WILLEMSTAD – Curaçao’s banking sector remains stable, but rising household debt and real estate exposure are becoming major areas of concern for the Central Bank.
In its new financial stability research agenda, the Centrale Bank van Curaçao en Sint Maarten says the banking system remains one of the most important pillars of the economy, with assets exceeding 150 percent of GDP across the monetary union.
But the bank warns that vulnerabilities remain.
One major concern is the connection between banks and the housing market.
According to the CBCS, mortgage lending represents a significant part of bank portfolios, which means any decline in property values could quickly affect financial stability.
The report notes that international experience shows housing market corrections often precede banking crises.
Another concern is non-performing loans.
The CBCS says many bad loans remain overdue for more than 180 days.
That raises questions about credit quality and long-term financial resilience.
The central bank plans to conduct stress tests to measure how banks would perform under economic shocks.
It will also study consumer debt trends and sector-specific lending risks.
The goal is to prevent risks from building up unnoticed.