Financial regulation and the CSME. Harmonisation or standardisation

In 1973, CARICOM Heads of Government agreed that in order to survive, it was necessary for CARICOM member states to strive for integration. The decision to establish the CARICOM Single Market and Economy (CSME) across the Caribbean with effect from 1 January 2005, makes this paper particularly apposite. This brief analysis aims to provide a concise, yet rigorous, examination of the issues underlying Chapter 3 of the Revised Treaty of Chaguaramas, pertaining to the mobility of capital. The examination focuses on the most significant changes that are expected to result in financial regulation and the implications for policy making and financial stability. This non-mathematical discourse relies on recent publications on the related issues and integrates the theoretical contributions from various academic debates. As part of the process, the paper will address, from a public policy perspective, the urgency for CARICOM regulators to proactively identify and measure potentially problematic risks in order to safeguard the financial environment in a liberalized, ‘regionalised’ and single economy context that is punctuated by increased capital mobility.