Tue | Nov 28, 2023

BOJ: Financial sector not at risk

Published:Thursday | March 30, 2023 | 6:09 PM

Jamaica's financial sector is “well capitalised and able to meet liquidity needs”, the Bank of Jamaica (BOJ) said in a statement today, in response to concerns about the recent collapse of banks in the United States and Europe.

“There has recently been a spate of banking problems in the US and Europe. Several factors appear to have underlaid these events, including concentrated exposures to specific industries and inadequate safeguards against interest rate and concentration risks,” noted BOJ's Financial Policy Committee.

The central bank said that based on its assessment of the implications of the recent international bank failures for the domestic financial sector, contagion risks to the Jamaican financial system from the events in the US and Europe is low.

It further stated that no Jamaican financial institution currently has any major exposures to the failed banks. The domestic financial system, while having been subjected in 2022 to similar fair value shocks as the institutions in the US, has not reflected any unmanageable deterioration in its balance sheet position.

“The financial system, through several initiatives, has remained well capitalised and is able to meet liquidity needs,” BOJ stated.

“The supervisors of the domestic financial system will maintain their enhanced monitoring of the system to ensure that it remains sound.”

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