The Government of The Bahamas has asked the International Monetary Fund (IMF) to conduct an assessment of its financial services sector, and plans to make the results of the review public.
The IMF has indicated its agreement, with the assessment to be scheduled early in 2001.
This step is in line with earlier calls by the Financial Stability Forum (FSF) for independent reviews of offshore financial centres, as a means of enabling such centres to understand where improvements are necessary. The FSF, which ranks offshore financial centres according to what it perceives as the “risk to global financial stability” recently announced that it welcomes the steps by various OFCs to improve supervisory, regulatory, co-operation and exchange policies and practices — but encourages them to undertake external assessments of their “observance with relevant international standards”. Further, the FSF has encouraged OFCs to disclose assessment findings as a means of demonstrating progress towards meeting such standards.
In an earlier release on planned assessments of various jurisdictions, the IMF indicated that the process will be flexible, depending on the financial services provided, and on the nature of the risks and vulnerabilities. Focussing on banking, insurance and securities “to help identify vulnerabilities in the financial system”, the assessments will be cooperative. That is, the IMF will ensure that OFCs have greater ownership, and part of its strategy will include a self-assessment provided by each nation.
Speaking from Europe as the Bahamas delegation concludes its series of meetings with G-7 country representatives and private institutions, the Prime Minister pointed out that The Bahamas is set to comply with the steps outlined by the FSF. Prime Minister Ingraham further indicated that any recommendations made by the IMF as a result of its assessment would be adopted, for further enhancement of the sector, so as to “remove any question of the adequacy of its regulation and supervision”. He also confirmed that various components of the well-developed plan of action devised by The Bahamas are being “positively received” by the OECD and its affiliates, as well as by the head offices of the major financial institutions licensed to operate from The Bahamas. The Bahamas recently was included in a list of seven countries commended by the Financial Action Task Force (FATF), for progress made, with indications that “the steps taken are very encouraging because in many instances the responses have been very rapid”.