A bill that will give concerned authorities in Seychelles a clear mandate and power to promote the stability of the financial system was approved by the National Assembly on Monday.

The Financial Stability Bill was presented by Naadir Hassan, the Minister for Finance, Economic Planning and Trade.

In his presentation, Hassan said that such a framework "will increase the country's ability to reduce and better manage the financial crisis by making legal reforms based on good governance and international norms and standards."

He said that the bill "makes provision for the existence of a Financial Stability Committee that falls under a legal framework that supports its functions. The fundamental objective of the committee is to promote financial stability of the country."

The Committee will be tasked with financial stability oversight with some principal functions such as monitoring risks and vulnerabilities to the financial system and devising the country's financial stability policy strategy.

The Committee will also collect information and statistical data that it deems relevant to further financial stability and identify, and assess risks to financial stability.

Additionally, it will monitor domestic and international financial regulatory developments and promote the development of effective crisis management and the implementation of a coordinated response to financial crises.

"The institutions that will form part of the committee will be the Ministry of Finance, the Central Bank, the Financial Services Authority (FSA), and the Financial Intelligence Unit (FIU)," said Hassan.  

He added that the governor of the Central Bank, Caroline Abel, will lead the work of the committee since the institution is responsible for macroeconomic policy, including monetary policy and exchange rate.

"The bill gives the committee the power to make formal recommendations to its members to take certain actions to manage or remedy risk that can have adverse effects on financial stability," said Hassan.

The bill also makes provision for the Committee to submit a report to the President of the country and the National Assembly not later than six months after the end of a fiscal year.

"The report will give an account of the activities undertaken by the committee as well as formal recommendations made. It also makes provision for the finance minister to make necessary regulations under this law," said Hassan.

Thirty members of the National Assembly voted in favour of the proposed Bill.