Financial Stability Report - Central Bank of Trinidad and Tobago

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Financial Stability Report 2024

Explore the Central Bank of Trinidad and Tobago’s comprehensive analysis of the nation’s financial system in 2023, detailing macroeconomic developments, financial sector health indicators, and insights into vulnerabilities and risks on domestic, regional, and international fronts, providing a thorough overview of the country’s financial stability landscape.

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Financial Stability Report Highlights

The domestic financial system remained stable in 2024, supported by strong capital buffers and profitability, low inflation and relatively improved global economic and financial conditions. Financial institutions continued to enhance their competitiveness and operational resilience through the greater integration of digital technologies. Ongoing progress in governance, risk mitigation, and policy compliance also contributed to the overall soundness of the financial system.

Global Financial Stability Risks Eased

Global financial stability risks eased in 2024 as inflation converged closer to targets and world economic growth stabilised at pre-pandemic levels. Major central banks cautiously loosened monetary policy in 2024, aiming to balance inflation control with economic growth.

Global Financial Sector Remains Resilient

The global financial system remained generally resilient in 2024; however, rising global uncertainty stemming from shifting tariff policies and geopolitical conflicts, has increased financial stability risks in the near term. Vulnerabilities related to high asset valuations, highly leveraged financial institutions and non-bank financial intermediaries, high government debt levels, and concerns about debt sustainability persist.

Financial System Stability Amid Persistent Fragilities

Real Gross Domestic Product expanded in 2024 owing to improvements in non-energy sector activity and modest growth in energy sector output. Despite this, domestic economic conditions remained challenged in 2024 as unemployment rose and fiscal and external positions softened.

Domestic Financial Sector Remains Resilient

The domestic financial sector experienced moderate growth in 2024. Overall, institutions maintained healthy capital and liquidity buffers in the face of rising global stock market volatility. Meanwhile, asset quality and profitability ratios remained solid.

Emerging Financial Stability Risks

Although domestic financial stability risks were contained in 2024, several persistent and emerging vulnerabilities shaped the domestic risk landscape sovereign debt concentrations, cyber-related threats, heightened liquidity volatility, and rising household indebtedness.

Central Bank Initiatives for Financial Stability

During 2024, the Central Bank advanced domestic financial stability through key regulatory initiatives. Focus was placed on introducing liquidity metrics and monitoring tools and introducing Basel Pillar 3 risk disclosure rules. Efforts continued on revising insurance regulations on capital adequacy, policy liabilities, and financial condition reporting while work commenced on developing a Cybersecurity Risk-Based Supervision Framework.

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Financial Stability Report 2024

Financial Stability Report Highlights

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