Central Bank Curacao Sint Maarten

Financial Sector Reform Program Curaçao and Sint Maarten English PDF

Financial Sector Reform Program Curaçao and Sint Maarten
Willemstad/Philipsburg – As part of its efforts to strengthen the resilience of the financial
sector, the Centrale Bank van Curaçao en Sint-Maarten (CBCS) has developed a comprehensive
reform package. In the analysis and design of the reform program the authorities benefited
from technical assistance provided by the International Monetary Fund.
“The reform plan cuts across multiple functional areas of the CBCS, and seeks to further
strengthen its analytical capacity in the area of financial stability and systemic risk analysis;
enhance supervisory scrutiny; and buttress the financial sector safety net”, said CBCS
President Richard Doornbosch. To strengthen prudential supervision, at the outset mainly
in the areas of liquidity and credit risk management, the CBCS is conducting thematic
investigations into the liquidity-position monitoring practices and quality of liquidity-risk
management of the financial institutions. Furthermore, the CBCS has planned investigations
into the quality of the institutions’ loans and investments, to be carried out once the long￾term economic and financial impact of the COVID-19 pandemic can be more reliably
The analysis has also revealed the need for legislative and regulatory reforms in the areas of
intervention, enforcement, and resolution. Mr. Doornbosch emphasized that such changes
are essential to expand the instruments available to the CBCS, but also to improve the
efficacy of its interventions. In addition, the IMF underlines the importance of having a
more data-driven and intrusive approach to supervision together with stronger efforts to
improve the formal governance structures of the supervised institutions and greater
attention to the long-term viability of certain business models. One key issue among these
is the quality of the data the CBCS receives to carry out its supervisory role, which, as a
matter of priority, requires improvement in a number of areas.
Finally, also considered was the initiation and institutionalization of a structured dialogue
between the CBCS and the Ministry of Finance, which would enable more effective
coordination on issues pertaining to financial stability and, more specifically, crisis
management. A formalized dialogue is to be preferred, as it would ensure that both parties
are informed about any (potential) financial stability risks. Such a regular dialogue would also
provide for informing the government about policy (change) proposals and mobilize
support for necessary financial sector reforms, with the aim to minimize potential losses to
taxpayers should stresses in the financial sector materialize. “The establishment of a financial
stability committee is therefore strongly recommended,” said

The CBCS’s financial sector reform program can be found on the CBCS website via:
Willemstad, April 13, 2021

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