Finance Centre Given 'Clean Bill Of Health'... IMF Sends Message Of Confidence To Isle Of Man Investors.

The International Monetary Fund - the most authoritative voice on world financial affairs - has given the Isle of Man 'a clean bill of health' with commendations for both the Financial Supervision Commission and the Insurance and Pensions Authority for the way in which they oversee the Island's finance sector.

Most importantly for investor confidence, the IMF says 'stress tests' confirmed the Isle of Man's banking system exhibits limited exposure to market shocks: 'The results indicate a very sound level of capitalization, which is encouraging.' Similarly, the insurance sector is found well regulated with 'considerable resilience against shocks'.

The report also commends the coverage provided by the Isle of Man's Depositors' Compensation Scheme, noting that it is 'unusually extensive for a small, internationally-orientated jurisdiction.'

The IMF team visited the Island last year as part of an international programme of inspections. In addition to the Island's defences against money laundering and terrorist financing, the IMF looked at the regulatory and supervisory system, the soundness of the financial system and its ability to cope with stress situations.

Amongst Top Countries The report concludes that the Island's financial services regime operates 'a high level of compliance with global standards of regulation and supervision.' This includes measures taken to combat money laundering and terrorist financing, moves the IMF says demonstrates the Isle of Man is amongst the top countries in the world in terms of implementing the recommendations of FATF - the global Financial Action Task Force.

It goes on: 'Finance sector regulation and supervision are generally of a high standard, and supervisory efforts are concentrated in those areas most relevant to the activities of the financial institutions on the Isle of Man.

'The mission conducted detailed assessments of observance of the Basel Committee Core Principles for Effective Banking Supervision (BCP), the International Association of Insurance Supervisors Insurance Core Principles (IAIS ICP), and the FATF 40+9 Recommendations on AML/CFT. The Isle of Man level of observance of these principles is high in terms of laws and regulations, supervisory implementation, and the practices of financial institutions.'

Supervisors Commended The IMF says the Isle of Man has maintained and improved on the generally high standard of compliance with international core principles, which was noted in the previous assessment in 2003. The IPA is commended for its proactive stance in establishing and enforcing high standards for supervision, which have contributed to 'the maintenance of the Isle of Man's good reputation as an international financial centre.'

The report continues: 'The Isle of Man has well-defined, transparent and effective policy, legal and institutional frameworks for insurance business and access to well-functioning financial markets. The jurisdiction benefits from the good availability of professional services locally and through access to the resources of major practices in the United Kingdom and elsewhere.

'The IPA is well-apprised of the importance of exchanging information with other supervisors, particularly given the significant presence of international groups on the Isle of Man.' And it concludes: 'The IPA conducts its functions in a transparent and accountable manner.'

'Serious Responsibility' The report goes on to note that the Isle of Man authorities take their responsibilities in respect of international co-operation seriously and adopt 'an overall constructive approach to all appropriate mutual legal assistance requests.'

Chief Minister Tony Brown said the latest IMF report provided a comprehensive, independent and expert endorsement of the quality of the Isle of Man's financial services regime. 'We in the Isle of Man have always worked hard to achieve a high level of compliance with international standards and will continue to do so as the standards evolve.'

The IMF report shows a level of compliance with the FATF recommendations to combat money laundering and the financing of terrorism that puts the Isle of Man in the upper levels of the 106 countries that have been assessed so far.

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