On 13th September 2018, the Bermuda Monetary Authority (BMA) hosted the eighth meeting of the Financial Policy Council (Council) at its offices in Hamilton, Bermuda.
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 Premier and Minister of Finance the Hon. David Burt (chair), Sir Andrew Large (deputy chair), BMA CEO Jeremy Cox, Michael Butt, Dame Amelia Fawcett, Gil Tucker and Dr. DeLisle Worrell.
At their meeting of 13th September, Council members discussed recent international and domestic economic developments and assessed the impact these might have on Bermuda’s financial stability. Council members evaluated the possible impacts arising from the recent increases in global interest rates, the strengthening of the US dollar and the continuation of global trade frictions. Members also discussed developments in the international (re)insurance industry, a key pillar of Bermuda’s economy, focusing on trends in mergers and acquisitions, the evolution of the reinsurance cycle and the current hurricane season.
Members also discussed developments underway in Bermuda in respect to fintech, in particular, the island’s efforts in becoming a centre of excellence in relation to hosting a vibrant, innovative and well-regulated fintech sector. Council members welcomed the importance attached by the Government of Bermuda and the BMA to the need for a rigorous regulatory framework that both fosters innovation while enhancing Bermuda’s international reputation as a world-class international financial centre.
Members reviewed several matters related to banking in Bermuda. These matters covered international issues (e.g. the fully phased-in Basel III requirements, the introduction of IFRS9, and possible enhancements to Bermuda’s recovery and resolution framework) as well as domestic ones (e.g. the macroeconomic conditions in which banking is taking place, trends in loan attrition, modest credit growth, and the borrowing costs faced by Bermuda residents and business, especially SMEs). It was also noted that legislative changes had been recently introduced to allow for a restricted class of banks to support the new fintech sector. Members requested that the Ministry of Finance and Bermuda Monetary Authority review these various developments from an economic and financial perspective for discussion at the next meeting of the Council.
In addition, the following topics were discussed:
- Recent developments related to European Union’s non-cooperative jurisdictions initiative and the importance of Bermuda taking necessary action to avoid being blacklisted as non-cooperative.
- Work underway by the National Anti-Money Laundering Committee (NAMLC) aimed at strengthening Bermuda’s AML/CFT framework as well as getting a favourable assessment at the Caribbean Financial Action Task Force (CFATF) Mutual Evaluation Review of late September 2018.
- Activities underway at the Bermuda government and the BMA in respect to strengthening cyber resilience of both public bodies and regulated financial entities.
The Council’s next meeting is scheduled for December 2018.