CIMA boss notes challenges to regulators

(CNS Business): At a recent regional conference in Panama the managing director of the Cayman Islands Monetary Authority pointed to the mounting challenges faced by regulators in the constantly changing environment of international finance .

In her presentation at the Seventh Meeting of the Regional Consultative Group for the Americas of the Financial Stability Board (FSB), Cindy Scotland said International Financial Centres (IFCs) face risks and challenges similar to jurisdictions with much larger economies but they are amplified for IFCs. With financial activities and risks constantly changing, they require ongoing monitoring and assessment.

With the mass implementation of new initiatives and most intrusive supervision post the world economic crisis, there was a need for increasingly specialized and knowledgeable staff in the region’s regulators. But at the same time there is a limited pool of experienced regulators worldwide and the economic slump has cut budgets, making it harder to attract those experts and less money for training.

“Many smaller jurisdictions with international financial centres do not have ample economic diversification,” she warned. “Financial services and tourism tend to dominate economic activity. However, within the broader financial services activity, some jurisdictions have achieved a level of diversification in provision of multiple types of financial services.”

At the meeting in Panama, members were updated on the FSB’s global financial regulatory reform agenda including: the progress on building resilient financial institutions; ending “Too-Big-To-Fail”; and transforming shadow banking into resilient market-based finance; and making derivatives markets safer.

Members discussed vulnerabilities in the global financial system and regional financial stability issues, including the potential impact on the region of uncertainties in global growth prospects and changes to unconventional monetary policies in advanced economies.

The FSB promotes international financial stability by coordinating national financial authorities and international standard-setting bodies as they work toward developing strong regulatory, supervisory and other financial sector policies. It is chaired by Governor of the Bank of England, Mark Carney. The Cayman Islands is a member of the FSB’s Regional Consultative Group for the Americas, and is represented by Scotland and Chief Officer for the Ministry of Financial Services, Dax Basdeo.

Tags: CIMA

Category: Finance, Financial Services