News

Industry Briefing on the

Public Consultation on Compendium of Proposed Legislative Reforms

Remarks by Governor John A Rolle

Good morning, and welcome to our industry briefing.

In recent years, the Central Bank of The Bahamas has been working to amalgamate a series of reforms to the regulatory landscape for supervised domestic and international financial institutions. We are pleased to present the highlights of these reforms over the two sessions this morning and later this afternoon.

The common themes include:

• Strengthening the domestic financial stability framework, particularly the safety net for local depositors, enhancing the adequacy of funding mechanisms for deposit insurance, and enhancing preemptive planning frameworks for the resolution of weak banks and credit unions.
• Consolidating and strengthening the oversight of payments and money services providers. This would also establish frameworks to advance financial inclusion and promote consumer financial protection ideals.
• Consolidating and strengthening the enforcement regimes for all Central Bank supervised financial institutions.

As regards to credit unions, which are all members of the deposit insurance system and members of the credit bureau, the Central Bank is proposing reforms that would place emphasis on strengthened governance mechanisms, improved risk management, and more regulatory oversight of the recruitment and appointment process for persons at the helm of these entities, either at the board or senior management levels. These would be similar to mechanisms in place for banks, while preserving the characteristics that set the cooperative nature of these entities apart from banks.

In the money services space, there will no longer be a licensing distinction between payments services institutions and money transmission businesses, given the existing equivalencies in their business models and the range of prudential oversights that must govern their activities.

The proposed reforms to payments systems also clarify the mandate that the Central Bank would have to promote access and inclusion in domestic banking and payments services--especially at the transactional levels. It would empower the Central Bank to begin to address consumer protection matters, as may relate further to fee setting and other practices for products and services used for payments. These include savings and checking accounts, digital wallets, and card-based instruments. Any work advanced in this space will continue to be based on public consultation, informed by international best practices, and appropriately tailored to the circumstances of The Bahamas.

Potential rules, guidance, and regulations that would give full force to the outlined reforms, would also impact other the primary legislation being discussed today other than payments. Those, too, will be exposed to the necessary public consultation.

There are other reform principles behind the legislative proposals, which will be discussed during this webinar. The Central Bank would be happy to receive feedback, both today and in written form, within the 31 October deadline that has been set for public comments.

With that said, thank you all for joining the sessions today, and we look forward to your feedback.