HAMILTON, BERMUDA – Bermuda Financial Policy Council (Council) held its twelfth meeting on 5th December 2019. The meeting was hosted by the Bermuda Monetary Authority (BMA).
The role of the Council is to assess possible threats to Bermuda’s financial stability, and to identify policies and actions to mitigate or eliminate such threats. It also advises the Government on the development of the financial stability framework in Bermuda, and makes policy recommendations designed to support the general economic and financial well-being of the country. Members of the Council are the Minister of Finance the Hon. Curtis Dickinson JP, MP, (chair), Sir Andrew Large (deputy chair), BMA Executive Chair Jeremy Cox, Michael Butt, Dame Amelia Fawcett, Gil Tucker and Dr. DeLisle Worrell.
At the meeting, Council members discussed economic, demographic and financial challenges facing Bermuda and the potential risks to financial stability. The members of Bermuda’s Fiscal Responsibility Panel were invited to this part of the meeting. The Council members took note of the Government’s efforts to mitigate the risks facing Bermuda and the progress being made on several fronts. There remained a number of challenges that would need to be addressed coherently in order for Bermuda to continue making progress in reducing the level of external government debt and establish the conditions for renewed and sustainable economic growth, including immigration reform and tax reform.
Council members also discussed developments related to the European Union’s Code of Conduct (Business Taxation) Working Group under the non-cooperative jurisdictions initiative and the OECD Base Erosion and Profit Shifting work, in particular in relation to the growing digitalisation of the economy. As has been the case in previous FPC meetings, Members supported the decision of the Bermuda Government to actively engage with EU and OECD officials in order to advance the island’s position with respect to these initiatives. Members’ acknowledged the growing complexities of tax-related international developments and urged the Government to double its efforts towards working together with relevant authorities involved in shaping these agendas.
Fintech developments in Bermuda and internationally, in particular stablecoins, were also discussed by the FPC. Members examined risks and opportunities emerging from both digital currencies and fintech more generally -and how these relate to Bermuda’s efforts to attract financial service providers business to the island. The discussion focused on the reliance on an effective supervisory framework within which all aspects of the fintech sector will develop and other risk mitigation measures that might be taken to ensure that Bermuda’s reputation as a world class International Financial Centre is robustly protected.
In addition, the following topics were discussed:
- Activities underway at the Bermuda Government and the BMA in respect to continuing with the development of a recovery and resolution framework for Bermuda banks
- Recent developments in relation to cyber resilience of the financial sector as well as with respect to the growing market of cyber risk insurance underwriting.
The Council is scheduled to meet again in April 2020.
Notes to editors
The Financial Policy Council met for the first time in December 2015. The Council is an advisory body supported by the Ministry of Finance and the BMA and was established to promote financial system stability in Bermuda. More specifically, the Council provides macroprudential oversight, advises on the development of the financial stability framework in Bermuda and makes policy recommendations designed to support the general economic, and financial well-being of the country as well as its financial stability.
Members of the Council are: the Minister of Finance (chair), Sir Andrew Large (deputy chair), Jeremy Cox, Michael Butt, Dame Amelia Fawcett, Gil Tucker and DeLisle Worrell. Sir Andrew is a former Deputy Governor of the Bank of England, and now an advisor to central banks and governments. Michael Butt has had a distinguished insurance career, including in the Bermuda-based global insurance industry and is currently chairman of the Board of AXIS Capital Holdings Limited. Dame Amelia Fawcett is Chairman of the Standards Board for Alternative Investments in London, Chairman of Investment AB Kinnevik in Stockholm, Chairman of Vedere SARL in Luxembourg, a Non-Executive Director of State Street Corporation in Boston, and a Non-Executive Member of Her Majesty’s Treasury Board. Gil Tucker is a chartered accountant who worked at accounting firm Ernst & Young for 35 years, latterly as Bermuda Managing Partner and is currently on the Board of HSBC Bermuda. Dr. DeLisle Worrell is a former Governor of the Central Bank of Barbados, and now a member of the Bretton Woods Committee. Dr Worrell also worked with the International Monetary Fund, focusing on monetary policy, financial stability and stress testing.
The formation of the Council has been part of a strategic project begun in 2011 to strengthen the financial stability framework in Bermuda. As part of this framework Bermuda has aligned its prudential standards and supervision practices to the international standards established by the Basel Committee on Banking Supervision, the International Association of Insurance Supervisors and the International Organisation of Securities Commissions. The BMA has also established a dedicated macroprudential monitoring and analysis function to provide early warnings and take necessary mitigating actions to enhance its existing regulatory framework. As part of the overall framework that supports financial stability in Bermuda the Government has established the Bermuda Deposit Insurance Corporation Act 2010 and the Banking (Special Resolution Regime) Act 2016.
In addition to the work of the Council, the Financial Stability Committee, which comprises senior officials from the Ministry of Finance and the BMA, was established in 2015 to provide a supporting role to the Council and implementing its recommendations. The recommendations relate primarily to the early warning functions of the macroprudential dimension, but extend to further development of the recovery and resolution regime in accordance with standards laid down by the Financial Stability Board set up in Basel by the G20.
The Council has been established under a Memorandum of Understanding (MoU) between the Ministry of Finance and the BMA, signed by the Minister of Finance and the CEO of the BMA in August 2015.
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