Financial Interconnectedness and Financial Sector Reforms in the Caribbean

By Sumiko Ogawa, Joonkyu Park, Diva Singh, Nita Thacker

July 31, 2013

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Sumiko Ogawa, Joonkyu Park, Diva Singh, and Nita Thacker. Financial Interconnectedness and Financial Sector Reforms in the Caribbean, (USA: International Monetary Fund, 2013) accessed December 21, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

Financial sector linkages have increased continuously in the Caribbean with cross border capital flows and financial conglomerates dominating the financial system. While the greater interconnectedness can heighten systemic risks and likelihood of contagion, it can have positive impacts provided the regional authorities take steps to prevent the systemic risk. In this context, financial sector reform measures aimed at bolstering and harmonizing prudential regulations in line with international best practices, the strengthening and enhancement of financial sector supervision to include cross border linkages through consolidated supervision, increased cooperation across supervisors in the region, and the establishment of deposit insurance and crisis resolution frameworks will be critical to maintain financial sector stability and minimize the repercussions of any negative shocks.

Subject: Banking, Commercial banks, Credit bureaus, Financial contagion, Financial institutions, Financial markets, Financial regulation and supervision, Financial sector policy and analysis, Insurance companies

Keywords: Bank sector, Banking sector assets, BIS data, Caribbean, Commercial banks, Credit bureaus, Credit risk, ECCU country, ECCU's banking sector, Financial contagion, Financial interconnectedness, Financial sector in the Caribbean region, Financial system, Global, Insurance companies, Latin American bank, Liquid bank, Loan portfolio, Market share, Parent bank support, Problem bank, Regulatory and supervision system, Resolution framework, Systematic bank resolution framework, WP

Publication Details

Pages:

34
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2013/175
Stock No:

WPIEA2013175
ISBN:

9781484307830
ISSN:

1018-5941

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