The Bahamas: Financial System Stability Assessment

International Monetary Fund

No 2019/199, IMF Staff Country Reports from International Monetary Fund

Abstract: The Bahamas appears to be resilient to current threats to its financial stability, but action is needed to safeguard against potential weaknesses. There is a large stock of problem assets that needs to be dealt with from a variety of perspectives: systemic risk monitoring, banking supervision, and crisis management. Vulnerabilities to natural disasters and external economic contagion heighten this need. The banking sector dominates the financial system and has focused on residential mortgages and consumer loans during a long period of economic stagnation. Despite poor growth the sector has remained profitable. However, the small domestic residential property market backing most secured lending is prone to shocks and illiquidity. This has historically led to high and persistent levels of nonperforming loans (NPLs), which significantly increase uncertainty and fragility in the banking system.

Keywords: ISCR; CR; financial system; price index; credit risk; interest rate; banking system; bank asset quality; bank resolution legislation; bank assets; bank portfolio; central bank of The Bahamas; liquid asset; CBOB supervision; bank boards of directors; assessments of board; CBOB recommendation; Anti-money laundering and combating the financing of terrorism (AML/CFT); Nonperforming loans; Credit bureaus; Credit; Commercial banks; Global (search for similar items in EconPapers)
Pages: 56
Date: 2019-07-01
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