system of banking supervision in the BVI provides the FSC with clear responsibilities and objectives. The FSC has all necessary autonomy, powers, and resources to be an effective banking supervisor with the exceptions as specified in Principles 1 (2) and 1 (5) below. Principle 1 (2) deals with the terms of appointment of the Managing Director and Principle 1 (5) relates to the fact that there is no explicit legal provision for the reimbursement to FSCstaff for costs incurred in defending their actions and/or omissions in performing their duties in good faith
level of expertise available to the FSC is considered inadequate in view of the overall experience level relative to the challenges facing the FSC. Staff resources devoted to the supervision of licensed financial institutions have been set at five, comprised of a Commissioner, a Deputy Commissioner, a Senior Supervisor, and two junior supervisors. The challenges in developing a vigorous and competent bank supervisory agency literally from inception are severe enough without the difficulties posed by lack of experienced staff. Of the staff members, only the
This assessment of the Basel Core Principles for Effective Banking Supervision has been completed as part of the IMF Offshore Financial Center (OFC) assessment program. First, the assessment benchmarks the current state of banking supervision, recognizing that there have been extensive changes in the last few years. Second, it suggests a number of further improvements or changes. Thus, this report provides a key input for the development of an action plan to move toward full compliance with the Core Principles.
established an on-site visitation program that is reflective of the risk profile of their banks. The visitation objective is designed to ensure that all banks are visited at least within three years. Extrapolating the numbers of person days for scheduled on and off-site supervision estimated by the Supervision Division suggests that there will be a significant shortfall. Other issues that will have an impact on the effectiveness of the Supervision Division include: • In general, the industry feedback concerning the quality of FSCstaff was positive although some concerns
Commissioners is non-executive, with its activities limited to creating and appointing senior management (except for the managing director (MD)), establishing the general policy of the FSC and monitoring and overseeing policy implementation, including management of the FSC by MD. The MD is generally responsible for the operations of the FSC, creates and appoints FSCstaff, subject to board approval, and coordinates and executes requests for assistance from foreign regulatory bodies.
36. The Board is appointed by the Executive Council for a period not exceeding three years
as well as the statutory review published in January 2005. This review assessed regulation and supervision in terms of compliance with European Union (EU) legislation and the extent to which FSC practices match those of the U.K. supervisory authorities as required by the FSCO. The FSCstaff also prepared a self-assessment of compliance with the BCP. The assessors met the Chief Minister, the Director of the Finance Centre, bankers, and external auditors as well as many of the staff of the FSC.
3. The assessment of observance of each of the Core Principles (CP
operational and reputational risks. A regulatory inspection tool developed by KPMG—KReview—is currently used by the Banking and Fiduciary Services Division and Insurance Division. KReview represents a range of automated supervisory support tools to assist the FSCstaff to undertake an effective and detailed on-site inspection. A centralized and automated system to follow up on inspection recommendations should also be developed.
21. The on-site inspection process began in 2004 for most Divisions. Inspections commenced in 2008 for the Investment Business Division. All
Gibraltar’s Detailed Assessment Report of the Observance of the Basel Core Principles is examined. The principal risks are reputational risk, both for the Gibraltar authorities and for the banks, as the bulk of the assets managed are off the balance sheet with the investment risk carried by the client. Credit risk is largely limited to residential mortgage lending and is heightened by the rapid rise in prices both in Southern Spain and in Gibraltar itself.
The financial regulatory and supervisory system of the Isle of Man complies well with the assessed international standards. Volume I of this report provides an overview and summary findings. Volume II provides the detailed findings of the assessments of compliance with the Basel Core Principles for Effective Banking Supervision (BCP); the Insurance Core Principles of the International Association of Insurance Supervisors (IAIS); and the Objectives and Principles of Securities Regulation of the International Organization of Securities Commissions (IOSCO).
This paper focuses on financial regulatory policies and stability. The British Virgin Islands (BVI) provides administrative, audit, and legal services to international business companies, which is another key component of the economy. Developments in the financial sector and regulatory framework warrant an update of the assessment conducted under the IMF’s Offshore Financial Center (OFC) program. Financial Services Commission Act (FSCA) provides the Financial Services Commission (FSC) with a wide array of specific regulatory, supervisory, and enforcement powers. The banking system has been insulated from global financial shocks. Many critical elements develop a robust and proportionate crisis management framework.