Basis and criteria used as reference for development of change proposals In the view of the mission, the fundamental issues relating to the PNG financial sector regulatory architecture include: How best to position the PNG financial sector regulatory architecture for the future. The key considerations include the following: development needs (-financial literacy; financial inclusion.) PNG’s The proposal contains recommendations relating to consumer protection. Financial innovation: The proposal contains recommendations relating to capacity creation and development. One of the scale benefits should be a greater capacity to accommodate, cater for and deal with innovation. Technology: One of the scale benefits should be a greater capacity to gain access to, accommodate, cater for and deal with technology. International standards and sound practices: This is a key theme of the proposal. to overcome the shortcomings in coordination, cooperation and information exchange. to address the PNG capacity issue in relation to public policy development and its encapsulation in legislative, regulatory and supervisory frameworks, and day-to-day operations and supervision. to ensure that the PNG regulatory authorities are soundly financed, governed and resourced. Considerations regarding integration of regulatory authorities The following considerations arising from the implications of the change proposal were also taken into account: Role of the BPNG The question arises whether requiring the BPNG to discharge the mandate of an integrated prudential regulatory authority would be asking too much of the BPNG. An integrated financial sector architecture may impose a high demand on the BPNG. The AML/CFT, exchange control mandates already impose a heavy burden on the BPNG. In addition, the BPNG voluntarily has become the driver of the national financial inclusion strategy, is responsible for managing the national foreign exchange reserves, and will now be planning an important role in the PNG sovereign wealth fund. On the other hand, the needs
Basis and criteria used as reference for development of change proposals In the view of the mission, the fundamental issues relating to the PNG financial sector regulatory architecture include: How best to position the PNG financial sector regulatory architecture for the future. The key considerations include the following: PNG’s development needs (-financial literacy; financial inclusion.) The proposal contains recommendations relating to consumer protection. Financial innovation: The proposal contains recommendations relating to capacity creation and development. One of the scale benefits should be a greater capacity to accommodate, cater for and deal with innovation. Technology: One of the scale benefits should be a greater capacity to gain access to, accommodate, cater for and deal with technology. International standards and sound practices: This is a key theme of the proposal. to overcome the shortcomings in coordination, cooperation and information exchange. to address the PNG capacity issue in relation to public policy development and its encapsulation in legislative, regulatory and supervisory frameworks, and day-to-day operations and supervision. to ensure that the PNG regulatory authorities are soundly financed, governed and resourced. Considerations regarding integration of regulatory authorities The following considerations arising from the implications of the change proposal were also taken into account: Role of the BPNG The question arises whether requiring the BPNG to discharge the mandate of an integrated prudential regulatory authority would be asking too much of the BPNG. An integrated financial sector architecture may impose a high demand on the BPNG. The AML/CFT, exchange control mandates already impose a heavy burden on the BPNG. In addition, the BPNG voluntarily has become the driver of the national financial inclusion strategy, is responsible for managing the national foreign exchange reserves, and will now be planning an important role in the PNG sovereign wealth fund. On the other hand, the needs
PNG-FSDS-Regulatory-architecture.docx