IMF advisor says watch other Caribbean countries
An IMF advisor is urging the Freundel Stuart administration to pay more attention to the spillover impact which events in neighbouring CARICOM states could have on this country’s financial stability.
Advisor for the Western Hemisphere, Dr Elie Canetti, told Barbados TODAY this morning during the break of a regional financial risk assessment conference at Hilton Barbados, that he would advocate the spillover analysis approach.
“One thing we are trying to advocate to do something is called spillover analysis. So, that is something, hopefully will happen in the Caribbean . . . just to try to understand the inter-connections between financial institutions in the Caribbean and between the Caribbean and other countries, Canada for example, which
has a lot of banks and bank subsidiaries and branches in the Caribbean,” Canetti suggested.
“The idea would be, again, to understand how balance sheets relate among these institutions, so that, a good example, you had in the past was the CLICO crisis, where a crisis in a particular institution headquartered in Trinidad and Tobago spread throughout the region; and there was a lack of understanding, I think, about the inter- connectiveness of the system and how one institution collapsing could actually then propagate throughout the region,” observed the IMF official.
He acknowledged that it caused enormous financial and economic damage throughout the region.