Barbados’ financial system faces a number of “systemic risks”.
The International Monetary Fund (IMF) reached that conclusion in its new Barbados Financial System Stability Assessment, observing: with a deteriorating fiscal situation and weak growth prospects, Barbados faces considerable macroeconomic vulnerabilities; while the financial system does not appear to be a source of immediate risk, its position appears to be deteriorating, with implications for systemic stability, moreover, stress-tests illustrate that the financial system would be vulnerable in the face of severe shocks, data limitations prevent a quantitative analysis of the insurance sector, but vulnerabilities are emerging.
The IMF said its report was “based on the work of the Financial Sector Assessment Programme (FSAP) mission that visited Barbados in July and September-October 2013”, noting that the findings “were discussed with the authorities during the Article IV consultation mission in December 2013”. (SC)
