Partner Derek Rhodes provides a brief overview of the recently published results of last November’s IMF assessment of Jersey
Background
The assessment is part of a worldwide programme of country assessments carried out under the joint IMF and World Bank Financial Sector Assessment Programme; the previous assessment of Jersey was undertaken in 2002.
The main purpose of this assessment was to consider the “on-going refinement of the Jersey regulatory framework and the growth in the financial sector” since the last report. In addition, this assessment had a broader scope than that of the last one, covering not only the regulatory & supervisory system, but also undertaking an appraisal of the soundness of the financial system and its ability to cope with stress.
Headline Findings
The assessment is part of a worldwide programme of country assessments carried out under the joint IMF and World Bank Financial Sector Assessment Programme; the previous assessment of Jersey was undertaken in 2002.The main purpose of this assessment was to consider the “on-going refinement of the Jersey regulatory framework and the growth in the financial sector” since the last report. In addition, this assessment had a broader scope than that of the last one, covering not only the regulatory & supervisory system, but also undertaking an appraisal of the soundness of the financial system and its ability to cope with stress.
- Regulation and supervision of the financial sector are of a ‘high standard’ and ‘comply well’ with international standards
- Jersey’s banking system is resilient to a range of shocks and the financial soundness indicators for banks are satisfactory.
It is worth mentioning that where comparisons can be made with other jurisdictions:-
- Jersey ranks in the ‘top division’ of international finance centres, in line with those in the G20 and higher than most in the EU.
- Jersey is classed as being compliant or largely compliant with 44 of the 49 Financial Action task Force (FATF) recommendations [this compares with, for example, Singapore (43), the United States (43), the United Kingdom (36) and Switzerland (33)]. Furthermore, Jersey is one of only seven jurisdictions complying with 15 of the 16 ‘key’ FATF recommendations – the top rating so far attained.
Needless to say, politicians and senior members of Jersey’s finance community have welcomed the IMF findings, but they also recognise the need for the Industry to continue to maintain and enhance its adherence to international standards in an evolving global regulatory landscape.
From our own point of view, and importantly that of our clients and our UK and international business partners, it is comforting to know that a thorough, independent assessment of the Island’s finance industry has concluded that Jersey ranks at the highest level for the quality of its regulation, supervision and legislation and has a robust and resilient banking system.