Risk assessments for firms ready in 2011
Risk assessments performed by The Central Bank of The Bahamas’will be available to financial institutions in early 2011, as the bank is pleased with the initial responses to its Risk-Based Supervision Framework(RBSF).
“We are very grateful and encouraged by the valuable feedback from firms to our risk assessment questionnaires and their engagement in our first round of meetings,”said a statement from the bank’s quarterly newsletter to senior officials.”We will be feeding back the results of our risk assessments to firms in the first quarter of 2011.”
The bank is also seeking to complete risk assessments of the most”material”institutions over the first half of 2011. A series of seminars is also scheduled in the new year to further build awareness of the framework.
The RBSF was developed over the past year and it follows the guidelines of the best international practices. It focused on the four broad areas of an institution’s risk profile, specifically its inherent business risks, mitigating controls, management oversight and governance and financial soundness.
Governor for the Central Bank Wendy Craigg toldGuardian Businessin an earlier interview that the RBSF isn’t intended to replace the current risk-focused, on-site examination and supervisory processes already in place, but will act as a complement to the standard regulatory method. She added that the RBSF will provide a”broader and more complete perspective”of a firm’s risk profile.
The bank also highlighted its activities this year in the quarterly newsletter, which included a review of the guidelines for the management of liquidity risk and the launch of its survey on market risk exposure. The findings of the survey revealed that financial institutions in the country have”very limited”market risk exposures, and also identified interest rate risk as the primary area in potential exposure.
Questions surrounding the creation of an annual publication of firms’financial statements was also addressed, as the bank said it has made at a decision and will issue a notice on it in the near future.
“We anticipate a very active agenda for 2011, however, we remain confident that, by working together, we will be able to achieve success in our efforts,”noted the newsletter.