banks, the majority of which are subsidiaries of large internationally active groups. In general, their investment activity is conservative, thus entailing limited risks. Nevertheless, financial market turmoil may heighten challenges for the Monegasque banks, especially if serious difficulties were to emerge at a parent institution. The main author of this AFSSR is Mr. Giustiniani, with contributions from the rest of the OFC Program Update team. The AFSSR is a summary report on implementation of the indicated financial sector regulatory standards. It has been
economy, the depth of the Monegasque financial sector is only a fraction of that seen in other OFCs ( Figure 2 ). Figure 2. Monaco: Financial Sector Depth in Selecetd OFCs; 2006 (Total assets in percent of GDP) 10. Financial intermediation is dominated by the banking sector . Private banking and asset management are the main services offered by Monegasque banks, which hold the lion’s share of the financial sector’s total assets ( Table 1 ). 8 Monegasque banks are controlled by foreign groups headquartered mainly in France, Switzerland, Italy, and the UK
as safety and soundness concerns; and legal protection for supervisors. Arrangements for sharing information between supervisors and protecting the confidentiality of such information should be in place. Principle 1(6) Arrangements for sharing information between supervisors and protecting the confidentiality of such information should be in place. Description Considerable progress has been made to improve international cooperation among banking supervisors and to increase the ability of Monegasque banks to provide information to their parent
of the information. 13 44. The need for consolidated supervision and monitoring in banking was recognized in SO No. 14.892 of May 2001. The SO confirms the exchange of letters dated April 6, 2001, between Monaco and France agreeing that Monegasque banks can transmit to their parent institutions all information required by the foreign supervisor for consolidated supervision. The SO also allows the FCB to carry out onsite examinations in Monegasque banks on behalf of foreign supervisory authorities. Such examinations, begun in 2001 and conducted in cooperation with
, banking and balance of payments statistics include Monegasque data. The agreement also stipulates that the EU legal framework governing the activities of banks applies to Monaco, ensuring the principle of a level playing-field in the sector. However, legislative provisions concerning, for example, criminal matters, which are specific to France and do not specifically concern credit institutions, are not applicable in Monaco, which has its own laws in these areas. Hence, Monegasque banks are subject to Monegasque AML/CFT legislation (ECB, 2006 , and IMF Country Report