The primary objective for the Financial Surveillance Division (FSD) is to maintain stability within the financial sector by ensuring effective supervision of supervised entities at a micro and macro level. To note, these entities include banks, bureau de change, financial leasing companies, non-deposit taking financial institutions, credit unions, payment system participants and Financial Market Infrastructures (FMI). The aim at a micro-prudential level is to promote the safety and soundness of supervised entities by conducting effective offsite monitoring and onsite examinations, ensuring an effective licencing process, and ensuring sound, robust and efficient payment systems. Moreover, the division aims to promote financial stability at a macro-prudential level by reviewing the trends over time within the financial sector and the inter play within the fiscal and real sector and their impact thereafter.
The division is divided into three sections with the following roles and functions:
a) Financial Regulation
Formulate, analyse and review legislations, associated regulations, circulars, guidelines and directives governing financial institutions in relation to banks, other financial institutions and payment systems;
Research, develop and formulate policy papers which effectively address regulatory and supervisory matters, legislative requirements, as well as improvements in procedures;
Administer prudential regulations aimed at ensuring the financial soundness of supervised entities, as well as any other legislations furthering this mandate;
Process licencing for banks, Bureau de Changes, leasing companies, and payment system providers;
Process applications for administrators and external auditors for financial institutions supervised by Central Bank;
Coordinate the division’s publications, such as annual reports.
Conduct onsite examination of financial institution in accordance with relevant legislations in order to ensure adherence to those legislations;
Prepare and analyse reports based on offsite surveillance to assess potential areas of risk in these institutions to be examined;
Identify weak and problematic areas in financial institution and make recommendations for corrective action;
Appraise the quality and competence of management, review adequacy of the system of internal controls of financial institutions;
Confirm compliance with the legislative framework, prudential regulations and other relevant directives;
Ensure offsite supervision of financial institutions to ensure that they are complying with regulatory and prudential requirements, and where necessary to recommend appropriate supervisory action or imposition of penalties for non-compliance;
Review and analyse the financial performance of financial institutions, identifying and quantifying key trends in their profitability, liquidity, solvency and other financial indicators;
Ensuring that timely and accurate financial and prudential returns are submitted by the financial institutions in line with the prevailing legislative framework;
Evaluate and analyse prudential returns and Financial Soundness Indicators of financial institutions and prepare monthly or ad hoc analyses/reports based on the soundness of these institutions.
c) Financial Stability
Assess the economy as a whole through returns gathered and stress test to analyze the effect on these institutions and the sector;
FMI oversight and risk analysis;
Update the Risk Assessment Matrix and review the level of risk to the whole economy;
Review the trends over time within the financial sector and the inter play within the fiscal and real sector;
Review the impact of the financial sector from a macro-economic perspective.