New Financial Stability Report published
THE CENTRAL BANK of Barbados and the Financial Services Commission have published the 2016 Financial Stability Report, an in depth analysis of the island’s financial system.
The report, which examines the structure of the financial services sector as well as the resilience of different classes of financial institutions, found that “key financial sector indicators point to the continued stability of the Barbadian financial system during 2016”, and further stated that “stress tests performed on the financial system suggest that the system is generally stable and can survive a range of adverse events.”
According to the report, commercial banks continue to dominate the local financial landscape, holding 55 per cent of domestic assets, with the second largest percentage, 13 percent, being held by insurance companies. Credit unions, trust and financial companies, mutual funds and pension funds all controlled similar percentages of the market. It goes on to examine each type of financial institution and to conduct simulations of events that could impact its stability.
In addition to its analysis of the island’s financial institutions, the 2016 Financial Stability report contains two research notes. The first concerns household debt and its implications for the local financial system. It looks at the rise of household debt over a 25 year period as well as the sources of this debt.
The second note is on de-risking, a phenomenon that has impacted countries in the Caribbean and Latin America as well as Asia and Africa and that has potential grave implications for the local International Business and Financial Services (IBFS) sector.
The report is available for download on the Central Bank of Barbados website www.centralbank.org.bb. (PR)