## Curaçao and Sint Maarten: Technical Assistance Report; Financial Stability Report

_Technical Assistance Reports, April 4, 2025_

## Source details

**Canonical URL:** [Curaçao and Sint Maarten: Technical Assistance Report; Financial Stability Report](https://www.imf.org/en/publications/technical-assistance-reports/issues/2025/04/04/curaao-and-sint-maarten-technical-assistance-report-financial-stability-report-565868)

## Other formats

- [Markdown version](/en/publications/technical-assistance-reports/issues/2025/04/04/curaao-and-sint-maarten-technical-assistance-report-financial-stability-report-565868/index.md)
- [Structured JSON version](/en/publications/technical-assistance-reports/issues/2025/04/04/curaao-and-sint-maarten-technical-assistance-report-financial-stability-report-565868/index.json)
- [Bundle manifest](/en/publications/technical-assistance-reports/issues/2025/04/04/curaao-and-sint-maarten-technical-assistance-report-financial-stability-report-565868/bundle-manifest.json)

## Bibliographic details
- Published: April 4, 2025
- Series: Technical Assistance Reports
- DOI: https://doi.org/10.5089/9798229004596.019

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### Mission and objectives
- CARTAC conducted a technical assistance (TA) mission in Curaçao and Sint Maarten from October 3 to October 12, 2023.
- Primary objectives:
  - Support the Central Bank of Curaçao and Sint Maarten (CBCS) in enhancing its Financial Stability Report (FSR).
  - Improve financial stability assessments, strengthen the analytical framework, and refine credit risk modeling.

### Analytical enhancements and methods introduced
- Reviewed the latest available FSR and identified scope for improvements in structure, analytical depth, and communication strategy.
- Emphasized development of sectoral credit risk models to assess the impact of macroeconomic conditions on non-performing loans (NPLs) and overall financial stability.
- Introduced the Bayesian Model Averaging (BMA) approach to address model uncertainty.
- Provided an initial estimation framework for sectoral credit risk modeling.
- Broader analytical topics covered:
  - Stress testing.
  - Interconnectedness analysis.
  - Integration of financial stability indicators with regulatory frameworks.
  - Consideration of emerging risks such as climate and cyber risks.

### Key findings and recommended enhancements
- Report content and structure:
  - Streamline the text to avoid repetition and focus on key financial stability risks and vulnerabilities.
  - Make the analytical toolkit more forward-looking by incorporating stress testing results based on macroeconomic scenarios.
- Credit risk and data:
  - Develop sectoral credit risk models to link macroeconomic conditions to NPL dynamics.
  - Strengthen CBCS data management by consolidating all financial stability-related data into a centralized data warehouse.
  - Explore the feasibility of establishing a credit register for more granular risk assessment.
- Regulatory and indicator communication:
  - Provide clearer communication of regulatory frameworks and financial stability indicators across all segments of the financial system, including banks, insurance companies, and pension funds.
- Governance and process:
  - Support cross-departmental discussions during FSR development to ensure it serves as the CBCS’s flagship financial stability publication.

### Communication and outreach recommendations
- Internal communication:
  - Promote the FSR as the CBCS’s flagship financial stability publication, underpinned by cross-departmental development.
- External communication:
  - Enhance external communication strategy through press briefings, media interviews, and online dissemination efforts.
- Content coverage:
  - Consistently cover emerging risks such as climate change and cybersecurity in future FSRs.

### Expected outcomes and benefits
- Improved quality, transparency, and forward-looking nature of financial stability assessments in Curaçao and Sint Maarten.
- Strengthened macroprudential oversight and risk management in the region through:
  - Enhanced sectoral credit risk modeling.
  - More effective stress testing under macroeconomic scenarios.
  - Better data consolidation and potential credit register implementation.
  - Clearer communication of regulatory frameworks and indicators across financial sectors.

*International Monetary Fund. Curaçao and Sint Maarten: Technical Assistance Report; Financial Stability Report (Technical Assistance Report No. 2025/035).*

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## Content in this bundle

- **Executive Summary**
  - [Executive Summary (Markdown version)](/-/media/files/publications/tar/2025/english/tarea2025035-print-pdf.pdf.md){rel="alternate" type="text/markdown"}
  - [Executive Summary (PDF)](/-/media/files/publications/tar/2025/english/tarea2025035-print-pdf.pdf){rel="external" type="application/pdf"}

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_Source: https://www.imf.org/en/publications/technical-assistance-reports/issues/2025/04/04/curaao-and-sint-maarten-technical-assistance-report-financial-stability-report-565868_