Financial Crime World

Maintaining System Stability: The Crucial Role of Financial Regulatory Bodies in Trinidad and Tobago

In a bid to mitigate potential losses for depositors, policyholders, and pension plan members, financial regulatory bodies in Trinidad and Tobago have been working tirelessly to promote the stability of the country’s financial system. This article highlights the crucial role played by these bodies, particularly the Central Bank’s Financial Institution Supervision Department (FISD).

Promoting System Stability through Proactive Approach

The FISD, under the leadership of the Inspector of Financial Institutions (IOFI), is responsible for administering the Financial Institutions Act, 2008 and the Insurance Act, Chapter 84:01. The department’s primary objectives include:

  • Maintaining a robust legislative framework
  • Assessing financial institutions’ soundness
  • Promoting efficient and fair financial services markets
  • Enforcing regulatory laws and guidelines

Risk-Based Supervisory Framework

To achieve these goals, FISD employs a risk-based supervisory framework that involves:

  • On-site examinations
  • Off-site monitoring
  • Ad hoc analyses to assess the continued safety and soundness of regulated entities
  • Regular reviews and examinations to ensure compliance with regulatory requirements

Recommendations for New Regulations and Guidelines

FISD makes recommendations for the enactment of new regulations or guidelines to keep pace with local and international trends and the dynamic environment in which regulated entities operate. This proactive approach enables the department to stay ahead of potential risks and maintain a stable financial system.

Collaboration among Supervisory Authorities

The Central Bank is one of three supervisory authorities in Trinidad and Tobago, along with the Trinidad and Tobago Securities and Exchange Commission (TTSEC) and the Financial Intelligence Unit of Trinidad and Tobago (FIU). To ensure effective cooperation and information sharing among these authorities, bilateral Memoranda of Understanding were established in 2014 and reviewed in 2018. A multilateral Memorandum of Understanding was signed in July 2019 to formalize collaboration among the three authorities in areas such as money laundering and terrorism financing.

Operating Protocols for Enhanced Supervisory Practices

The Central Bank has established operating protocols for:

  • Information sharing
  • Coordinating supervisory activities
  • Undertaking collaborative work in matters of common interest

This comprehensive approach is expected to further strengthen financial stability in Trinidad and Tobago.

Learn More about the Supervisory Policies of the Central Bank

For more information on the Supervisory policies of the Central Bank, click [insert link].