Jeremy Cox, CEO of the Bermuda Monetary Authority speaking about the change in financial regulation and its impact on the Island's markets.  There has never been a more important time for Bermuda to take part in international regulation with greater expectations placed on regulators to keep up with the latest developments in the global marketplace.

Mr. Cox said the most recent challenges facing Bermuda included multiple external reviews of offshore centres promulgated by onshore jurisdictions, increasing demands for higher regulatory standards internationally, and of the global financial crisis.  He added that there was still plenty of debate and speculation around everything from growing demands for standardisation in financial regulation globally to US President Barack Obama's announcement last week of tax plans for non-US insurer subsidiaries.  I have been a regulator for almost 20 years and this has certainly been one of the most challenging periods anyone in this field has faced worldwide," he said.

Mr. Cox said the BMA's role was to help ensure Bermuda continued to withstand the challenges facing the financial sector and its regulation, contributing to the continued success, integrity and good standing of the jurisdiction.   He said the Authority had to be a regulator for all seasons, through periods of economic contraction as well as expansion, focusing on making changes to the Island's regulatory framework to both address and anticipate change through its business plan.

Among the most notable achievements, Mr. Cox said the BMA had implemented significant policy and resource developments over the past year, against the backdrop of an unprecedented level of turmoil in global markets, including strengthening key aspects of its supervisory regimes, including its detailed on-site inspection programme for financial firms, and expanding its powers for supervising firms in respect to anti-money laundering, via a dedicated Anti-Money Laundering (AML) unit within the Authority.  It also managed to enhance its supervision of those sectors most impacted by the financial crisis - in particular the banks - to mitigate the effect of the crisis using proactive measures that have supported market stability, while continuing to build its resources and expertise in order to expand its effectiveness as supervisors and further develop Bermuda's regulatory framework; and making considerable progress in preparing Bermuda for regulatory equivalence under Europe's Solvency II Directive, according to Mr. Cox.

Another key aspect of the BMA's work, said Mr. Cox, was its high level of engagement, and active participation, in the work of international standard setting bodies, as financial regulators consider the implications of the resulting comprehensive proposals for global regulatory reforms being developed in response to the crisis, which are being led by groups such as the Group of 20 and the Financial Stability Board.   He added that the Authority now represented Bermuda at the decision-making level in the International Association of Insurance Supervisors, which sets the global standards for insurance supervision on which regulators base their national frameworks.  "It has possibly never been more important for us to be so involved in the international regulatory arena," he said. "We like other regulators are keenly aware of the recalibration and reforms taking place internationally, which are relevant to our markets.   "Similarly, there are continuing changes in the sophisticated business models in the financial markets we all regulate that are becoming even more complex. What is very clear to everyone who is participating in this space is that no-one can stand still and expect to apply, or be subject to, the same rules and regulations without any regard to what is happening internationally.

"Expectations on regulators are much higher now, since the general feeling has been that regulation internationally did not keep pace with the changes and complexities of products in global markets. This was the case even prior to the financial crisis; the dislocation in the global economy and its dramatic after-effects over the past two years has simply added greater impetus to international regulatory changes." During 2010 the Authority also plans to build on its recently established AML and Anti-Terrorism Financing supervisory and enforcement programme, while it also intends to place further emphasis on consumer protection following events last year in the local markets that had a direct impact on retail consumers of financial products. Last year, the BMA made public some of the enforcement actions it implemented with a number of local firms in the insurance and investment sectors, most prominently in the cases of the Bermuda branch of British American and the Emerald Financial Group in order to protect local clients.

"The BMA has been a constant throughout challenging periods of significant change in Bermuda - and we are still evolving to meet the demands and scrutiny being placed on financial regulators globally," Mr. Cox said. "The Authority has effectively played a pivotal role to support the ultimate protection of Bermuda, a responsibility that has grown more important in an increasingly volatile global economy and ever-changing international regulatory environment.  "It is a responsibility I and my team at the Authority take very seriously, and one which we intend to keep conducting effectively as we move into another phase of development."