THE CENTRAL BANK of Barbados and the Financial Services Commission have signed a memorandum of understanding (MOU) aimed at cementing their ongoing relationship and strengthening the financial system.
The objectives of the agreement include providing detailed parameters for cooperation in relation to the exchange of information, the monitoring of financial soundness indicators for banks, insurance companies and credit unions within Barbados and for the development of early warning systems and conducting of stress tests.
Speaking during a signing ceremony at the bank last Thursday, legal counsel Sadie Dixon said the MOU also established an oversight committee comprising principal functionaries of both entities including the chief executive officer of the FSC and the Central Bank Governor.
The committee is expected to meet regularly to discuss and formulate the financial stability report and to closely monitor and respond to developments within the financial system.
FSC chairman Sir Frank Alleyne said the financial sector played a pivotal role in enhancing the quality of life of all citizens and residents of Barbados.
Maintain integrity
“Our country has one financial system where operations within it are very much intertwined, and clearly as regulators we need to collaborate to ensure the system’s integrity is maintained,” he said.
Sir Frank noted that a number of areas had to be properly addressed including surveillance and development of early warning indicators of financial stress, the thorough assessment of households’ and corporates’ balance sheets, indebtedness, and vulnerabilities, and ensuring that there is no fragmentation within the regulatory and supervisory framework.
Meanwhile, Central Bank Governor Dr DeLisle Worrell said Barbados had a history of cooperation among financial regulators that went back decades, with the Central Bank lending its regulatory expertise to the regulators of credit unions, insurance companies and securities traders for many years.
“In partnership we will continue to blend our best efforts towards the best health of our financial system in these uncertain times,” he said. (NB)