Financial Institution Risk Assessments Crucial for Dominica’s Economic Stability
The Financial Services Unit (FSU) of the Commonwealth of Dominica has emphasized the importance of conducting thorough risk assessments in the financial sector to ensure stability and confidence in the economy. As a regulatory authority, the FSU is responsible for supervising and regulating all non-commercial bank financial institutions within the jurisdiction.
Importance of Risk Assessments
According to Mr. Claudius Lestrade, Director of the Financial Services Unit, the organization has developed an effective risk-based supervisory framework that has led to increased customer confidence in the sector. The FSU’s objectives include:
- Ensuring every financial institution conducts a thorough Anti-Money Laundering (AML) and Terrorist Financing (TF) risk assessment
- Developing policies and procedures to prevent and mitigate identified risks
- Taking action against persons carrying on unlicensed financial services business
Mandate of the Financial Services Unit
The FSU’s mandate stems from the FSU Act, which gives it responsibility to:
- Monitor financial institutions operating in Dominica
- Supervise licensees in accordance with relevant enactments
- Administer those enactments or any other relevant laws
Since its creation in 2008, the authority has taken significant steps to strengthen supervision of the non-commercial bank financial sector, including the introduction of a risk-based supervisory framework.
Designation as Money Laundering Supervisory Authority (MLSA)
In 2011, the FSU was designated as the MLSA under Section 7 of the Money Laundering Prevention Act No. 8. This move has enabled the authority to effectively supervise and regulate financial institutions in Dominica to prevent and mitigate money laundering and terrorist financing risks.
Role of the Financial Services Unit in Maintaining Economic Stability
Dominica’s financial services sector continues to grow, and while the jurisdiction welcomes new business, quality, quantity, and compliance remain the main denominators. The FSU plays a critical role in ensuring that financial institutions operating in Dominica adhere to relevant laws and regulations, thereby maintaining stability and confidence in the economy.
By conducting thorough risk assessments and implementing effective supervisory frameworks, the Financial Services Unit is committed to protecting the integrity of Dominica’s financial sector and maintaining economic stability.