(Excerpt from an address by the Hon. William C. Allen, Minister of Finance, to the 4th Annual Roundtable Meeting of the Council of Securities Regulators of the Americas – COSRA)

The Bahamian economy is predominantly engaged in the provision of international services – tourism, finance, transshipping, etc. Through the promotion of itself as an international services center, The Bahamas has had considerable success as a developing nation. The level of unemployment is estimated to be about 7% and falling; the rate of inflation is estimated at about 2%, per capita income is the third highest of independent countries in the hemisphere, following that of the USA and Canada and the recurrent budget was in balance in the last fiscal year.

The Bahamas today is a thriving international financial centre, with more than 700 international mutual funds with a net asset value of more than US$100 billion administered in the jurisdiction, and home to some of the world’s leading banks. Economic stability and a strong partnership between the government and the constituents of the financial services sector contribute to this success.

With more than 4000 persons employed in the financial services sector and the need to retain the confidence of the world’s most respected banks and other financial services providers, it is imperative that every effort is made to establish a regulatory regime that conforms to the highest international standards and best practices.

The Bahamas has been a leader and pioneer in the international financial services industry because of its ability to respond appropriately to both opportunities and challenges as they have emerged over the years. It is in this same tradition that The Bahamas has responded to the challenges of the recent international financial initiatives from the Financial Stability Forum and the Financial Action Task Force which clearly demonstrated that major improvements were required in its legislative regime as in that of may other financial centers.

Our response was prompt and comprehensive where the need was clear and unambiguous. In fact, The Bahamas had already begun to review its regulatory regime independently of the external pressure, although I have to say that the pressure produced faster results. I still do not think the pressure was either necessary or even-handed, however. In keeping with its commitment to strengthen the Bahamian economy by maintaining the global competitiveness of the Bahamas financial services sector, The Government moved resolutely to respond to what it recognized as a legitimate concern about the conduct of financial and quasi-financial institutions operating within its jurisdiction. In the end, the jurisdiction will be more respected, its future more secure.

The Government has also committed to have The Bahamas’ financial sector undergo the IMF/World Bank Financial Sector Assessment Programme (FSAP) and a programme is already underway to prepare the sector for the review following a self -assessment.

March 1, 2001