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Financial Interconnectedness and Financial Sector Reforms in the Caribbean

Author

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  • Ms. Sumiko Ogawa
  • Mr. Joonkyu Park
  • Ms. Diva Singh
  • Ms. Nita Thacker

Abstract

Financial sector linkages have increased continuously in the Caribbean with cross border capital flows and financial conglomerates dominating the financial system. While the greater interconnectedness can heighten systemic risks and likelihood of contagion, it can have positive impacts provided the regional authorities take steps to prevent the systemic risk. In this context, financial sector reform measures aimed at bolstering and harmonizing prudential regulations in line with international best practices, the strengthening and enhancement of financial sector supervision to include cross border linkages through consolidated supervision, increased cooperation across supervisors in the region, and the establishment of deposit insurance and crisis resolution frameworks will be critical to maintain financial sector stability and minimize the repercussions of any negative shocks.

Suggested Citation

  • Ms. Sumiko Ogawa & Mr. Joonkyu Park & Ms. Diva Singh & Ms. Nita Thacker, 2013. "Financial Interconnectedness and Financial Sector Reforms in the Caribbean," IMF Working Papers 2013/175, International Monetary Fund.
    • Handle: RePEc:imf:imfwpa:2013/175
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    References listed on IDEAS

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    Cited by:

    1. Xu, Ying & Corbett, Jenny, 2020. "What a network measure can tell us about financial interconnectedness and output volatility," Journal of the Japanese and International Economies, Elsevier, vol. 58(C).
    2. Nkrumah, Kwabena Meneabe, 2013. "Effect of Fiscal Policy Shocks in Brazil," MPRA Paper 72534, University Library of Munich, Germany.
    3. Heinrich, Gregor, 2015. "Designing a Financial Stability Architecture for a Regionally Integrated Financial Space: The European Experience," MPRA Paper 63225, University Library of Munich, Germany.
    4. Nkrumah, Kwabena Meneabe, 2013. "Effect of Fiscal Policy Shocks in Brazil," MPRA Paper 85432, University Library of Munich, Germany.

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