offered as collateral.

  • Commercial banks and other credit institutions require exchange control approval to make loans to residents in foreign currency, or to extend loans to non-residents using local real estate as collateral.

Direct investment
  • Inward direct investment requires CBoB approval. Regarding outward direct investments for residents, the use of the official exchange market is limited to US$1 million per person or entity, with an overall limit of US$5 million per transaction, every three years, in cases which are judged as special criterion, i.e.,— ventures that promise positive returns to the Balance of Payments within a reasonable time-frame (e.g., three years). While the Central Bank may, at its discretion grant approval for amounts in excess of the allowable limit all other outward direct investments must be funded through the Investment Currency Market or combination of funding, e.g., foreign currency borrowing.

  • Recognizing the desirability to provide diversification opportunities for the NIB’s investments portfolio, the NIB is permitted to make overseas investments of up to US$25 million per year at the official exchange rate. Bahamian employees of foreign-owned institutions in The Bahamas may invest up to US$25,000 per year at the official exchange rate in the shares of their employer as part of an employer-provided benefits program (“employee stock options”), subject to CBoB approval. Amounts above this limit would need to be transacted through the investment currency market.

Real estate
  • Residents require approval from the CBoB to buy property abroad and face the premium of 12.5 percent on approved purchases. However, residents are permitted, once every ten years, to make an investment of US$25,000 at the official exchange rate for the purposes of purchasing a timeshare real estate property interest. Amounts above US$25,000 would need to be transacted through the investment currency market. Non-residents intending to purchase land for commercial purposes or property larger than five acres must obtain a permit from the Investments Board. Non-residents intending to buy properties for residential purposes need to obtain a certificate of registration from the Investments Board on completion of the transaction.

  • Remittance abroad of the proceeds of sale of properties in The Bahamas by non-residents requires approval from the CBoB. On completion of the real estate transaction and on presentation of the required permits and registration documents, the CBoB issues an “Approved Investment Status” certificate to non-residents for their real estate investment in The Bahamas, which provides them with the assurance that when they wish to sell their property, they will be able to repatriate all the funds (including capital gains) at the official exchange rate.


Bahamians taking permanent residency abroad are allowed to transfer abroad US$250,000 per family per year at the official exchange rate, subject to CBoB approval. Amounts above these annual limits would need to be transacted through the investment currency market or may otherwise be permitted at the Bank’s discretion.


Equivalent to two months of imports of goods and services. Gross international reserves covered 100.4 percent of reserve money at end-2011, well above the required legal minimum of 50 percent.


The Bahamian dollar (B$) has been set at parity with the U.S. dollar since 1970. See Annex IV for a detailed description of exchange and capital controls in The Bahamas.


Reserve requirements have been unchanged for decades and the CBoB has not used direct credit controls on banks since August 2004.


Based on the BIS International Banking Statistics (as of December 2011), The Bahamas is the fourth largest OFC by assets after the Cayman Islands, Hong Kong SAR, and Singapore.


There is a multiplicity of types of licenses for banking institutions. 8 Authorized Dealers (commercial banks) carry on business in The Bahamas and deal in Bahamian dollars. 83 Non-Resident Banks operating under public licenses are mainly subsidiaries and branches of international banks and carry on offshore activities only, including trust services, wealth management and group treasury activities. 4 Restricted License Banks carry on business only with specified persons. 10 Authorized Agents have only a limited presence in The Bahamas and are managed by a resident bank in The Bahamas. 6 Non-Active banks are in the course of voluntary wind-up.


The main sources of government revenues from the financial sector are stamp taxes, license and registration fees and work permit fees for non-Bahamian residents.


Offshore banks do not conduct business with Bahamian residents, but they can provide mortgages to non-residents that wish to purchase residential real estate in The Bahamas.


The current limit on net FX open positions for onshore commercial banks is the lower of 5 percent of Tier 1 capital or US$5 million.


The onshore entity has a net exposure to these two affiliates that has averaged 5.5 percent of its total assets over Q1 2006 through Q1 2012.


Two of the onshore commercial bank subsidiaries of foreign banks have partial listings on the BISX, and all three indigenous banks are also listed.


The only category registering an increase in the number of funds was SMART funds, which typically target a small number of investors.


Liquidity management is centralized at the regional/global level and managed from outside the jurisdiction.


Such tax advantages do not apply for institutions whose parents are in jurisdictions that apply taxes on a consolidated global basis.


A lack of bank specific balance sheet data prevents the computation of FSIs on offshore banks.


A breach of the 17 percent target ratio results in discussions with the CBoB to develop a plan to restore capital, while a breach of the 14 percent trigger ratio would result in the CBoB taking enforcement actions on the bank to restrict lending/asset growth until capital is restored.


A couple of banks have some preference share capital but the CBoB has instructed them to phase this out in anticipation of the adoption of Basel III.


One of the onshore commercial banks is a foreign branch that operates mainly offshore and was excluded from participation in the exercise because as a branch, it has no required delegated capital.


In the worst-case scenario aggregate NPLs reach 25 percent of total loans and represent a substantial drag on profits through reduced net interest income and increased provisions. Therefore, this scenario has a considerable impact on banks’ capital.


The systemic potential of individual bank problems is contained by the low level of interbank exposures.


Haircuts of up to 60 percent were applied on collateral given the degree of uncertainty about housing prices and banks were assumed to retain 50 percent of projected profits. However, a regulatory restriction forbidding any dividend payments was assumed for medium and severe shocks.


Insurance standards were not assessed in the 2004 assessment.


The CBoB requires a one percent general reserve in addition to specific provisions.


Trust companies are largely engaged in asset and wealth management activities, although many banks also undertake trust business.


The CBoB participates in a number of regulatory colleges on a regular basis, notably those convened by Canadian authorities. Colleges cover both thematic reviews (including on crisis management principles) as well as reviewing specific financial institutions.


Under exchange control regulations, individuals and companies designated resident for exchange control purposes must, with some exceptions, hold their deposits in Bahamian Dollars.


The Credit Union League, which is the Apex body for credit unions, currently administers a stabilization fund for the purpose of protecting credit union depositors. Every credit union contributes to this fund on an annual basis. The Credit Union League also has retained earnings which may be used to cover deposits in the event of a crisis.


Issues to be addressed should include the objective of assistance, eligibility, collateral, interest rates, transparency, and other conditions for assistance.


The Finance Minister and Governor of the CBoB meet regularly to discuss matters of import, including any crisis management and safety net issues.


In international practice, designation as a systemically important financial institution (SIFI) within a particular financial system indicates that the failure or disruption of the institution could threaten the stability of the financial system. A small subset of institutions is typically designated as SIFIs based on characteristics such as size, interconnectedness, substitutability, or other measurable criteria.


For instance, limitations should be placed on which types of institutions (e.g., the acquiring institution rather than the failing institution) and under which circumstances (e.g., only when an institution is of systemic importance) solvency support would be provided. Additionally, procedures should be developed to address the parameters under which financial assistance would be provided.


The system was created after the 1997 failure of Gulf Union Bank, to whose depositors coverage was retroactively applied.


Only the CBoB has power to appoint a receiver or receiver manager of an offshore financial institution.


This accounts for the discrepancy in numbers and types of licenses.


The current so-called premium bid and offer rates of 12.5 percent and 10 percent have been in effect since January 2006, when they were reduced from their previous levels of 25 percent and 20 percent, respectively.