One of the primary responsibilities of the Centrale Bank van Curaçao en Sint Maarten (CBCS) is to contribute to financial stability of the monetary union. Financial stability is defined as a condition in which the financial system is well-functioning and supportive of the economy, while resilient enough to absorb and recover from financial shocks. The CBCS exercises this responsibility by identifying and monitoring factors and indicators affecting the financial system. The CBCS also advises and decides on actions needed to reduce risks to overall systemic stability.
The CBCS is committed to maintaining financial stability by enhancing the resilience of the financial system and its institutions against shocks, thereby promoting growth and macroeconomic stability.
The financial world is constantly changing, bringing about various developments which can influence the financial system within the monetary union. Economies continuously develop and financial innovations arise. New financial products will tender new opportunities but also entail unforeseen risks. Within this ever-changing environment, the CBCS will continue its engagement in raising awareness of such emerging risks to the consumers, businesses, and financial institutions, to ensure financial stability.
The Financial Stability Division is entrusted with tasks related to maintaining financial stability, the pursuit of which is complementary to monetary stability. Financial Stability Division executes the macroprudential strategy of the CBCS. Financial Stability Division aims to identify and address, as early as possible, the main threats by:
i. Developing and maintaining an Early Warning Monitoring System.
ii. Conducting macroprudential analyses (including stress tests, interconnectedness and contagion analysis) to identify the implications of macroeconomic developments, as well as of developments in the financial markets and the financial sector.
iii. Introducing, developing, and advising on macroprudential policy instruments and coordinating risk-mitigation measures to reduce vulnerabilities and imbalances in the financial system.
iv. Ensuring that the CBCS is prepared to manage a financial crisis should such a crisis occur.
v. Providing solicited and unsolicited advice on financial stability issues to the governments of Curaçao and Sint Maarten.
vi. Conducting and publishing (scientific) research.