Role of the Central Bank of Aruba
On 1 January 1986, when Aruba obtained its status as an autonomous country within the Kingdom of the Netherlands, the Central Bank of Aruba (“CBA”), a legal entity in itself (sui generis), was incorporated. The principal tasks of the CBA are to maintain the internal and external value of the Aruban florin and to promote a solid and secure financial system.
Main tasks CBA
As stipulated in the Central Bank Ordinance (Centrale bankverordening), the main tasks of the CBA are to:
- Conduct monetary policy;
- Supervise the financial system;
- Issue bank notes and coins on behalf of the government;
- Act as the banker for the government;
- Regulate the flow of payments to and from other countries (as the central foreign exchange bank); and
- Advise the Minister of Finance on financial matters.
Supervision of service providers
The CBA is entrusted with the prudential supervision of the credit institutions, money transfer companies, insurance companies, insurance brokers, investment institutions and their administrators, trust service providers and company pension funds based on the State Ordinance on the Supervision of the Credit System (Landsverordening toezicht kredietwezen), the State Ordinance Supervision Money Transfer Companies (Landsverordening toezicht geldtransactiebedrijven), the State Ordinance on the Supervision of the Insurance Business (Landsverordening toezicht verzekeringsbedrijf), the State Ordinance on the Supervision of Trust Service Providers (Landsverordening toezicht trustkantoren) respectively the State Ordinance on Company Pension Funds (Landsverordening ondernemingspensioenfondsen).
Prudential supervision aims at preventing financial institutions from taking risks that could harm the interests of deposit and/or policyholders and/or endanger the stability of the financial system. In view thereof, continuous off-site surveillance and periodic, risk-oriented on-site examinations are conducted. Furthermore regular bilateral meetings are held with the institutions concerned as well as with the representative organizations to discuss supervisory matters. Maintaining the integrity of the financial system is a crucial aspect of prudential supervision.
The Central Bank is furthermore entrusted with the supervision of the customer due diligence process which certain service providers are required to conduct pursuant to the State Ordinance for the Prevention and Combating of Money Laundering and Terrorist Financing (Landsverordening voorkoming en bestrijding witwassen en terrorismefinanciering).