The Central Bank of The Bahamas launched the second consultation on the financial crisis management framework. The first consultation, which was released in June 2018, had set out the proposals for changes to the legislation related to the resolution of problem banks. This second consultation summarizes the key additional changes being proposed to the draft Bills and Byelaws issued in the first round of public consultation. The proposed enhancements have been set out in the draft Banks and Trust Companies Regulation (Amendment) Bill, 2019; the draft Central Bank of The Bahamas (Amendment) Bill, 2019; the draft Protection of Depositors (Amendment) Bill, 2019; and the draft Protection of Depositors' (Amendment) Byelaws, 2019. The comment period on this consultation expires on October 31, 2019.
In January 2019, IMF conducted a review of The Bahamas’ financial services sector and assessed the legal and regulatory framework of the sector against international standards under their Financial Sector Assessment Program (FSAP). The IMF Mission reviewed the draft Bills and Byelaws circulated during the first round of public consultation and made a number of recommendations with a view to enhancing the drafts. After considering IMF’s recommendations, the bank is proposing further amendments to the proposed financial crisis management framework. Given the extent of the amendments sought in regards to the financial crisis management framework, the Central Bank will recommend that the government repeal and replace the Banks and Trust Companies Regulation Act, 2000.
In January 2019, IMF had conducted a review of financial services sector in the Bahamas. IMF had assessed the legal and regulatory framework of the sector against international standards under the Financial Sector Assessment Program (FSAP). The IMF Mission reviewed the draft Bills and Byelaws circulated during the first round public consultation and made a number of recommendations to enhance the drafts. After considering the IMF recommendations, the Central Bank of the Bahamas is proposing further amendments to the proposed financial crisis management framework. Given the extent of the amendments sought in regard to the financial crisis management framework, the Central Bank will recommend that the government repeal and replace the Banks and Trust Companies Regulation Act, 2000.
Among others, the Central Bank is proposing revisions to the Protection of Depositors Act, 1999 since the first round consultation. These revisions seek to enhance the corporate governance framework to reduce the time within which the Corporation must make payouts to depositors following the failure of a member institution. The revisions also seek to include co-operative credit unions in the membership of the Deposit Insurance Fund. Additionally, the Central Bank is proposing several amendments, unrelated to the financial crisis management framework, which seek to, inter alia, curtail the amount of funds that it may lend to the government, to authorize the Central Bank to issue digital currency as legal tender, and to allow the Central Bank to provide banking services to certain non-bank financial institutions, such as credit unions.
Comment Due Date: October 31, 2019
Keywords: Americas, Bahamas, Banking, Crisis Management Framework, Resolution Framework, Deposit Insurance, FSAP, IMF, Central Bank of Bahamas
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