Financial Crime World

Central Bank of Trinidad and Tobago Issues Financial Stability Report for 2022

The Central Bank of Trinidad and Tobago has published its Financial Stability Report for 2022, providing an overview of the country’s financial regulatory updates and key risks facing the domestic financial sector.

Regulatory Updates

  • The implementation of new supervisory standards is underway, including:
    • A draft liquidity coverage ratio (LCR) guideline
    • Reporting framework
  • The bank has released a guideline on publishing abridged financial statements
  • Strengthened its risk-based supervision and analytical capability
  • Extended timelines for submissions from licensees related to internal capital adequacy assessment process (ICAAP)
  • Progress made in implementing IFRS 17 by the insurance industry
  • Draft cybersecurity best practices guideline circulated to institutions for feedback

Key Developments

  • Issuance of an updated simplified due diligence framework for basic banking accounts
  • Finalization of the national risk assessment
  • Review of payments systems developments and continued execution of fintech policy

Domestic Economic Activity

The report noted that domestic economic activity showed signs of recovery in 2022, with moderate-to-elevated global financial stability risks posed by: + Rising international interest rates + Larger liquidity requirements + Cyber-attacks

Sector Performance

  • Non-performing loans for both household and corporate sectors remained low and stable over the year
  • Improvement in profitability but decline in capital adequacy experienced by the sector
  • Credit risk remains contained, but interest rate and liquidity risks require close monitoring

Key Risks Facing the Domestic Financial Sector

The report highlighted several key risks facing the domestic financial sector, including: + Climate change + High and increasing cost of living + Geopolitical risks + Rising international interest rates

Conclusion

The Central Bank continued to promote financial stability through legislative reform, regulatory amendments, and improved supervisory capacity based on an ongoing assessment of sectoral risks.

Overall, the Financial Stability Report for 2022 provides a comprehensive overview of the country’s financial regulatory updates and key risks facing the domestic financial sector.