2024 Financial Stability Report

Download the report: Financial Stability Report 2024

Preface

The Central Bank of Barbados (the Bank), the Financial Services Commission (FSC), and the Barbados Deposit Insurance Corporation (BDIC) share oversight of the financial system through the Financial Oversight Management Committee (FOMC). The Bank regulates commercial banks, finance companies, trusts and merchant banks, and money value transfer services. The FSC supervises credit unions, insurance companies, mutual funds, and occupational pension plans, while the BDIC provides a safety net for depositors at commercial banks and finance companies. The FOMC’s mandate is to maintain financial stability by monitoring systemic developments, identifying and assessing vulnerabilities, and prescribing policies to enhance the
system’s resilience against potential adverse events.

Financial stability refers to the condition in which a country’s financial system operates effectively, efficiently, and resiliently—facilitating economic processes, mitigating risks, and absorbing shocks. This stability is characterised by solvent, well-capitalised, and prudently managed financial institutions, efficient and transparent financial markets, and a robust and secure financial infrastructure. Promoting financial stability is essential for cultivating confidence among consumers, investors, and market participants, and for underpinning longterm economic growth and development. Central banks and other financial regulators play a critical role in preserving financial stability through targeted policies, prudent regulation, and proactive supervisory practices.

The Central Bank Act, passed in December 2020, explicitly recognises financial stability as a core mandate of the Bank and affirms the need for macroprudential considerations in policy formulation. The Act (Section 48: Macro-prudential powers) states: “Where there is a perceived threat to the financial system, the Bank shall have the power to manage and control that risk by taking any steps that it deems suitable.”

This fourteenth edition of Barbados’ Financial Stability Report (FSR) represents a collaborative effort between the Bank and the FSC. It provides a comprehensive assessment of the risk exposures of key financial institutions, including domestic deposit-taking institutions (commercial banks, finance companies, and credit unions), insurance companies, mutual funds, and pension funds. The FSR remains a key instrument for promoting transparency and accountability in financial sector oversight. The 2024 report analyses recent trends in financial soundness indicators, institutional balance sheets, and income statements, with a focus on developments during 2024.

Download the report here: files/news%20documents/Financial%20Stability%20Report%202024.pdf