2019 Financial Stability Report
5.0 Outlook
elevated levels of concentration on lending
The ECCU financial sector remained
portfolios.
stable throughout 2019 . Most indicators
point to moderate risk. The credit to GDP
Risks have evolved since the last FSR.
gap, a measure of the financial cycle is still
They stem largely from the slowdown in
negative but entering into an expansionary
economic growth and the increasing trend in
phase.
interconnections especially in one country.
A more protracted slowdown in growth
Nonetheless, vulnerabilities persist and
could help amplify those pre-existing
new risk have come to the fore . The
vulnerabilities in the financial sector.
vulnerabilities, which persist, stem
Especially NPLs and weak profitability.
especially from the legacy NPLs in the
commercial banking system, along with
Given the levels capital in the financial
sector , the sector is expected to remain
stable even in the face of slower growth.
Notwithstanding, increased supervision of
the sector is warranted as this juncture given
the potential risks on the horizon.
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