DOMESTIC FINANCIAL SERVICES SECTOR IS STRENGTHENING
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Deputy Director, READ
Chief Executive Officer
The domestic financial services sector is showing signs of improvement.
The update of the 2013 Financial Stability Report (FSR), published by the Central Bank of Barbados and the Financial Services Commission (FSC), indicates a decline in non-performing loans, while growth in deposits as well as in the mortgage lending, was evident.
The Report also shows that the capital buffers are well in excess of the requirements, with stress tests clearly supporting the view that the sector is very stable.
"As had been the case in prior financial stability reports, inferences from the exercise (the stress tests) provided robust support for the perspective that the financial system remains stable, "authors of the document Anton Belgrave, Deputy Director, Research and Economic Analysis Department, CBB and Randy Graham, Chief Executive Officer, FSC wrote.
The authors reassured that the extensive stress tests on the financial system demonstrated that the capital reserves set aside by financial institutions to protect themselves against unexpected losses are adequate to defend against sizeable misfortunes.
And they reiterated that the Deposit Insurance Scheme and the strength and reputation of the parent institutions buttress the stability of the financial services sector.
On the downside, credit risk remained high.
The Report also gave an update on Barbados' efforts to implement BASEL 11. In this regard, banks have received guidelines and reporting forms on the market risk amendment, and the Central Bank has been discussing with the industry the interest rate risk and the internal capital adequacy assessment programme.
Work continues apace to improve the regulatory framework for insurance companies and credit unions, as well as on enhanced guidelines for operations of these two sectors.
The FSR, published biannually, provides a health check of the country's domestic financial services sector.
FSR Update 2014 The document is available at www.centralbank.org.bb or at www.fsc.gov.bb.
August 12, 2014