The Bahamas: Operationalizing the New Bank Resolution Framework and Amended Deposit Insurance Legislation - Second Mission

This technical assistance report on The Bahamas focuses on operationalizing the new bank resolution framework and amended deposit insurance legislation-second mission. The Bahamas has made considerable progress in developing the legal framework, infrastructure, and key tools for an effective bank recovery and resolution regime and is taking steps to operationalize the regime. Effective operationalization of the resolution regime will also require review and reform in other key framework areas, including contingency arrangements for public resolution funding if required, fully implementing the deposit insurance system, and establishing a program of regular testing. Strengthening and updating the supervisory early intervention and recovery planning frameworks and requirements are critical to maintaining financial system stability in the context of acknowledged limits of the structure and depth of the financial system that, in turn, constrain resolution options. Enhancement of the underpinning legislation is recommended to support building out and implementing the operational infrastructure for bank resolution.