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Barbados’ financial institutions are “flush with liquidity” and would be able to withstand a sudden high volume of withdrawals, but they would be more vulnerable to a significant increase in non-performing loans (NPLs), loans that borrowers have stopped repaying, says Anton Belgrave, Director of the Central Bank of Barbados’ Research and Economic Analysis Department (READ).
Belgrave was discussing the results of stress tests – simulations that measure financial institutions’ ability to withstand specific adverse scenarios – conducted as part of the 2019 Financial Stability Report during an interview with the Bank's Chief of Corporate Communications, Novaline Brewster.
“We essentially torture the system until it breaks.”
Watch the full interview below.