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Samoan Financial Supervision Department Expands Staff, Looks to Improve Oversight

The Samoan Financial Supervision Department (FSD) has added two new staff members to its team of six, bringing its total strength up to eight. This move is part of a broader plan to enhance the department’s capacity to oversee the country’s financial institutions.

Expanding Scope and Responsibilities

According to sources within the FSD, the additional staff will help the department deal with the expanding scope of supervisory responsibilities. Two senior supervisors have been allocated specific portfolios, overseeing commercial banks, insurance companies, and other non-bank financial institutions (NBFIs).

Ensuring Compliance with Financial Institutions Act

The FSD is responsible for ensuring that Samoan financial institutions comply with the country’s Financial Institutions Act (FIA). The act requires the Central Bank to issue licenses to financial institutions and undertake prudential supervision of licensed entities.

Supervision of Domestic Banks

The FSD has been working to strengthen its supervision of domestic banks. While most supervisory processes are conducted off-site, senior executives from the department meet with bank representatives on an as-needed basis. Banks are required to submit regular returns in both hard copy and PDF format, which are then analyzed for adherence to prudential standards.

Areas for Improvement

However, the FSD has acknowledged that its guidance to domestic banks is not aligned with current international standards. The department’s plan for 2014-2015 includes updating its prudential standards to meet global requirements.

Supervision of International Banks

In contrast, supervision of international banks in Samoa is minimal. The Samoan Insurance and Financial Authority (SIFA) receives quarterly reports from these institutions but does not provide more detailed guidance or oversight.

Challenges Ahead

Despite the challenges it faces, the FSD remains committed to improving the effectiveness of its supervision. The department is working to strengthen its capacity and address the gaps identified in its assessment report.

Conclusion

As Samoa continues to develop its financial sector, the FSD will play a critical role in ensuring the stability and integrity of the country’s banking system. With its expanded staff and commitment to improvement, the department is well-positioned to meet this challenge head-on.