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Honduras’ Financial Regulatory Bodies Embrace International Best Practices

A Commitment to Transparency and Effectiveness

Tegucigalpa, Honduras - The Financial Services Authority of Honduras has reaffirmed its commitment to providing transparent and effective regulatory frameworks that meet international standards.

Risk-Based Approach: The Heart of Supervisory Work

At the heart of the Authority’s supervisory work is a risk-based approach that ensures resources are allocated to those firms posing the greatest risk. This philosophy has been endorsed by leading international regulatory bodies and enables the Authority to detect potential problems at an early stage, taking timely action when necessary.

“The use of a risk-based framework allows us to effectively manage our supervisory program, allocate resources where they’re needed most, and adhere to global best practices,” said a spokesperson for the Financial Services Authority. “This approach also ensures that if an entity fails, it either returns to compliance or exits the market in a timely and efficient manner.”

The Four-Component Framework

The risk-based framework used by the Authority considers four key components when assessing risk:

• Identification: Identifying potential risks and threats
• Assessment: Evaluating the likelihood and potential impact of identified risks
• Prioritization and Resource Allocation: Allocating resources to address high-priority risks
• Regulatory Response: Taking timely action to mitigate or eliminate identified risks

Meeting Global Standards

While Honduras’ financial markets are subject to unique conditions, the Authority’s risk-based approach ensures that its standards remain calibrated to meet the needs of both wholesale and domestic markets. The use of this framework has been widely praised by international standard-setting bodies.

A Firm but Fair Regulatory Environment

The Financial Services Authority of Honduras is committed to maintaining a firm but fair regulatory environment, one that supports the growth and stability of the country’s financial sector while protecting consumers and investors.