IMF to join regulators to inspect financial sector

The International Monetary Fund (IMF), along with the Central Bank of Barbados and the Financial Services Commission (FSC), is expected to undertake a major assessment of the island’s entire financial sector.

While details of that assessment were not revealed on Tuesday by Minister in the Ministry of Finance Ryan Straughn, he revealed that the island’s two supra regulators will team up with IMF officials to test the strength of the sector which includes insurance companies, commercial banks, credit unions, mutual funds, securities and other financial services operations.

Speaking in the House of Assembly on Tuesday as he led debate on the Insurance (Amendment Bill) 2025, Straughn said the assessment would be an examination of where “we stand in relation to the things that we have done under this very IMF programme.”

Noting that greater attention will be paid to effective supervision of the entire insurance sector, the minister said local regulators will be operating in conjunction with their regional counterparts, given the level of cross-border investments by companies.

However, in order to “open areas for opportunities and growth,” Straughn said, interventions will be necessary to help the local “financial system to be more robust”.

Straughn pointed out: “We on this side are cognisant that you have to be flexible in an environment that, globally, is clearly unfolding. And therefore, in that evolution of the external environment, we must make sure that we have the right data, we have the right partnerships, we’re working cross-border to ensure this close-up collaboration between regulators in Barbados, regulators across the rest of the Caribbean, and even globally, because it doesn’t make sense for us to not have those working relationships.”

Reflecting on the collapse of CL Financial in Trinidad and Tobago along with its subsidiary CLICO in Barbados, Straughn explained that as a consequence, a more extensive regulatory framework has been established. “Out of the experience that we saw with the demise of CLICO here in Barbados, and how that was allowed to be partitioned, it cannot happen again,” he said.

The minister in the Ministry of Finance pointed out that the FSC would be given “more flexibility to do a range of things in relation to the risk management of insurance companies” as the FSC works “more collaboratively with other supervisors across the region and internationally to ensure that the industry can be regulated appropriate to the risk that they are specifically taking.”

Straughn told the Lower House, this approach to regulation of the sector was one that the administration supported. At the same time, he stressed that the regulatory environment was not one that was intended to stifle the sector’s growth.

“We must now come to the realisation that…to come to the people of Barbados, we must be able to demonstrate the seriousness that is required to manage a complicated economy and a complicated world,” he stated.

(IMC1)