Barbados - Financial Sector Assessment : Based on the Joint International Monetary Fund (IMF) - World Bank Financial Sector Assessment Program (FSAP) Update
The principal objective of the missionwas to update the FSAP conducted in 2002 focusing onfinancial system stability and specific institutionaldevelopment issues. The mission also provided an assessmentof the observance of international standards and codes infinancial regulation and supervision for the banking andsecurities sectors as well as of the development needs ofthe financial system and its potential contribution toeconomic development. Preliminary results of the missionwere discussed with the authorities during the subsequentIMF Article IV mission. The 2008 FSAP update for Barbadostook place in the context of considerable turmoil in globalfinancial markets. Encouragingly, the financial system inBarbados has been little affected by this turmoil and themacroeconomic situation remains robust with economic growthcontinuing to benefit from healthy tourism numbers andongoing construction activity. As a result, the unemploymentrate continues near historic lows. Nonetheless, economicprospects are tied to continuing tourism and, as such, tothe slowing economic performance in Europe, particularly theUnited Kingdom, and the United States. The offshorefinancial sector appears insulated from the onshore bankingsystem, thus limiting the risk of contagion. Barbados willcontinue to face competition from offshore financial centersin the region. To differentiate itself, the country isseeking to continue strengthening its reputation forstability and a selective licensing process, and to developa workforce with strong skills in financial services.However, the authorities continue to face the challenge ofoverseeing a large number of very heterogeneous financialinstitutions with constrained resources.
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