Financial Crime World

Assessment of Banking Supervision Framework in Netherlands Antilles

Introduction

The Bank of the Netherlands Antilles (BNA) has been assessed on its compliance with the Basel Core Principles for Effective Banking Supervision. This assessment covers various aspects of banking supervision, including the authority responsible for granting and withdrawing banking licenses, powers to address compliance with laws and safety concerns, and legal protection for supervisors.

Key Findings

Authority and Powers

  • Granting and Withdrawing Banking Licenses: The BNA has the authority to grant and withdraw banking licenses.
  • Setting Prudential Rules: The BNA can set and amend prudential rules without changing laws, although it seeks views from sector representatives before introducing new regulations.
  • Taking Remedial Actions and Imposing Sanctions: The BNA can require banks to take prompt remedial actions and impose sanctions, including revocation of the banking license, for non-compliance.
  • Access to Bank Files: The BNA has unfettered access to banks’ files to review compliance with internal rules and limits as well as external laws and regulations.
  • Remedial Action and Sanctions: When a bank is not complying with laws or regulations, or is likely to be engaged in unsafe or unsound practices, the supervisor can take remedial action and/or impose sanctions.

Areas for Improvement

While general administrative and civil law precludes lawsuits against individual civil servants on the basis of good faith exercise of their duties, there is no explicit provision that provides protection for the supervisory agency or its staff. To strengthen the legal framework, authorities could consider:

  • Providing Explicit Legal Protection: Providing explicit legal protection for supervisors against lawsuits for actions taken in good faith.
  • Protecting Against Costs: Ensuring that supervisors are adequately protected against costs related to defending their actions.
  • Establishing Clear Guidelines and Procedures: Establishing clear guidelines and procedures for supervisors to follow when taking remedial action or imposing sanctions.

Conclusion

The assessment suggests that the Netherlands Antilles has made progress in establishing a suitable legal framework for banking supervision, but there is room for improvement in certain areas. Addressing these limitations will help strengthen the regulatory environment and ensure effective banking supervision.