are being coordinated with mutual evaluations conducted by FATF and FATF-style regional bodies. Several jurisdictions asked to postpone assessments, so that they may continue to focus on enhancing their supervisory arrangements.
Technical assistance has been provided mostly to small, lower-income jurisdictions in banking and insurance supervision, AML/CFT legislation and supervision, and statistics.
While significant progress has been made on implementing the informationframeworkinitiative, the success of the initiative will depend on the number of
in February 2005. Section III focuses on the transparency and monitoring targeted by the informationframeworkinitiative. Section IV describes themes emerging in collaboration and discussion with standard setters and supervisors. Appendices I and II provide the implementation status of assessments in the first and second phase of the program, respectively. Appendix III briefly reviews the data that has been received thus far under the informationframeworkinitiative.
II. Second Phase Of The Program: Monitoring And Technical Assistance 1
3. In November
This paper updates Executive Directors on the progress since February 2005 in implementing the second phase of the offshore financial center (OFC) program as agreed in November 2003 (see PIN No. 03/138 at http://www.imf.org). At that time, Directors recognized that OFCs could pose prudential and financial integrity risks to the international financial system. In this context, Directors agreed that the monitoring of OFCs' activities and their compliance with supervisory and integrity standards should become a standard component of the financial sector work of the Fund. They also requested periodic updates on the progress with implementation of the program. Earlier updates were provided in March 2004 (Offshore Financial Centers—The Assessment Program—An Update) and February 2005 (Offshore Financial Centers—The Assessment Program—A Progress Report). With the completion of the first round of assessments, staff have begun implementing the second phase of the program.
Front Matter Page INTERNATIONAL MONETARY FUND
Offshore Financial Centers Report on the Assessment Program and Proposal for Integration with the Financial Sector Assessment Program
Prepared by the Monetary and Capital Markets Department
(In consultation with Other Departments)
Approved by Jaime Caruana
May 8, 2008
C. Data Issues
D. Next Steps
1. Status of Participation in the InformationFrameworkInitiative
financial information has been further enhanced, including through participation in the IMF InformationFrameworkInitiative. Going forward, the conduct of supervision will need to evolve from one of compliance towards a more risk focused approach. This would also be in line with the risk focused regulations and guidelines issued recently.
Notwithstanding, legal shortcomings in the operational independence of the Monetary Authority of Macao (AMCM) as financial regulator have yet to be addressed . The AMCM lacks adequate legal independence and final decision making
1. The information dissemination and monitoring framework initiative was undertaken to (i) help improve the transparency of activities in offshore and international financial centers and (ii) provide the Fund with data to monitor developments in financial centers . At the 2003 review of the offshore financial center (OFC) program, in response to a request by jurisdictions initially made at the first Roundtable in 2003, Directors recommended that staff work with jurisdictions in their dissemination efforts. A data template
This supplement reviews the data received thus far and the progress made by participating jurisdictions in their dissemination efforts. Data for major jurisdictions that declined to participate are also provided where it is available from published sources. In addition, data on a sample of advanced economies are provided for comparative purposes. The framework identified a minimum set of variables for dissemination and recommended that jurisdictions publish data on those variables although jurisdictions could choose to publish more. Tables 2 and 5 to 13 provide the data received on those variables. The framework also identified additional variables that were to be provided to the Fund to help Fund staff monitor developments in financial centers.
In recent years, the IMF has released a growing number of reports and other documents covering economic and financial developments and trends in member countries. Each report, prepared by a staff team after discussions with government officials, is published at the option of the member country.
initiated the supervisory review process, it is working on guidelines, emphasizing the management of those risks not addressed in Pillar 1.
D. Disclosure of Financial Information and Accounting Issues
38. The quality of financial disclosure has improved significantly since the 2002 assessment . The AMCM is reporting to the IMF’s InformationFrameworkInitiative which was launched in 2004. Data reported includes size and scope of activities in banking and insurance, information on assets, income source (net interest versus fee income), as well as locational
: Size of the Banking Sector in Selected Financial Centers, end-2004 1/ 2/
Source: Data submitted for the InformationFrameworkinitiative and country authorities.
1/ The jurisdictions reporting under the initiative have been numbered in order of banking asset size. Numbered jurisdictions provided data to the Fund on a confidential basis. Data on named jurisdictions were obtained from public sources.
2/ The data have been plotted on a logarithmic scale because of the wide dispersion in asset size among jurisdictions.
13. The financial system comprises