Richard Doornbosch: Focused and intrusive - introducing a new style of supervision

Speech by Mr. Richard Doornbosch, President of the Centrale Bank van Curaçao en Sint Maarten, to the St. Maarten Bankers Association, Philipsburg, 25 March 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

Central bank speech  | 
25 March 2021

Ladies and gentlemen, dear Chairman, dear Derek,

It is a pleasure to be here with you today. Thank you very much for the opportunity to introduce and discuss our New Style of Supervision with you.

COVID-19 has hit us all hard. Our first priority now is -and should be- to protect lives and livelihoods. We expect GDP to contract in Sint Maarten by almost 26% in 2020. This year is not going to be much better, we project only a very small uptick in growth of 3,1% which is not going to be much of a relief. This is the very challenging context in which financial institutions need to operate and manage their risks.

In many advanced economies, financial institutions had repaired their balance sheets and increased capital in response to the global financial crisis. Financial institutions in our jurisdictions did not have a favorable starting position at the beginning of this crisis. Hurricanes, the economic crisis in Venezuela and de-risking by correspondent banks have led to sluggish returns and high operating costs in the decade up to the crisis. 

At the same time, we as a central bank were in the middle of a transition process when the crisis hit us. We were reviewing our objectives and responsibilities, the way we conduct supervision and our DNA as a supervisor. The crisis forced us to think through how COVID-19 impacted this transition process and the new style of supervision we were aiming for.

What I would like to do this morning is to share with you the main findings of the review and the paradigm shift we feel is needed to ensure we are achieving our objectives.