High-Level Summary Technical Assistance Reports

Turks and Caicos Islands: Financial Stability Report Review, Credit Risk Modelling, and Stress Testing

By Petr Jakubik, Adam Gersl

April 4, 2025

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Format: Chicago

Petr Jakubik, and Adam Gersl. "Turks and Caicos Islands: Financial Stability Report Review, Credit Risk Modelling, and Stress Testing", High-Level Summary Technical Assistance Reports 2025, 011 (2025), accessed May 23, 2025, https://doi.org/10.5089/9798229007474.029

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Summary

The technical assistance (TA) missions to the Turks and Caicos Islands (TCI) aimed to enhance the Financial Services Commission’s (TCIFSC) financial stability efforts. The missions reviewed the Financial Stability Report (FSR), developed sectoral credit risk models, and established a stress testing (ST) framework. They provided tools for assessing non-performing loans (NPLs) and conducting STs under various macroeconomic scenarios. Results indicate that TCI’s banking sector is resilient, benefiting from robust initial capital. Recommendations include refining the FSR’s structure, improving credit risk modeling, and establishing regular ST exercises. These TA missions reinforce TCIFSC’s capacity to identify and address financial vulnerabilities effectively.

Subject: Credit risk, Financial regulation and supervision, Financial sector policy and analysis, Financial sector risk, Financial sector stability, Stress testing

Keywords: Credit risk, Credit risk modeling, Financial sector risk, Financial sector stability, Financial stability, Financial stability report, Missions to the Turks and Caicos Islands, Sectoral credit risk model, Stress testing, Systemic risk, TCIFSC's objective, TCI's banking sector

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