**International Monetary Fund**

**Country Assessment**

The Bahamas has made very substantial progress towards the development of an effective regulatory regime over the past two years according to the International Monetary Fund (IMF) in a just-released report titled *”The Bahamas: Assessment of the Supervision and Regulation of the Financial Sector – Review of Financial Sector Regulation and Supervision”*.

The IMF report states that this progress is not only reflected in the body of legislation that has been enacted since December 2000, but also in the structural and operational arrangements put in place by the agencies that have been entrusted with supervisory responsibilities.

The Central Bank of The Bahamas and the Securities Commission of The Bahamas were both given high marks by the IMF, primarily owing to their strong leadership and professional, dedicated staff. *”This process has placed a considerable burden on both the agencies themselves and on the private sector institutions that they regulate,”* the report states.

The IMF notes that the majority of this transformation appeared to have been completed at the time of their review in 2002 while work continues in several areas that remain under examination and development in the jurisdiction.

The objective of the IMF report was to assess the extent to which the regulatory and supervisory arrangements in The Bahamas complied with certain internationally accepted standards and measures of good practice. The scope of the assessment included the banking, securities, trust and company service sectors.

The IMF report provides a summary of recommendations to be considered, with the principal observation relating to the streamlining of the regulatory environment, a matter that is being actively pursued by the Ministry of Finance in its examination to determine the best model for the country’s regulatory structure.

The report recommends *”a consolidation of the reporting lines for regulatory authorities under the Ministry of Finance”* and completion of a *”comprehensive review of the overall regulatory framework to determine the most efficient structure for the local environment.”*

Both of these recommendations have been under active consideration in The Bahamas since the introduction of the robust legislative program in 2000. Both the IMF and policymakers in The Bahamas are in agreement that overall regulatory structure is complex, notwithstanding the agreements amongst the regulatory agencies to rationalize the processes as far as possible.

*”The report reinforces the view that The Bahamas is a well-regulated jurisdiction and leading international financial centre in banking, private banking and asset management.”* said Bruno Roberts, Chairman, Bahamas Financial Services Board.

Wendy Warren, Executive Director, notes that *”BFSB is pleased that the hard work of The Bahamas government, regulators and industry participants has been recognized and validated by an independent agency such as the IMF.”* She further noted that {*I}”BFSB will continue to work alongside government and regulators to support the required steps to expand opportunities for growth in the sector through an appropriate regulatory regime.”*