Judicial Oversight of Financial Regulatory Action in the Commonwealth Caribbean

Abstract

Distress in financial institutions in the Commonwealth Caribbean over the last two decades has led to severe enforcement action by regulators. Additionally, supervisors have, in the wake of the distress and tighter regulatory controls, become more alert to regulatory non-compliance and signs of institutional weakness. This has, perhaps, prompted more assertiveness in the use of supervisory powers across the Commonwealth Caribbean. The increased use by financial regulators of their statutory powers as a result of these factors has been met with challenges in several instances in the judicial arena. This paper analyses the judicial response to financial regulatory action by examining relevant judgments of courts for selected Commonwealth Caribbean jurisdictions. The aim is to assess how, and the extent to which, the judicial response has supported the regulatory apparatus and the underlying purposes of financial services regulation. The evidence shows that there is judicial support for the regulatory structures but that this ought not to be equated with judicial deference to the decisions and actions taken by financial regulators.