DeLisle Worrell: General financial sector issues and policies
Opening remarks by Dr DeLisle Worrell, Governor of the Central Bank of Barbados, at the
Financial Institutions Conference "General Financial Sector Issues and Policies", Bridgetown,
3 November 2011.
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This is our second annual conference for all financial institutions. We have a full day of
discussion, which allows us to study current issues of the financial sector in depth. With the
participation of all financial institutions, and with the collaboration of the Financial Services
Commission, we are able to take a comprehensive view of the financial system, including
banks, finance companies, insurance, pensions, mutual funds, credit unions and securities.
This conference deals with financial institutions that do domestic business; in March this year
we held a conference for financial institutions in our international financial centre, and that is
also intended to be an annual event.
Since last year we have taken important steps to further strengthen financial oversight, and
to increase the efficiency of the delivery of financial services. The most important of these
was the establishment of the FSC, with responsibility for the supervision of non deposit
takers. The FSC is in the process of recruiting staff and setting up systems, and Central
Bank is lending its expertise wherever we can be helpful. This morning you will hear more
about its activities from the FSC themselves.
We have also been strengthening cooperation with banks which have domestic retail
operations, through regular quarterly meetings, as well as ad hoc meetings when we need to
make policy changes, such as the change in our foreign exchange margins.
We are constantly strengthening cooperation with Canadian and other overseas regulators,
with the Bank of Canada and with the Head Offices of banks operating in Barbados. We do
consolidated supervision of all the operations of multinational banks, together with the
regulators of all the countries in which these banks operate, through a variety of channels
and mechanisms, including collective overview by the regulators and discussion with the
banks in meetings which have come to be known as "colleges". Regulators also arrange
conference calls and have informal contact, as well as more formal arrangements such as
information-sharing memoranda of understanding. Two weeks ago I led a team of my
colleagues on a most successful visit to Toronto and Ottawa, where we had discussions with
the major Canadian banks, including those active in our international financial centre, with
the Office of Supervisor of Financial Institutions (OSFI), the Bank of Canada and the
Financial Institutions Supervisory Committee, which also includes their deposit insurance
corporation, their consumer protection agency and the Treasury Department. We took the
opportunity to meet with the newly established Toronto chapter of BIBA, and our High
Commission in Ottawa arranged a reception for potential investors in Barbados.
As we all know, the largest of our financial institutions operate at a regional level, and therefore
as supervisors we need to be concerned about risks that arise from regional linkages. A project
for the publication of a regional Financial Stability Report got underway last month. The target
for publication of the first regional financial stability report is December 2012. In the meanwhile
preparation work on Barbados' own financial stability report is advanced, and publication is
slated for end-December this year.
Together with our regional partners, Barbados has sought to have a voice in the ongoing
efforts for reform of the international financial system. We have been invited to join the
Regional Consultative Group for the Americas, set up by the Financial Stability Board, the
body established by the Group of 20 countries to oversee the process of international
financial reform. Shane Lowe and I are preparing a paper on Caribbean perspectives on
international financial reform for presentation at the inaugural meeting of the Regional
Consultative Group, on December 2 in Mexico City. This year at the time of the Annual
Meetings of the World Bank and IMF, the Caribbean countries were invited to a breakfast
meeting with the Managing Director of the IMF to offer our perspective on the Fund's work
and to share our concerns. This is the second year that we had such a meeting.
On the Clico matter, we have had very encouraging cooperation with OECS countries
through the Advisory Group which has been established by the Judicial Managers, and which
I co-chair with my friend and colleague Timothy Antoine, the Permanent Secretary of Finance
of Grenada. The Judicial Managers have done an outstanding job in providing a
comprehensive menu of options for the resolution of the Clico insolvency, from which the
option which is in the best interests of policy holders may be chosen.
The topics we will cover today are:
 The impact of the global crisis
 The Role of the FSC
 Financial institutions and the financing of government
 Things that affect credit quality
 Changes in the operation of the FX market; and
 Considerations for interest rate policy
Today's sessions are not for decision making; their value is in the discussion of the issues. If
we are to make good policy, we must be fully informed and the issues must be fully
ventilated. Today we will share information, and there is an opportunity for everyone to
contribute their views on the issues presented. Half the time allotted to each session is
intended for Q and A. Presenters are asked to keep their eyes on the clock, to ensure that
you do not erode the audience's time.
We look forward to your active engagement in today's activities. Our philosophy of regulation
has always been cooperative, never coercive or confrontational. It is an approach which
works very well, because it recognizes the interests of everyone, in a context where we all
agree that we must, in the end, do what is in the best interests of the country.