Caribbean region has kept up-to-date on financial stability analysis, says CBB Governor

Caribbean nations have kept themselves at the forefront of changing international currents in economic and financial analysis, and Governor of the Central Bank of Barbados, Dr. Delisle Worrell, says that financial stability analysis has been no exception.

Speaking at the opening ceremony of the ‘Conference on Financial Risk Assessment in an Integrating Region: The Caribbean’ at the Hilton Hotel, Barbados, Governor Worrell said the region was early in the field in this regard, and has kept abreast of analytical developments over the years.

Some of the participants attending the two-day conference.

“As a result, three of our central banks now publish financial stability reports with in-depth analysis which is comprehensive, sophisticated and is designed to address the principal areas of potential vulnerability we face. That includes some analysis of regional risks, because our national financial systems are intimately linked, and it is necessary to assess regional and international risk exposures in the search for completeness of national financial risk policy,” he said.

Furthermore, there is also a history of regional financial surveys, reflecting the fact that the financial systems within the region have been interlinked by ownership and financial transactions for generations.

“The IMF sponsored two regional workshops on financial risk analysis in the years I worked for that institution, where we were able to bring together the research that had been done in the Caribbean with leading international expertise which the Fund was able to provide.

“Out of this effort, we now have increasingly sophisticated Financial Stability Reports being published by Jamaica, Barbados and Trinidad and Tobago. They all have a regional dimension, because the intra-Caribbean linkages are so pervasive that a meaningful assessment of financial stability must take account of risk exposures from around the region, as well as those arising locally,” he explained.

Regional structure

With that in mind, the Governor referred to the regional financial architecture, which he explained is built on that foundation of analysis, as well as the network of co-operation which financial supervisors have established within the region. He indicated that there are now regional associations for the supervision of banking, insurance, securities trading and pensions, as well as a regional group on anti-money laundering.

“The task before you is to stitch together the operational and informational arrangements for regional assessment and monitoring of financial stability on an ongoing basis. The outlines of the way forward are set down in the project document on the basis of which the IDB agreed to provide funding for this effort. It envisages that each country, or sub-region in the case of the ECCU, would have established an overarching framework for financial stability, led by the central bank. The regional architecture then becomes the mechanism which binds together the national and sub-regional financial stability functions,” Dr. Worrell added.

The country’s leading economist further pointed out that the Committee of Central Bank Governors is at the top of that regional structure, with each Governor as head of the financial stability function in the area under their jurisdiction, and he explained it is the task of the current conference to move forward with the process of putting that system in place.

He maintained that this is a high priority for the Caribbean region, and they are desirous of a speedy conclusion. (JRT)