Kingdom of the Netherlands-Aruba: Technical Assistance Report-Financial Stability Diagnostic and Scoping Mission
IMF Staff Country Reports, May 19, 2023
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Bibliographic details
- Published: May 19, 2023
- Series: IMF Staff Country Reports
- DOI: https://doi.org/10.5089/9798400242885.002
Major macrofinancial vulnerabilities and risks
- The economy of Aruba is tourist dependent, which is an important source of vulnerability.
- The major source of risk comes from lending.
- Banks are increasingly exposed to the real estate market and compete with nonregulated lenders.
- Residential house prices have increased significantly in some regions since the start of the pandemic driven by strong demand from nonresidential buyers as well as higher construction costs due to coronavirus disease-related supply constraints.
Systemic risk monitoring and data
- The data available to the Central Bank of Aruba is sufficient for starting systemic risk monitoring, but some data gaps should be addressed.
- The monitoring of systemic risk and the development of macroprudential tools requires more granular, frequent, and timely data.
Policy findings and recommendations
- The future Financial Stability Department (FSD) is advised to develop a strategy on Macroprudential Policy (MaP).
- Based on the macroprudential strategy, the FSD should prepare the methodology for the introduction of the MaP instruments chosen.
- The FSD should ensure the necessary preparations in terms of data collection for the purpose of implementing MaP instruments.
Contextual and subject tags (as presented)
- Commercial banks, Financial institutions, Financial sector policy and analysis, Financial sector stability, Housing prices, International organization, Loans, Monetary policy, Mortgages, Prices
- Keywords included: bank data, bank FIS, c. CBA, Caribbean, CARTAC mission, Commercial banks, Financial sector stability, Housing prices, lending portfolio, Loans, mortgage bank, Mortgages, staff team of the International Monetary Fund
IMF Staff Country Report: Kingdom of the Netherlands-Aruba: Technical Assistance Report-Financial Stability Diagnostic and Scoping Mission (May 19, 2023).
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