To become a leading regulator the Bermuda Monetary Authority must continue to build and retain highly skilled staff across a variety of disciplines, the International Monetary Fund has urged as one of its key recommendations in a report on the Island's financial sector released last week.

In the IMF's eight recommendations for the Island, the BMA's role is central with the international organisation also calling for the Authority to be given more power to intervene in case of troubled banks and six recommendations centring around it oversight of the insurance industry.

"The BMA has already made considerable effort and progress in increasing skilled staff," the report noted. "However, to meet the standard of a leading regulator, the BMA must continue to work to attract and retain a range of skilled staff."

The authority's role is vast, with it supervising "insurance, banks, trust and investment businesses, collective investment schemes, the BSX and the credit union" as well as issuing the Bermuda dollar.

The BMA pointed out that it has already boosted staffing to its insurance and banking, trust and investment supervisory teams, has added a independent risk and policy unit and set up a dedicated in-house actuarial unit.

Its insurance department had grown to 50 staff members by July 2007 — up from 17 in 2003, when the IMF conducted its last assessment of the Island.

In the 2003 report, the IMF found "some deficiencies were noted in insurance supervision — the ample powers of the BMA had not been fully realised". But on its more recent visits it was found to have been greatly improved with the BMA having improved its oversight of insurers, trusts and securities as well as taken a pro-active approach to the sub-prime crisis.

Also to be added to the BMA's staff at the IMF's behest will be a coordinator for anti-money laundering and countering the financing of terrorism efforts (AML/CFT). Failing to keep pace on AML/CFT measures was the IMF's main criticism about the Bermuda financial sector in the report issued last Friday.

"Authorities have approved the establishment of a National AML/CFT Coordinator to supplement the NAMLC (National Anti-Money Laundering Committee), reflecting an important recommendation of the assessors with a view to ensuring the most effective liaison between all the relevant agencies and providing enhanced impetus to our efforts," the BMA said in its response to the assessors section of the IMF report.

The BMA also noted it continues to build capability through a combination of a recruitment, outsourcing and training of existing staff.