IMF Publishes Reports on the 2018 Article IV Consultation with Bahamas
IMF published its staff report and selected issues report in the context of the 2018 Article IV consultation with Bahamas. The report highlights that commercial banks in Bahamas remain liquid and well-capitalized. Staff commended the authorities for tabling legislation to create the country’s first credit bureau, in line with past IMF advice. Parliament passed the bill in early 2018. Staff recommended the authorities to move swiftly with the implementation of the credit bureau, as it will take time to populate its database.
The staff report reveals that seven commercial banks, four of which are subsidiaries of foreign banks, dominate the domestic financial sector and their balance sheets appear sound. As of the end of 2017, the average capital adequacy ratio stood at 33.3%, well above the regulatory requirement of 17%. Liquid assets represented 29.0% of total assets and more than double the statutory minimum. The stock of nonperforming loans (NPLs) declined to 9.2% of total loans, from 11.4% at the end of 2016. Despite ample capital and liquidity in the system, banks remain cautious in making new loans, which has kept credit to private sector, excluding NPLs, broadly flat. A more proactive approach to accelerate the resolution of NPLs should support the economic recovery. The central bank’s intensified monitoring of NPLs is welcome, as it will encourage a faster resolution of these loans, particularly as economic conditions improve. The authorities are confident that their increased monitoring of NPLs will lead to a faster resolution of these loans. The central bank has mandated banks to report on a quarterly basis the status of the top 20 NPLs. The authorities expect that this approach will encourage banks to resolve NPLs faster, with visible results expected by the end of 2018.
Staff welcomed progress in implementing FSAP recommendations. The Central Bank of The Bahamas (CBOB) has continued strengthening its regulatory and supervisory framework and making progress in implementing the Basel II and III frameworks. Stress tests of CBOB continue to show resilience of the banking system to large shocks. CBOB has completed implementation of Basel II and the capital component of Basel III. Commercial banks have been subject to Basel III capital reporting since 2013. CBOB is now focused on completing the remaining elements of Basel III, the countercyclical capital buffer, and liquidity coverage ratios. CBOB is also simplifying its Basel II (minimum disclosure requirements) and Basel III regulatory framework, consistent with the proportionality principle set out by BCBS. With respect to the Insurance sector, the report mentions that the Insurance Commission (IC) has strengthened onsite inspections and introduced a risk-based capital regime for long-term insurance companies. IC plans to conduct a three-year pilot program to also include general insurance companies in their risk-based capital regime.
The selected issues report offers an overview of the labor market and makes the case for a rules-based fiscal framework for the Bahamas and discusses its design, calibration, and implementation.
Related Links
Keywords: Americas, Bahamas, Banking, Insurance, Article IV, FSAP, Basel III, Proportionality, IMF
Previous Article
US Agencies Propose Revisions to Capital Rules to Phase in CECLRelated Insights
|
News
FSB Publishes the G-SIB List for 2018FSB published the 2018 list of global systemically important banks (G-SIBs) using end-2017 data and an assessment methodology designed by BCBS.
November 16, 2018
WebPage
Regulatory News
|
|
News
BCBS Publishes Additional Information on the 2018 G-SIB AssessmentBCBS published further information related to the 2018 assessment of global systemically important banks (G-SIBs), including additional details to help understand the scoring methodology.
November 16, 2018
WebPage
Regulatory News
|
|
News
CBB Proposes and Finalizes Rulebook Modules for Banks in November 2018CBB announced the issuance of new leverage ratio requirements under Module CA (Part 3) for Islamic (Chapter CA-10) and conventional bank licensees (Chapter CA-15).
November 15, 2018
WebPage
Regulatory News
|
|
News
OFR on Financial Stability Risks in Its 2018 Annual Report to CongressOFR released its 2018 Annual Report to Congress, which examines risks to the financial stability in the United States.
November 15, 2018
WebPage
Regulatory News
|
|
News
SRB Sets Expectations on Resolvability of Banks in Context of BrexitSRB published a position paper that presents its expectations about ensuring resolvability of banks in the context of Brexit.
November 15, 2018
WebPage
Regulatory News
|
|
News
PRA Publishes Final Policy on Capital Framework for SecuritizationPRA published the policy statement PS29/18, which provides feedback to responses to the consultation paper CP12/18 on the new EU framework and significant risk transfer for securitization.
November 15, 2018
WebPage
Regulatory News
|
|
News
IAIS Publishes Drafts of Revised ICP 8, ICP 15, ICP 16, and ICP 20IAIS published the drafts of revised Insurance Core Principles on Public Disclosure (ICP 20), Investments (ICP 15), Enterprise Risk Management for Solvency Purposes (ICP 16), and Risk Management and Internal Controls (ICP 8), along with a revised draft of the glossary on enterprise risk management (ERM).
November 14, 2018
WebPage
Regulatory News
|
|
News
PRA Updates Final Policy and Reporting Form for Leverage Ratio in UKPRA published the Policy Statement PS28/18, which provides feedback to responses to the consultation paper CP14/18 titled "UK leverage ratio: Applying the framework to systemic ring-fenced bodies and reflecting the systemic risk buffer."
November 14, 2018
WebPage
Regulatory News
|
|
News
IASB Could Extend Effective Date for IFRS 17 and IFRS 9 for InsurersIASB has voted to propose a one-year deferral—to 2022—of the effective date for the new insurance contracts standard IFRS 17. IASB also decided to propose extending to 2022 the temporary exemption for insurers to apply the financial instruments standard IFRS 9.
November 14, 2018
WebPage
Regulatory News
|
|
News
MAS Amends Notice 637 on Capital Adequacy Requirements in SingaporeMAS published the final, revised Notice 637 on the risk-based capital adequacy requirements in Singapore.
November 13, 2018
WebPage
Regulatory News
|
