The Commissioner's role
1
First. The Commissioner role is to promote the general stability
and effective working of the banking system. He is responsible, among
other duties, for ensuring that authorized institutions are operated in a
responsible, honest and business-like manner. He is also to promote and
encourage proper standards of conduct and sound business practice among
these institutions.
It is necessary to spell out in the Bill these functions of the
Commissioner in order to make it clear that his role is greater than
merely one of checking that the institutions comply with the various
technical requirements. This reflects a different and up-to-date emphasis
in the approach to prudential supervision - one that is more flexible and
relies more on the Commissioner's discretion and qualitative judgment
than previously.
Some facile public comments on the Bill since it was gazetted
have focused on the Commissioner's powers. I should point out that the
existing legislation already gives very wide powers of discretion to the
·Commissioner. It could not be otherwise if he is to carry out effectively
his supervisory duties. These powers are in line with, indeed are modest
compared with, those which apply in other major banking centres.
Safeguards against abuses in the Commissioner's exercise of his
discretion are provided throughout the Bill - by way of appeals to the
Financial Secretary or to the Governor in Council. It is also proposed that
the Commissioner should provide an annual report to the Governor in
Council. The Governor in Council may, and I hope will, publish the report, in
part or in whole. The Commissioner would, where appropriate, include in
his report general guidelines on how his discretion has been or would be