Vigorous review of financial regulation ahead for Caribbean

BASSETERRE, St. Kitts – GIVEN the turbulent economic conditions that the Caribbean Community (CARICOM) has been faced with over the past year, regional heads have agreed to the Liliendaal Declaration on the Financial Sector as a bold way forward.

The new framework for financial regulation and supervision in the region was agreed to by regional heads during the recently held 30th Meeting of CARICOM Heads of Government in Liliendaal, Guyana from July 2-5. 

According to a communiqué issued following the meeting, member states recognized that improving the regulation and supervision of financial systems is critical to ensuring soundness and stability in the region. 

“The relatively high degree of financial integration requires regional solutions to financial problems. There is need for closer collaboration among the supervisory authorities in Caribbean jurisdictions whereby information can be shared regularly in order to address cross-border financial issues,” the communiqué stated.

A call was made at the meeting for greater disclosure, transparency and corporate governance for both public and private companies because CARICOM views these elements as necessary for “effective surveillance, regulation and supervision”. 

CARICOM also pledged to enhance monitoring the financial sector through early warning systems, stress testing and the publication of financial soundness indicators. These, according to the communiqué, would be helpful in detecting and assessing threats to regional financial stability.

“The Region is particularly vulnerable to exogenous shocks and we are committed to strengthening the capacity of existing Regional agencies and mechanisms to perform both a developmental and stabilization role. Support and financing will be sought for the Regional institutions from the International Financial Institutions and the Multilateral Development Banks,” the report continued.

The communiqué stated that it is critical for the Caribbean to continue to enhance transparency and strengthen the regulation in its international financial sector because some institutions in the region have recently been under intense scrutiny as being potential tax havens. 

As CARICOM strives to ensure coherence and coordination in the development and integration of the regional financial system, the Head of Government will look forward to the finalisation of the CARICOM Financial Services Agreement (CFSA).