The Financial Stability Forum (FSF) met on 24-25 March in Berlin, focusing on (a) a review of potential vulnerabilities in the international financial system and (b) progress made in addressing weaknesses in market foundations. (see link below)

The Financial Stability Forum (FSF) promotes international financial stability through information exchange and international co-operation in financial supervision and surveillance. It brings together, on a regular basis, national authorities responsible for financial stability in significant international financial centres, international financial institutions, sector-specific international groupings of regulators and supervisors, and committees of central bank experts.

The FSF seeks to co-ordinate the efforts of these various bodies in order to promote international financial stability, improve the functioning of markets, and reduce systemic risk.

**Offshore Financial Centres**

Offshore financial centres (OFCs) were discussed at last week’s meeting, in relation to the importance of *”bringing their supervisory, regulatory, information sharing and cooperation practices up to international standards”*.

Recognising that resource limitations can constrain implementation of standards, the FSF called on its members to strengthen the provision of technical assistance to promote further progress by OFCs.

The FSF welcomed the significant advances achieved in the International Monetary Fund’s assessment program. It called on those jurisdictions that have requested assessments of observance of standards under the IMF’s Module 2 or the Financial Sector Assessment Programme (FSAP), and those whose assessments are underway to make public the results of these assessments when they have been completed, along with action plans to implement recommendations. This grouping includes Antigua and Barbuda, Bahrain, The Bahamas, Bermuda, Cayman Islands, Cook Islands, Guernsey, Isle of Man, Jersey, Malta, Mauritius, Nauru, Niue, St Kitts and Nevis, St Lucia, St Vincent and the Grenadines, and The Turks and Caicos.

The FSAP is a joint IMF and World Bank effort introduced in 1999, also aimed at increasing the effectiveness of efforts to promote “the soundness of financial systems” in member countries.

The IMF’s Offshore Financial Center (OFC) Program was initiated in 2000 and is now well advanced. It serves to provide an overview of financial regulation and supervision, and of arrangements to counter money laundering and the financing of terrorism in the jurisdictions. (see link to March 2003 Progress Report below)

IMF’s Executive Board is expected to assess its OFC program in August 2003, while indications are that the FSF will assess the overall effectiveness of its own OFC initiative in September 2003. In any event, the Forum meets next on 9-10 September, in Paris.