BERMUDA BANKING INDUSTRY REGULATIONS: AUTHORITY WORKS TOWARDS CONTINUED GROWTH AND STRENGTHENED SUPERVISION

The Banks and Deposit Companies Act 1999 provides the regulatory framework for deposit-taking businesses in Bermuda, with the Authority holding powers of supervision over licensed institutions. The Act allows for three types of licenses - banking, deposit company, and restricted banking - to be issued by the Authority.

Regulatory Approach

In shaping its regulatory approach, the Authority closely follows prudential frameworks set forth by the Basel Committee on Banking Supervision (Basel) and collaborates with the Ministry of Finance to ensure legislation keeps pace with the rapidly evolving business landscape. The Authority also maintains close relationships with domestic and international regulators to ensure effective supervision of entities under its purview.

Supervisory Activities

Regular off-site and on-site visits are a key component of the Authority’s supervisory approach, with institutions deemed high-risk or exhibiting increasing risk levels subject to more frequent review. On-site visits allow the Authority to assess compliance with policies and procedures, as well as management’s efforts to monitor and control business risks. These visits typically involve:

• Structured interviews with management and staff
• Reviews of selected documentation

Policy and Guidance Framework

The Authority has established a comprehensive policy and guidance framework for supervising banks and deposit companies, including:

• Final rules on Basel III for Bermuda banks
• Annual stress testing updates
• Corporate governance guidelines
• Other regulatory tools

All of these resources are available on the Authority’s website.

Commitment to Oversight

As the banking industry continues to evolve, the Authority remains committed to strengthening its oversight and ensuring the highest standards are maintained in Bermuda’s deposit-taking sector.