in a climate where technology allows for rapid movements of funds, while abrupt changes in market sentiment can lead to large scale deposit runs. public trust and confidence are therefore essential and good corporate governance helps to set a basis for that assurance. 3. the international experience over the last few years has led to major advances in strengthening the governance framework for financial institutions. the magnitude and reach of the global financial crisis prompted a great deal of soul searching and introspection on the part of governments and regulators as to what went wrong and how to forestall similar meltdowns in the future. in zeroing in on the potential governance fragilities that were unearthed, major legislative changes were enacted ; regulation and supervision were reinforced and backstopped by more substantial penalties for violations ; and collaboration among regulators was significantly enhanced at domestic and international levels. by way of example, in the us the dodd - frank wall street reform and consumer protection act ( dodd - frank act ) was passed in 2010 to, among other things : i ) address risks to the stability of the us financial system in part via the creation of the financial stability oversight council ; ii ) end too - big - to - fail bailouts of large, complex financial institutions ; iii ) increase transparency and regulation for certain complex financial instruments ; and iv ) strengthen protections for consumers and investors. 2 more generally, the group of 20 / organization for economic cooperation and development ( g20 / oecd ) ’ s principles of corporate governance were progressively strengthened. at the same time, the creation of the financial stability board ( fsb ) in april 2009 marked an important step in the intensification of international coordination on financial governance and bank for international settlements, basel committee on banking supervision, “ principles for enhancing corporate governance ” october 2010 available at http : / / www. bis. org / publ / bcbs294. htm regrettably, just last week a new bill was passed in the us house of representatives that, if approved into law, could significantly roll back many of the safeguards in the dodd - frank act. stability matters. 3 established since 1983, the caribbean group of banking supervisors has also found its work intensifying in the arena of governance, especially in light of the growing incidence of cross - border financial mergers, acquisitions and investments. 4. as major central banks were catapulted into the role of picking up the pieces in the wake of the financial crisis, more scrutiny is being paid to governance in central banks themselves

development financed by offering depositors above - market interest rates were suspended by the central bank. in the late ‘ 80s to early ‘ 90s the indigenous commercial banks confronted severe economic difficulties which required central bank support, and eventually merged operations in 1993. most recently, in 2009 the collapse of cl financial limited ( clf ) and related companies represented a major financial shock not only to trinidad and tobago but also to the rest of the caribbean ; clf ’ s insurance and banking subsidiaries were at the heart of the imbroglio. in all of these episodes, confidence was put to the test due to the fear of contagion while, to varying degrees, public resources were utilized in the search for solutions. but challenges create opportunities : as in the us born crisis ( with the dodd - frank act and stepped - up surveillance ), and in jamaica ( with its significant upgrading of legislation following its own financial crisis in the late ‘ 90s ), the financial problems in trinidad and tobago prompted improvements in legislation, oversight and self - regulation of financial institutions. 8. nonetheless, the current two - layer governance framework — at the legislative / supervisory and individual company levels — needs to evolve further. the main bits of legislation that spell out governance requirements for financial institutions in trinidad and tobago are the companies act, which requires directors to … ” act honestly and in good faith with a view to the best interests of the company ”, the financial institutions act, insurance act, cooperative societies act and the moneylenders act. bolstering these are guidelines issued by the central bank to its licensees ( banks, nonbanks and insurance companies ) on corporate governance and on determining appropriateness of persons to hold key positions in the organization ( “ fit and proper guidelines ). the governance framework for credit unions is less well defined, with more discretion left to individual credit unions on how to establish governance mechanisms and criteria for appointments to directorships and top management positions. some financial associations also set out voluntary codes that they encourage their membership to follow : for example the bankers association of trinidad and tobago ( batt ) has its code of banking practice, while the association of trinidad and tobago insurance companies ( attic ) outlined a code of ethics. a few years ago several financial and nonfinancial companies in trinidad and tobago came together and set out a comprehensive corporate governance code ( 2013 ). among other things, this code put forward best practices on board composition, monitoring and performance, audits and risk management, and transparency and accountability in promoting