Regulatory Framework in Monaco: Banking Regulations and Ownership Restrictions

Monaco has established a robust regulatory framework to supervise and control credit institutions operating within its jurisdiction. The Autorité de Contrôle Prudentiel et de Résolution (ACPR) is responsible for ensuring that these institutions maintain the highest standards of stability and security.

Key Requirements

• Capital Adequacy: Credit institutions must meet specific capital requirements, including a total capital ratio of 8%, a common equity tier 1 capital ratio of 4.5%, and a tier 1 capital ratio of 6%.
• Capital Conservation Buffer: A capital conservation buffer of common equity tier 1 capital equal to 2.5% of the total risk exposure is mandatory.
• Risk Management: Institutions must implement robust risk management practices to ensure compliance with regulatory requirements.

Ownership and Control

While there are no formal restrictions on foreign ownership or the types of entities and individuals that can control a bank, the ACPR reserves the right to veto acquisitions if certain conditions are not met. This ensures that institutions remain financially stable and compliant with regulatory standards.

Implications and Responsibilities

• Disclosure Requirements: Controlling entities may be required to disclose information concerning their activity and governance.
• Shareholder Support: Shareholders may be solicited by the ACPR to provide financial support in case of a defaulting bank.