(Trinidad Guardian) The International Monetary Fund (IMF) has concluded that this country’s banks could be at risk.
The IMF came to that conclusion after completing its Financial Stability Assessment Program (FSAP) with T&T on August 31, 2020 and reported in its Financial System Stability Assessment (FSSA) report that the country’s banks might be facing potential vulnerabilities.
The report noted: “The banking system was well capitalized and liquid but exposed to sovereign risk and potential liquidity risks stemming from non-bank financial entities in the group on the eve of the COVID-19 crisis.”
The IMF has disclosed that FSAP work was mostly conducted prior to the COVID-19 crisis. It added that since the FSAP’s focus is on medium-term challenges and tail risks, its findings and recommendations for strengthening policy and institutional frameworks remain pertinent.
Just before the COVID-19 crisis, the IMF indicated that T&T’s financial system had weathered the 2016–18 economic slowdown but faced vulnerabilities. Aside from noting that the banking system was well capitalised and liquid, the IMF added that the general insurance sector had recovered from claims pertaining to climate-related events in the region.