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Banco de Cabo Verde: Regulating Capital Structure and Business Strategy in Cape Verde

Cape Verde’s central bank, Banco de Cabo Verde, is responsible for overseeing the country’s financial institutions and ensuring that they operate within a stable and secure environment. To achieve this goal, the bank has implemented various regulations and guidelines governing capital structure, business strategy, and related issues.

Acquisition of Equity Interests

Banco de Cabo Verde requires authorization from the central bank before any entity can acquire an equity interest in a company. This includes the purchase of shares, bonds, or other securities. The bank’s approval is necessary to ensure that the acquiring party does not pose a risk to the stability of the financial system.

Provision of Business Information

Financial institutions operating in Cape Verde are required to provide business information to Banco de Cabo Verde on a regular basis. This includes financial statements, balance sheets, and other relevant documents. The bank uses this information to monitor the financial health of these institutions and identify potential risks.

Rental of Safes and Custody of Securities

The rental of safes and custody of securities is another area regulated by Banco de Cabo Verde. The bank sets standards for the security and integrity of these services to prevent fraud and ensure that investors’ assets are protected.

Governing Bodies

Banco de Cabo Verde also regulates the composition of governing bodies, including management boards and supervisory boards. The bank requires members of these bodies to undergo special registration and meet certain qualifications and experience requirements.

Qualifying Holdings

A qualifying holding refers to a direct or indirect ownership of more than 5% of a financial institution’s share capital or voting rights. Any natural or legal person seeking to acquire or increase a qualifying holding must notify Banco de Cabo Verde in advance. The bank has the power to approve or reject such transactions based on its assessment of the proposed acquisition.

Banking System Indicators

To provide transparency and oversight, Banco de Cabo Verde publishes quarterly reports on the main financial and prudential indicators of credit institutions with general authorization (commercial banks). This information helps to monitor the health of the banking system and identify potential risks.

Microprudential Supervision Policy

The bank’s microprudential supervision policy aims to establish guidelines for the supervision of financial institutions. The policy is designed to ensure that these institutions operate safely and soundly, while also promoting financial stability in Cape Verde.

Conclusion

In conclusion, Banco de Cabo Verde plays a crucial role in regulating the country’s financial sector, ensuring that entities operating within it comply with relevant laws and regulations. By implementing strict guidelines and monitoring their adherence, the bank helps to maintain a stable and secure environment for investors and consumers alike.