Samoa: Financial Sector Assessment Program-Banking Supervision and Regulation-Technical Note

The main findings and recommendations here are based on selected Basel Core Principles. Given Samoa's small and simple banking sector, the assessment has identified BCPs for which further development of procedures and practices would be constructive and a priority. As such, the focus is on supervisory powers, resourcing levels, and the need for greater guidance from the supervisor to the industry on risk and its management. Little progress has been achieved towards implementing the recommendations of the 2007 BCP assessment. Initiatives by the Central Bank of Samoa (CBS) to deal with weaknesses identified in supervision and regulation of domestic banks in 2007 were disrupted by a series of natural disasters and the use of limited supervisory resources on other priorities. That said, progress was achieved in issues related to Anti-Money Laundering and Combating Financing of Terrorism (AML-CFT), with Samoa upgraded to a "normal reporting" regime by the Asia Pacific Group on Money Laundering ("APGML") in 2014, from its previous status of "enhanced reporting." Recommendations regarding the international banking sector, regulated and supervised by Samoa International Financial Authority (SIFA), still remain to be implemented. Over time, supervision and regulation of all financial intermediaries, including offshore banks, should be unified under the CBS.