Liliendaal Declaration On The Financial Sector (new Framework For Financial Regulation And Supervision In The Region)

  We, the Heads of Government of the Caribbean Community at our Thirtieth Meeting in Liliendaal, Guyana, 2-5 July 2009, affirm our commitment to the principles and objectives of the Caribbean Community as embodied in the Revised Treaty of Chaguaramas establishing the Caribbean Community including the CARICOM Single Market and Economy;

Having experienced the negative fallout from the global financial and economic crisis, recognize the need to effect appropriate reform in our financial sector policy and the regional financial architecture;

We recognize that:

1. Enhancing national regulatory and supervisory systems, including rationalization and consolidation, is critical to ensuring safety, soundness and stability in the financial services sector.

2. Given the considerable degree of financial integration that exists in the Caribbean region as a result of both organic growth and mergers and acquisitions, intra industry cross-border supervision needs to be enhanced by the regional regulatory organizations – the Committee of Central Bank Governors (CCBG); the Caribbean Association of Insurance Regulators (CAIR); the Caribbean Group of Securities Regulators and the Regional Competition Commission.

3. The relatively high degree of financial integration requires regional solutions to financial problems. There is need for closer collaboration among the supervisory authorities in Caribbean jurisdictions whereby information can be shared regularly in order to address cross-border financial issues. In this regard we establish a College of Regulators.

4. Continued improvement in standards for disclosure, transparency and corporate governance for both public and private companies, is required for effective surveillance, regulation and supervision. It is important that, given the sensitive and cross-cutting nature of financial transactions, data and information be generated in a regular and timely manner.

5. Early warning systems, stress testing and the publication of financial soundness indicators are important for monitoring at the national and Regional levels in order to improve detection and assessment of threats to Regional financial stability. In this regard the Heads of Government fully support the initiatives of the Regional Central Banks through the Caribbean Centre for Money and Finance (CCMF) and the Caribbean Group of Banking Supervisors (CGBS) as well as the Caribbean Association of Insurance Regulators (CAIR), and the Caribbean Group of Securities Regulators.

6. The Region is particularly vulnerable to exogenous shocks and we are committed to strengthening the capacity of existing Regional agencies and mechanisms (such as the Caribbean Development Bank, Petroleum Fund, and CARICOM Development Fund) to perform both a developmental and stabilization role. Support and financing will be sought for the Regional institutions from the International Financial Institutions and the Multilateral Development Banks.

7. International Financial Centres in the Caribbean (and elsewhere) have recently been under intense pressure. In this regard, the Caribbean continues to enhance transparency and strengthen regulation of its international financial sector. Equally we call for equitable treatment in accord with that granted to the developed countries and other preferential jurisdictions.

8. The central role of the Council for Finance and Planning (COFAP) in ensuring coherence, coordination and harmonization in the development and integration of the regional financial system and in reporting on regulatory gaps and deficits. In this regard, we look forward to the finalisation of the CARICOM Financial Services Agreement (CFSA).

9. There is need to commit ourselves to a vigorous and intensive review of the workings of the regulatory and supervisory system.