## _cr04366 — Basel Core Principles (Offshore Banking)

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---

### General
- Report on the Observance of Standards and Codes (ROSC) for the Basel Core Principles for Effective Bank Supervision for the offshore sector of Antigua and Barbuda.
- Prepared by a staff team of the International Monetary Fund as part of the Eastern Caribbean Currency Union Financial Sector Assessment Program and as background documentation for the periodic consultation with the member country.
- Based on information available at the time it was completed on November 16, 2004.
- Mission conducted from February 23 to March 5, 2004.

### Institutional and macroprudential setting, market structure—Overview
- Antigua and Barbuda is part of the Eastern Caribbean Currency Union (ECCU) comprising eight members: Anguilla, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines.
- There are 16 offshore banks licensed in Antigua and Barbuda.
- Aggregated assets of the offshore banking sector totaled about US$ 3.0 billion, equivalent in size to about 4 times GDP, as at December 2002.
- The largest bank represents 61 percent of the sector’s aggregated assets.
- Investment portfolios represent the bulk of banks’ assets and are predominantly composed of government and corporate bonds and equities.
- Loan portfolios include a number of large exposures, some exceeding 25 percent of capital, and/or connected party loans.
- Some banks reportedly carry substantial investments in local real estate projects.
- Loans frequently collateralized by cash, CDs, and equities (“back-to-back lending”).
- Reported non-performing loans are low.
- Some banks appear to undertake substantial derivative transactions but no data available at time of report to substantiate extent of exposure.
- Two licensed banks accept deposits only from within their groups (captive banks); one appears to be a special purpose vehicle set up to finance a single investment and reports little or no activity on income statements.
- Number of licensed offshore banks substantially reduced following strengthening of regulatory requirements: minimum paid up capital (US$5 million), minimum equity to assets (5.0 percent), connected lending, and physical presence; stronger anti-money laundering regime also contributed to decline.
- Commission advised that new guidelines and regulations were issued subsequent to the mission’s on-site work.

### General preconditions for effective banking supervision
- The Commission’s functions and responsibilities are set out in the IBC Act.
- The Office of National Drug Control Policy (ONDCP) is the authority responsible for implementation of AML/CFT measures and works in close collaboration with the Commission.
- The mission found no significant evidence of government interference in prudential regulation and supervision, but noted appointment procedures that could allow inappropriate interference (appointment of Supervisor requiring Minister approval).
- Financial resources of the Commission appear adequate; staff skills and training are intensively addressed.
- Legal protection for the supervisory agency and its staff against lawsuits for actions while discharging duties in good faith was provided subsequent to the mission’s on-site work.
- An effective information sharing agreement is needed with the ECCB due to existence of affiliated domestic and offshore banks.
- Regulations issued (April 2004) empower the Commission to require a regulated entity to furnish relevant information regarding related companies; Commission reports legal authority to share information with foreign regulatory authorities.

### Main findings
- Objectives, Autonomy, Powers, and Resources (CP 1)
  - Framework for prudential regulation provided by the IBC Act, Statutory Instruments, and supervisory practices.
  - Concern: requirement that appointment of the Supervisor of International Banks be approved by the Minister gives Minister de facto control over multiple layers of appointments; recommendation to strengthen security of tenure in law (similar to Director and Deputy Director of ONDCP).
  - IBC Act empowers the Supervisor to require immediate remedial measures when a bank is carrying on business unlawfully or is in unsound financial condition.
  - Subsequent to mission, legal protection for supervisory staff was provided and regulations empower the Commission to require information on related companies.

- Licensing and Structure (CPs 2–5)
  - Recommendation: clearly define permissible activities of banks licensed and subject to supervision, particularly restrictions on captive banks accepting third-party deposits.
  - License application requires extensive information; minimum capital requirement US$5.0 million.
  - Commission revised procedures to require more information about financial strength of shareholders and to strengthen review of proposed strategic and operational plans, especially corporate governance.
  - Anomalous situation of captive banks needs resolution: either require full prudential requirements or a separate class of license prohibiting third-party deposits; require disclosure of status to external counterparties.
  - Regulations require prior approval from the Commission for changes to board or ownership of five percent or more of a class of shares.
  - Recent regulations define types and amounts of acquisitions and investments requiring supervisory approval.

- Prudential Regulations and Requirements (CPs 6–15)
  - Commission increased minimum fully paid-up capital and introduced a 5 percent minimum equity to assets requirement, which reduced the number of bank licenses and acted as barrier to de novo banking.
  - Regulations amended to provide for a capital charge for market risk; Commission encouraged to introduce a more complete risk-based minimum capital requirement consistent with the Basel Capital Accord.
  - Comprehensive guideline on Investment and Lending recently issued covering policies, practices, procedures, connected lending, and conflict of interest identification; new regulatory limit on large exposures introduced.
  - Recent regulation establishes that lending to connected parties should take place on an arm’s length basis, free of pressure or conflict of interest.
  - Commission issued guidelines on management of interest rate, liquidity and operational risk and intends to issue detailed guidelines on market risk; encouraged prompt implementation and separate guidance on other risk types.
  - Commission stepped up regulatory system and supervisory efforts to address money laundering risk.

- Methods of Ongoing Supervision (CPs16–20)
  - New quarterly reporting forms recently implemented; too early to confirm full compliance and timeliness by all banks.
  - Commission’s database needs upgrade to facilitate monitoring and compatibility with new reporting formats.
  - Commission decided to implement regular meetings with bank senior and middle management based on risk profile to discuss strategy, group structure, corporate governance, performance, capital adequacy, liquidity, asset quality, risk management systems, etc.
  - Recommendation to strengthen required background, experience, and duties of the resident Senior Officer (required as of July 2002) for banks with only a basic physical presence.
  - Supervisor granted authority to evaluate risks from non-banking activities and to establish principles and norms regarding accounting techniques and consolidation of accounts, requiring development of supervisory processes for group awareness.

- Formal Powers of Supervisors (CP21–22)
  - Supervisor granted power to require banks’ annual audited financial statements be based on accounting principles and rules that command wide international acceptance and audited in accordance with internationally accepted auditing practices and standards.
  - Subsequent to the mission, Superintendent granted authority to apply penalties to management and/or the board of directors under certain circumstances, including monetary penalties and sanctions.

- Cross-Border Banking (CPs 23–25)
  - Restricted application of these principles since banks licensed under the IBC Act have no foreign branches or subsidiaries, though management and representative offices are located abroad.
  - Commission examines foreign operations of licensed banks aided by MoUs with certain foreign supervisory authorities.

### Recommended action plan (select entries)
- 1.2 Independence: The security of tenure provided in law to the senior management of the Commission should be strengthened.
- 1.6 Information sharing: Implement an effective system of cooperation and information sharing between the ECCB and the Commission.
- 2. Permissible activities: Consider making the definition of bank clearer and more explicit; clearly define permissible activities of licensed banks, with reference to restrictions on captive banks accepting third-party deposits.
- 3. Licensing: Apply the recently revised licensing procedures in practice at the first opportunity; address captive bank concerns in licensing procedures and/or regulations.
- 5. Investment criteria: Fully implement the new regulation and guideline governing investment criteria.
- 6. Capital adequacy:
  - Establish a definition of capital, a method of calculation and the ratio required not lower (more lenient) than established in the Basel Capital Accord, and grant the Commission the power to impose a higher capital ratio;
  - Require that the capital adequacy ratio be calculated and applied on a consolidated bank basis, where applicable;
  - Require at least semi-annually capital adequacy reporting by banks to the supervisor.
- 7. Credit policies: Fully implement the credit policy requirements of the recently finalized Investment and Lending guideline; supervisor should verify periodically that banks make credit decisions free of conflicting interests.
- 8. Loan evaluation and loan-provisioning: Fully implement loan evaluation and loan loss provisioning requirements of the recently finalized Investment and Lending guideline; consider introducing a requirement for a general provision for loss.
- 9. Large exposures limits: Fully implement the large exposure limits set out in the recently finalized Investment and Lending guideline, and without undue forbearance.
- 10. Connected lending: Fully implement the connected lending restrictions set out in the recently finalized Investment and Lending guideline, and without undue forbearance.

### Supervisory recommendations (by Reference Principle) — Section 2 highlights
- 12. Market risk
  - Determine that banks have set appropriate limits for various market risks, including their foreign exchange business.
  - Determine that banks perform scenario analysis, stress testing and contingency planning, as appropriate, and periodic validation or testing of the systems used to measure market risk.
  - Have the expertise needed to monitor the actual level of complexity in the market activities of banks.

- 13. Other risks
  - The supervisor should assess compliance with the recently issued guidelines on risk management processes.

- 14. Internal control and audit
  - Amend the draft guideline to reflect the changes to Section 65 of the IBC Act, and fully implement the new requirements in practice.

- 16. On-site and off-site supervision
  - Create a database that facilitates monitoring trends and developments for the banking sector as a whole.
  - Ensure that the new quarterly reporting system is providing the required information in a timely manner.

- 17. Bank management contacts
  - Fully implement a program of regular meetings with senior and middle management to discuss operational matters such as strategy, group structure, corporate governance, performance, capital adequacy, liquidity, asset quality, risk management systems, etc.
  - Ensure that the supervisor is being notified by the banks in a timely manner of any substantive changes in their activities or any material adverse developments, including breaches of legal and prudential requirements generally.
  - Strengthen required background, experience and duties of the resident Senior Officer (required as of July 2002) for those banks that have only a basic physical presence in Antigua and Barbuda.

- 18. Off-site supervision
  - Ensure that the new quarterly reporting system is providing the required information in a timely manner, including information on on- and off-balance sheet exposures, assets and liabilities, profit and loss, capital adequacy, liquidity, large exposures, loan loss provisioning, market risk and deposit sources.
  - Implement an analytical framework that uses the statistical and prudential information for the ongoing monitoring of the condition and performance of individual banks.

- 19. Validation of supervisory information
  - Fully implement the plan to hold meetings with banks and their auditors to discuss the results of work by the external auditors and to agree on the responsibilities for any corrective work.

- 20. Consolidate supervision
  - Fully implement the new powers granted the supervisor to evaluate the risks that non-banking activities conducted by a bank or banking group may pose to the bank or banking group.
  - Develop supervisory routines to ensure awareness of the overall structure of banking organizations (i.e., the bank and its subsidiaries) or groups and an understanding of the activities of all material parts of these groups, including those that are supervised directly by other agencies.

- 21. Accounting standards
  - Fully implement the requirements of the recently enacted legislation.

- 22. Remedial measures
  - Implement the new powers in practice as/when the situation warrants.
  - Consider amending the law so that supervisory action taken under Section 261 of the IBC Act is not suspended, or at least not wholly suspended, pending the outcome of an appeal.

### Authorities’ response to the assessment
- After the mission in March 2004, the authorities have undertaken a wide range of legislative, regulatory and supervisory steps to improve the offshore banking supervisory regime and expressed commitment to fully implement the Basel Core Principles for Effective Banking Supervision in a time bound manner.
- While noting that the mission has downgraded the ratings against four principles, after issuing the first report, without any change in the facts and circumstances, the jurisdiction’s response on key issues follows:
  - While not agreeing that the existing laws foster “significant interference” from the political directorate with respect to the management of FSRC, the authorities have nonetheless undertaken to revisit this matter.
  - While disagreeing with the mission’s assessment of information-sharing, in view of clear legal powers to share information with other supervisors and seek information on banks’ affiliates, FSRC is nonetheless finalizing a MOU with ECCB. FSRC does not view the absence of MOU as an impediment to information sharing since: (1) FSRC has been sharing information and cooperating with other supervisors, including the ECCB, even without a MOU; and (2) FSRC is not dependent on ECCB for information because of its powers (already being exercised) to seek information about their related companies directly from the offshore banks.
  - Revised procedures are already being applied to new license applications. FSRC is considering introduction of a separate licensing category for captive banks.
  - FSRC will implement a risk-based capital regime incorporating capital charges for credit and market risks, in consultation with regional supervisors.
  - Revised bank examination procedures include a review of the recently issued Investment and Lending Guidelines that address credit policies, loan evaluation and loan loss provisioning, large exposure limits, and connected lending. FSRC will implement a requirement for general loss provisions.
  - New quarterly bank reports will be effective from fourth quarter ending December 2004, which should facilitate monitoring of trends and developments in the offshore banking sector.

*Source: _cr04366 - Section 2*

### Section 1

### I. BASEL CORE PRINCIPLES (OFFSHORE BANKING)

### General
- Report on the Observance of Standards and Codes (ROSC) for the Basel Core Principles for Effective Bank Supervision for the offshore sector of Antigua and Barbuda.
- Prepared by a staff team of the International Monetary Fund as part of the Eastern Caribbean Currency Union Financial Sector Assessment Program and as background documentation for the periodic consultation with the member country.
- Based on information available at the time it was completed on November 16, 2004.
- Mission conducted from February 23 to March 5, 2004.

### Institutional and macroprudential setting, market structure—Overview
- Antigua and Barbuda is part of the Eastern Caribbean Currency Union (ECCU) comprising eight members: Anguilla, Dominica, Grenada, Montserrat, St. Kitts and Nevis, St. Lucia, and St. Vincent and the Grenadines.
- There are 16 offshore banks licensed in Antigua and Barbuda.
- Aggregated assets of the offshore banking sector totaled about US$ 3.0 billion, equivalent in size to about 4 times GDP, as at December 2002.
- The largest bank represents 61 percent of the sector’s aggregated assets.
- Investment portfolios represent the bulk of banks’ assets and are predominantly composed of government and corporate bonds and equities.
- Loan portfolios include a number of large exposures, some exceeding 25 percent of capital, and/or connected party loans.
- Some banks reportedly carry substantial investments in local real estate projects.
- Loans frequently collateralized by cash, CDs, and equities (“back-to-back lending”).
- Reported non-performing loans are low.
- Some banks appear to undertake substantial derivative transactions but no data available at time of report to substantiate extent of exposure.
- Two licensed banks accept deposits only from within their groups (captive banks); one appears to be a special purpose vehicle set up to finance a single investment and reports little or no activity on income statements.
- Number of licensed offshore banks substantially reduced following strengthening of regulatory requirements: minimum paid up capital (US$5 million), minimum equity to assets (5.0 percent), connected lending, and physical presence; stronger anti-money laundering regime also contributed to decline.
- Commission advised that new guidelines and regulations were issued subsequent to the mission’s on-site work.

### General preconditions for effective banking supervision
- The Commission’s functions and responsibilities are set out in the IBC Act.
- The Office of National Drug Control Policy (ONDCP) is the authority responsible for implementation of AML/CFT measures and works in close collaboration with the Commission.
- The mission found no significant evidence of government interference in prudential regulation and supervision, but noted appointment procedures that could allow inappropriate interference (appointment of Supervisor requiring Minister approval).
- Financial resources of the Commission appear adequate; staff skills and training are intensively addressed.
- Legal protection for the supervisory agency and its staff against lawsuits for actions while discharging duties in good faith was provided subsequent to the mission’s on-site work.
- An effective information sharing agreement is needed with the ECCB due to existence of affiliated domestic and offshore banks.
- Regulations issued (April 2004) empower the Commission to require a regulated entity to furnish relevant information regarding related companies; Commission reports legal authority to share information with foreign regulatory authorities.

### Main findings
Objectives, Autonomy, Powers, and Resources (CP 1)
- Framework for prudential regulation provided by the IBC Act, Statutory Instruments, and supervisory practices.
- Concern: requirement that appointment of the Supervisor of International Banks be approved by the Minister gives Minister de facto control over multiple layers of appointments; recommendation to strengthen security of tenure in law (similar to Director and Deputy Director of ONDCP).
- IBC Act empowers the Supervisor to require immediate remedial measures when a bank is carrying on business unlawfully or is in unsound financial condition.
- Subsequent to mission, legal protection for supervisory staff was provided and regulations empower the Commission to require information on related companies.

Licensing and Structure (CPs 2–5)
- Recommendation: clearly define permissible activities of banks licensed and subject to supervision, particularly restrictions on captive banks accepting third-party deposits.
- License application requires extensive information; minimum capital requirement US$5.0 million.
- Commission revised procedures to require more information about financial strength of shareholders and to strengthen review of proposed strategic and operational plans, especially corporate governance.
- Anomalous situation of captive banks needs resolution: either require full prudential requirements or a separate class of license prohibiting third-party deposits; require disclosure of status to external counterparties.
- Regulations require prior approval from the Commission for changes to board or ownership of five percent or more of a class of shares.
- Recent regulations define types and amounts of acquisitions and investments requiring supervisory approval.

Prudential Regulations and Requirements (CPs 6–15)
- Commission increased minimum fully paid-up capital and introduced a 5 percent minimum equity to assets requirement, which reduced the number of bank licenses and acted as barrier to de novo banking.
- Regulations amended to provide for a capital charge for market risk; Commission encouraged to introduce a more complete risk-based minimum capital requirement consistent with the Basel Capital Accord.
- Comprehensive guideline on Investment and Lending recently issued covering policies, practices, procedures, connected lending, and conflict of interest identification; new regulatory limit on large exposures introduced.
- Recent regulation establishes that lending to connected parties should take place on an arm’s length basis, free of pressure or conflict of interest.
- Commission issued guidelines on management of interest rate, liquidity and operational risk and intends to issue detailed guidelines on market risk; encouraged prompt implementation and separate guidance on other risk types.
- Commission stepped up regulatory system and supervisory efforts to address money laundering risk.

Methods of Ongoing Supervision (CPs16–20)
- New quarterly reporting forms recently implemented; too early to confirm full compliance and timeliness by all banks.
- Commission’s database needs upgrade to facilitate monitoring and compatibility with new reporting formats.
- Commission decided to implement regular meetings with bank senior and middle management based on risk profile to discuss strategy, group structure, corporate governance, performance, capital adequacy, liquidity, asset quality, risk management systems, etc.
- Recommendation to strengthen required background, experience, and duties of the resident Senior Officer (required as of July 2002) for banks with only a basic physical presence.
- Supervisor granted authority to evaluate risks from non-banking activities and to establish principles and norms regarding accounting techniques and consolidation of accounts, requiring development of supervisory processes for group awareness.

Formal Powers of Supervisors (CP21–22)
- Supervisor granted power to require banks’ annual audited financial statements be based on accounting principles and rules that command wide international acceptance and audited in accordance with internationally accepted auditing practices and standards.
- Subsequent to the mission, Superintendent granted authority to apply penalties to management and/or the board of directors under certain circumstances, including monetary penalties and sanctions.

Cross-Border Banking (CPs 23–25)
- Restricted application of these principles since banks licensed under the IBC Act have no foreign branches or subsidiaries, though management and representative offices are located abroad.
- Commission examines foreign operations of licensed banks aided by MoUs with certain foreign supervisory authorities.

### Recommended action plan and authorities’ response to the assessment
- Table 1: Recommended Action Plan to Improve Compliance of the Basel Core Principles (select entries reproduced as recommendations)
  - 1.2 Independence: The security of tenure provided in law to the senior management of the Commission should be strengthened.
  - 1.6 Information sharing: Implement an effective system of cooperation and information sharing between the ECCB and the Commission.
  - 2. Permissible activities: Consider making the definition of bank clearer and more explicit; clearly define permissible activities of licensed banks, with reference to restrictions on captive banks accepting third-party deposits.
  - 3. Licensing: Apply the recently revised licensing procedures in practice at the first opportunity; address captive bank concerns in licensing procedures and/or regulations.
  - 5. Investment criteria: Fully implement the new regulation and guideline governing investment criteria.
  - 6. Capital adequacy: Establish a definition of capital, a method of calculation and the ratio required not lower (more lenient) than established in the Basel Capital Accord, and grant the Commission the power to impose a higher capital ratio; require that the capital adequacy ratio be calculated and applied on a consolidated bank basis, where applicable; require at least semi-annually capital adequacy reporting by banks to the supervisor.
  - 7. Credit policies: Fully implement the credit policy requirements of the recently finalized Investment and Lending guideline; supervisor should verify periodically that banks make credit decisions free of conflicting interests.
  - 8. Loan evaluation and loan-provisioning: Fully implement loan evaluation and loan loss provisioning requirements of the recently finalized Investment and Lending guideline; consider introducing a requirement for a general provision for loss.
  - 9. Large exposures limits: Fully implement the large exposure limits set out in the recently finalized Investment and Lending guideline, and without undue forbearance.
  - 10. Connected lending: Fully implement the connected lending restrictions set out in the recently finalized Investment and Lending guideline, and without undue forbearance.

*INTERNATIONAL MONETARY FUND — ANTIGUA AND BARBUDA: Report on the Observance of Standards and Codes: Basel Core Principles for Effective Banking Supervision—Offshore Banking. Prepared by the Monetary and Financial Systems Department. Approved by Stefan Ingves and Anoop Singh. November 16, 2004.*

### Section 2

### _cr04366 - Section 2

### Supervisory recommendations (by Reference Principle)
- 12. Market risk
  - Determine that banks have set appropriate limits for various market risks, including their foreign exchange business.
  - Determine that banks perform scenario analysis, stress testing and contingency planning, as appropriate, and periodic validation or testing of the systems used to measure market risk.
  - Have the expertise needed to monitor the actual level of complexity in the market activities of banks.

- 13. Other risks
  - The supervisor should assess compliance with the recently issued guidelines on risk management processes.

- 14. Internal control and audit
  - Amend the draft guideline to reflect the changes to Section 65 of the IBC Act, and fully implement the new requirements in practice.

- 16. On-site and off-site supervision
  - Create a database that facilitates monitoring trends and developments for the banking sector as a whole.
  - Ensure that the new quarterly reporting system is providing the required information in a timely manner.

- 17. Bank management contacts
  - Fully implement a program of regular meetings with senior and middle management to discuss operational matters such as strategy, group structure, corporate governance, performance, capital adequacy, liquidity, asset quality, risk management systems, etc.
  - Ensure that the supervisor is being notified by the banks in a timely manner of any substantive changes in their activities or any material adverse developments, including breaches of legal and prudential requirements generally.
  - Strengthen required background, experience and duties of the resident Senior Officer (required as of July 2002) for those banks that have only a basic physical presence in Antigua and Barbuda.

- 18. Off-site supervision
  - Ensure that the new quarterly reporting system is providing the required information in a timely manner, including information on on- and off-balance sheet exposures, assets and liabilities, profit and loss, capital adequacy, liquidity, large exposures, loan loss provisioning, market risk and deposit sources.
  - Implement an analytical framework that uses the statistical and prudential information for the ongoing monitoring of the condition and performance of individual banks.

- 19. Validation of supervisory information
  - Fully implement the plan to hold meetings with banks and their auditors to discuss the results of work by the external auditors and to agree on the responsibilities for any corrective work.

- 20. Consolidate supervision
  - Fully implement the new powers granted the supervisor to evaluate the risks that non-banking activities conducted by a bank or banking group may pose to the bank or banking group.
  - Develop supervisory routines to ensure awareness of the overall structure of banking organizations (i.e., the bank and its subsidiaries) or groups and an understanding of the activities of all material parts of these groups, including those that are supervised directly by other agencies.

- 21. Accounting standards
  - Fully implement the requirements of the recently enacted legislation.

- 22. Remedial measures
  - Implement the new powers in practice as/when the situation warrants.
  - Consider amending the law so that supervisory action taken under Section 261 of the IBC Act is not suspended, or at least not wholly suspended, pending the outcome of an appeal.

### Authorities’ response to the assessment
- After the mission in March 2004, the authorities have undertaken a wide range of legislative, regulatory and supervisory steps to improve the offshore banking supervisory regime and expressed commitment to fully implement the Basel Core Principles for Effective Banking Supervision in a time bound manner.
- While noting that the mission has downgraded the ratings against four principles, after issuing the first report, without any change in the facts and circumstances, the jurisdiction’s response on key issues follows:
  - While not agreeing that the existing laws foster “significant interference” from the political directorate with respect to the management of FSRC, the authorities have nonetheless undertaken to revisit this matter.
  - While disagreeing with the mission’s assessment of information-sharing, in view of clear legal powers to share information with other supervisors and seek information on banks’ affiliates, FSRC is nonetheless finalizing a MOU with ECCB. FSRC does not view the absence of MOU as an impediment to information sharing since: (1) FSRC has been sharing information and cooperating with other supervisors, including the ECCB, even without a MOU; and (2) FSRC is not dependent on ECCB for information because of its powers (already being exercised) to seek information about their related companies directly from the offshore banks.
  - Revised procedures are already being applied to new license applications. FSRC is considering introduction of a separate licensing category for captive banks.
  - FSRC will implement a risk-based capital regime incorporating capital charges for credit and market risks, in consultation with regional supervisors.
  - Revised bank examination procedures include a review of the recently issued Investment and Lending Guidelines that address credit policies, loan evaluation and loan loss provisioning, large exposure limits, and connected lending. FSRC will implement a requirement for general loss provisions.
  - New quarterly bank reports will be effective from fourth quarter ending December 2004, which should facilitate monitoring of trends and developments in the offshore banking sector.

*Source: _cr04366 - Section 2*

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_Source: https://www.imf.org/-/media/websites/imf/imported-full-text-pdf/external/pubs/ft/scr/2004/_cr04366.pdf_