Bermuda Financial Policy Council (Council) held its tenth meeting on 24th April 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 (chair), Sir Andrew Large (deputy chair), BMA Executive Chair Jeremy Cox, Michael Butt, Dame Amelia Fawcett, Gil Tucker and Dr. DeLisle Worrell.

At the April 24th meeting, Council members discussed Bermuda’s fiscal situation and debt outlook. While noting the improvement in the medium-term fiscal outlook in the wake of decision taken in recent budgets, Members urged the Government to continue to identify ways of making progress in reducing the large level of outstanding government debt. Council members also reviewed progress being made in implementing the Government’s proposed changes to immigration policy. The prospect of declining demographics represent a major risk to Bermuda’s government finances, in particular as it relates to sustained funding for healthcare and pension benefits. Council members urged the Government to review the possible linkages between immigration policy reform and sustained economic growth.

Council members also discussed the recent decision by the European Union’s Code of Conduct (Business Taxation) Working Group to put Bermuda on a ‘blacklist, of non-cooperative jurisdictions’ initiative. Members supported the decision of the Bermuda government to promptly engage with EU officials in order to get the island removed from the blacklist. Importantly, Council members welcomed the decision by the Government to strengthen its efforts to comply with the agreements reached with the European Union’s Code of Conduct (Business Taxation) Working Group in the timeliest possible manner.

Several areas of Bermuda’s emerging fintech sector were also discussed during the meeting, including the regulatory framework for digital asset business firms and initial coin offerings.  Members reviewed some international comparisons and examined the balance of risks and opportunities emerging from fintech, and how best to promote the further development of Bermuda’s fintech sector, while ensuring that Bermuda’s reputation as a world class International Financial Centre was robustly protected.

In addition, the following topics were discussed:

• Work underway in Bermuda aimed at strengthening the jurisdiction’s resilience to cyber incidents, including measures taken by the Bermuda Government, regulated financial institutions and the BMA.
• Activities underway at the Ministry of Finance and the BMA with respect to continuing with the development of a resolution framework for Bermuda banks.

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 the Hon. Curtis Dickinson (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.