WILLEMSTAD – Curaçao’s financial sector remains broadly stable, but structural vulnerabilities and past crises continue to cast a long shadow, according to a new report by the International Monetary Fund (IMF).
The review highlights that financial institutions in Curaçao and Sint Maarten hold assets equivalent to more than 300 percent of GDP, underscoring the sector’s importance to the economy.
Banks are generally well-capitalized and liquid, and recent years have seen improvements in financial stability following the resolution of major institutions, including a large bank and a life insurer.
However, the IMF notes that these failures had significant social and economic costs and damaged public confidence in the central bank’s supervisory role.
To address these challenges, the CBCS has introduced reforms and strengthened its communication with stakeholders. The publication of financial stability reports and increased engagement with the financial sector are cited as positive developments.
Still, the IMF warns that more work is needed to link identified risks to concrete policy actions, particularly as the central bank prepares to introduce a macroprudential policy framework.
Such measures will be essential to ensure that the financial system can withstand future shocks and continue to support economic growth.