NASSAU, BAHAMAS — The Central Bank of The Bahamas has commenced a 60-day consultation period on its Draft Recovery Planning Guidelines that will serve as a general guide to implementing a supervised financial institution’s (SFI) recovery plan.
The regulator said in a statement that the guidelines represent another step in modernizing the recovery and resolution framework for banks and credit unions in The Bahamas, in line with international best practices.
In June 2018, the Central Bank released its first Consultation Paper (First Round Consultation), setting out its proposals for changes to the legislation relating to the resolution of problem banks.
In October 2019, the Central Bank released a Second Round Public Consultation Paper.
“That paper summarized the key additional changes, which the bank was proposing to the then draft bills and bylaws issued in the First Round Public Consultation” the regulator noted.
“The proposed enhancements are now enacted in the Central Bank of The Bahamas Act, 2020; the Banks and Trust Companies Regulation Act, 2020; and the Protection of Depositors (Amendment) Act, 2020.
“Collectively, the legislation brings about reforms that allow the Central Bank to use an administrative approach to resolve failing banks, while improving the resilience and stability of the Bahamian banking sector.”
According to the Central Bank, the consultation paper summarizes key elements which the Central Bank expects SFIs to include in their recovery plans.
Further, these guidelines address the SFI’s responsibility in developing and testing the institution’s recovery plan, ensuring continued governance and accountability and the promotion of financial stability.
The consultation period will end on February 18, 2022.
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