Barbados: Financial System Stability Assessment
IMF Staff Country Reports, February 12, 2014
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- Barbados: Financial System Stability Assessment
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Bibliographic details
- Published: February 12, 2014
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9781484300404.002
Executive summary and systemic findings
- The report evaluates the stability of the financial system in Barbados.
- Barbados has a relatively well developed financial system, including a large offshore sector.
- The onshore system is dominated by large, regionally active banks.
- Banking services to the population are also provided by the credit union sector.
- The system includes a mature but concentrated insurance sector with extensive international affiliates.
- Other nonbank financial institutions provide credit and other instruments for savers.
- With a deteriorating fiscal situation and weak growth prospects, Barbados faces considerable macroeconomic vulnerabilities.
- Sovereign risk is a concern, given a large public debt, high fiscal deficits, and slow growth.
- Policy options are limited by a fixed exchange rate regime.
Key risks and vulnerabilities
- Large public debt.
- High fiscal deficits.
- Slow economic growth.
- Fixed exchange rate regime constraining policy responses.
- Sovereign risk that could affect financial sector stability.
Institutional structure and market characteristics
- Large offshore financial sector alongside the onshore system.
- Onshore banking dominated by large, regionally active banks.
- Credit union sector provides retail banking services.
- Insurance sector is mature but concentrated and has extensive international affiliates.
- Presence of other nonbank financial institutions offering credit and saving instruments.
Content in this bundle
- Barbados 2013 Article IV Consultation, IMF Country Report No. 14/53; January 24, 2014