Both Sides of The Coin: The Story of The Central Bank of Barbados 1972-2017

117 confidence in deposit-taking institutions in the financial sector. The Fund was financed by an initial contribution and annual premiums from all member institutions. The Bank matched the initial contributions. In the interest of adopting a holistic view of the health of the financial sector, the Bank established a Financial Stability Unit in 2010. 71 Its broad mandate included conducting macro-prudential surveillance of the financial system, establishing a database of key variables, developing and conducting stress tests, developing an early warning system and preparing financial stability reports (the first of which was published in 2011). Successive financial stability reports have shown that most banks are able to withstand a variety of shocks. Moreover, during 2011, the Bank joined the recently-established Financial Services Commission (FSC) and the BDIC to form the Financial Oversight Management Committee to monitor developments in the financial system. Assessments of the regulatory framework Every opportunity was taken to determine whether the Bank’s regulatory oversight was achieving its goals. In 2000, 2007 and 2012 the Bank Supervision Department conducted self-assessments of the regulatory framework and identified the legislative changes that were necessary to enhance compliance with the Basel Core Principles. These exercises helped to prepare the Bank for the Financial Sector Assessment Programmes (FSAPs), conducted by the IMF and World Bank, that came soon after each assessment. The 2003 FSAP concluded that the banking sector was largely compliant with the Basel Core Principles. The 2008 review noted that the banking system was generally stable and resilient to possible economic shocks and that the regulation was also largely compliant. However, the assessors recommended that additional actions be taken to further strengthen the regulatory framework and practices. A mutual evaluation of Barbados by the Caribbean Financial Action Task Force in 2006 was also useful in determining the soundness of the domestic financial system. Chapter 4: Maturity, Modernisation and Issues of Governance: 1987 and Beyond