CARICOM CENTRAL BANK GOVERNORS AGREE TO PRODUCE A CARIBBEAN FINANCIAL STABILITY REPORT BY DECEMBER 2012
Measures to strengthen regional oversight of the Caribbean financial system were high on the agenda of a meeting today of central bank Governors of Caricom countries, Aruba and the Turks and Caicos Islands. The meeting agreed on arrangements to produce a Caribbean Financial Stability Report by December 2012, under a project financed in part by the Inter-American Development Bank and coordinated by the Caribbean Centre for Money and Finance, located on the St Augustine Campus of the UWI. The report will be a collaborative effort between the participating central banks and the Centre, which will also collaborate on early warning systems of distress in the financial system, and policies to strengthen the resilience of the region’s financial sector.
Governors reviewed the recent economic performance of regional countries. Commodity-producing countries such as Belize, Guyana, Suriname and Trinidad and Tobago have all benefitted from the current boom in commodity prices, and their growth rates have in general been above the regional average. Tourism-dependent economies have fared less well, even though there has been a revival in tourist traffic in the winter tourist season just past. All countries have recorded some acceleration in inflation as a result of the rise in the prices of petroleum and other commodities. Fiscal consolidation is underway in most countries, and these programmes are generally on track. External payments are on a sustainable trend, for the most part, but the unemployment picture has not yet brightened.
The Governors’ meeting received a report on how global initiatives on financial stability have impacted financial centres in the Caribbean and possible courses of action. These include suggestions for the reform of the governance structure for the oversight of financial stability. A Regional Task force is being assembled, under the chairmanship of Harold Codrington, Deputy Governor of the Central Bank of Barbados, to be the region’s liaison with the Group of Twenty (G-20) countries, and their agency for financial reform, the Financial Stability Board (FSB). Some member countries attending the meeting expect to be invited to join the FSB’s soon-to-be-established regional advisory group for the Americas.
The Executive Director who represents Canada, Ireland and several Caribbean countries on the Executive Board of the IMF reported on recent reforms in the Fund’s structure, and on the selection process for the appointment of a new Managing Director. The meeting supports a selection process that is in accordance with the Fund’s own stated intention that it “take place in an open, merit-based, and transparent manner” and “without geographical preferences” (IMF Press Release, May 20, 2011).
Heads of central banks and monetary authorities signed a revised Memorandum of Understanding signalling renewed commitment to the principles of information exchange and cooperation.
The Governors’ meeting also received reports on the activities of the Caribbean Technical Assistance Centre (CARTAC) and the Latin American Centre for Monetary Studies (CEMLA), and the Caribbean Credit Rating Agency (CariCris) submitted a proposal to raise additional equity. An update on efforts to establish a Caribbean regional credit bureau was also presented.
The Governors of Caricom countries, Aruba, and Curacao/St Martin meet every six months, under the aegis of the Caricom Secretariat, to review regional economic performance and to discuss matters of common interest. Today’s meeting was the first of two meetings in 2011 which are being hosted by the Central Bank of Barbados.