-College of Regulators to coordinate info sharing
Caribbean Community (Caricom) Heads of Government have agreed to seek financing from International Financial Institutions (IFI’s) and multilateral development banks to strengthen the capacity of regional financial institutions to perform what they say is a crucial developmental and stabilization role.
The disclosure is embodied in a broader Declaration on the regional financial sector which seeks to create a new framework for financial regulation and supervision in the region in the wake of what Heads of Government who met in Georgetown last week for their 30th Regular Summit say are ever present threats to the integrity of the regional financial architecture.
The Declaration has identified the Caribbean Development Bank (CDB) and the Caricom Development Fund as being among the key regional financial agencies in pursuit of the development and stabilization objectives and has said that the strengthening of these institutions is critical to helping to protect against vulnerability to exogenous shocks.
A key decision arising out of the summit deliberations is the agreement to establish a regional College of Regulators, one of the primary functions of which will be to create and oversee a condition of closer collaboration among financial supervisory authorities in the various Caribbean territories in order to facilitate the sharing of information that will allow cross-border financial issues to be addressed effectively.
Meanwhile, regional Heads have conceded that if effective surveillance, regulatory and supervisory systems are to be implemented, both public and private sector companies will have to embrace higher standards for disclosure, transparency and corporate governance which includes the generation and timely intra-regional sharing of reliable data and information.
While the Caricom Heads avoided any specific reference to the sudden and dramatic collapse of Clico earlier this year which has left thousands of investors and insurance policy holders in a state of uncertainty regarding the likelihood of them being able to retrieve their funds, they, nonetheless, accepted the need for “early warning systems, stress testing and the publication of financial soundness indicators” which they said is required for effective surveillance, regulation and supervision “given the sensitivity and cross-cutting nature of financial transactions.”
The focus by Caricom Heads on what the Declaration describes as “intra-industry cross-border supervision” derives from what they say is “the considerable degree of financial integration that exists in the Caribbean region” as a result of organic growth and instances of mergers and acquisitions in the region.
