The completion of the detailed assessment serves several purposes. First, it benchmarks the current state of banking supervision, recognizing that there have been extensive changes in the last 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. The assessment of the effectiveness of banking supervision was based on a review of the legal framework.
The financial services sector plays a dominant role in the economy of Guernsey. The report is organized in two volumes. Volume I provides the findings and the Reports on the Observance of Standards and Codes (ROSCs). Volume II provides the detailed assessments of the Basel Core Principles for Effective Banking Supervision, the insurance core principles, the objectives and principles of securities regulation, and the financial action task force recommendations, as well as a review against the Offshore Group of Banking Supervisors (OGBS) statement of best practice for trust and company service providers.
general character concerning the policies to be followed.
14. At the time of the assessment, the GFSC’s affairs were directed by a board of five members, of whom the chairman was the president of the Advisory and Finance Committee. The president of the Advisory and Finance Committee was required to be chairman of the GFSC. The 2002 amendment to the GFSCLaw, the final provisions of which came into effect in February 2003, provides that it is no longer necessary for the chairman to hold political office. The four other members are selected by parliament for terms of
Financing Of Terrorism
Generally Accepted Accounting Principles
Generally Accepted Auditing Standards
Guernsey Financial Services Commission
GFSCLaw Financial Services Commission (Bailiwick of Guernsey) Law, 1987, as amended
International Association of Insurance Supervisors
Insurance Business (Bailiwick of Guernsey) Law, 2002
Insurance Managers and Insurance Intermediaries (Bailiwick of Guernsey) Law, 2002
the functions and independence of the GFSC;
resources devoted by the GFSC to bank supervision;
certain supervisory and regulatory arrangements in banking and securities; and
the AML/CFT legal framework, the coverage of guidance notes, and communication of some policies.
The authorities are, therefore, encouraged to take actions in the following areas: 2
enhance the independence of the regulator;
the GFSCLaw should establish safety, soundness, and integrity of the financial system as the objectives of the GFSC and eliminate “development
responsible for banking supervision. The responsibilities are divided into “general functions and statutory functions.” These are set out respectively in sections 2 and 3 of the GFSCLaw. The general functions of the GFSC include: to take such steps as it considers necessary or expedient for development and effective supervision of finance business in the Bailiwick; to provide for the Advisory and Finance Committee or the Policy and Finance Committee of the States of Alderney or the General Purposes and Finance Committee of the Chief Pleas of Sark, when either of such
Guernsey’s status as the largest international insurance center in Europe hinges on its progressive infrastructure and operational flexibility. Guernsey updates its regulatory regime continually and has implemented all the recommendations arising from the 2003 Offshore Financial Center (OFC) assessment. The updated regulatory framework has a high level of observance with the Insurance Core Principles (ICPs). The Guernsey Financial Services Commission (GFSC) should expand its range of enforcement powers and also implement the public disclosure standards established by the International Association of Insurance Supervisors (IAIS). The mission advised the GFSC to continually assess the practical implementation of Own Solvency Capital Assessment (OSCA).
an Insurance Supervisor
In order to strengthen the operational independence of GFSC, the mission recommends that GFSCLaw be amended to remove the power of the Advisory and Finance Committee to provide guidance and direction to GFSC. The GFSCLaw should establish safety, soundness, and integrity of the financial system as the objectives of GFSC, and eliminate “development” as one of the GFSC functions. Further, there should be no provisions in the Law that could potentially compromise the above-stated objectives. This would provide a clear legal framework that