Financial Stability Committee publishes its report for 2019 | 24 November 2020
The Financial Stability Committee (FSC) has published its Financial Stability Report for the year 2019.
The annual publication aims to identify and analyse potential domestic and international systemic risks to the stability of the financial system and promote awareness of these pertinent issues, consistent with the mandate of the FSC.
In 2019, weaker global economic growth, a low interest rate environment coupled with bilateral trade disputes and geopolitical tensions were among the main threats to global financial stability.
Domestically, risks associated with de-risking and its impact on Correspondent Banking Relationships (CBRs), and increased cybersecurity risks arising from the digitalisation of the economy were identified as some of the key threats. The increasing financial burdens of some state-owned enterprises (SOEs) on the national budget also remained a threat to debt sustainability and consequently on the country’s financial stability.
In spite of these persistent risks, the core sectors of Seychelles’ financial system – banks, insurance companies and the national pension fund – were assessed to be generally stable and resilient to both domestic and external shocks in 2019. The report highlights various initiatives being undertaken to further enhance the resilience of the domestic financial system and promote financial stability.
Mindful that risks to financial stability are constantly evolving and emanate from sources beyond the traditional spheres of economics and finance, the FSC has emphasised the need for more robust and flexible legal and policy frameworks, which adequately reflect the country’s context. These elements are seen as vital platforms for the promotion of domestic financial stability.
The Report is available on the CBS website at: http://www.cbs.sc/finstability/Reports.html