Caribbean warned against contagion amid increased financial integration

Caribbean countries are being warned that while increased financial integration has facilitated the flow of funds, it has also increased the likelihood of contagion.



A recent research noted that this was evident most recently when the collapse of the Trinidad-based conglomerate, CL Financial Group sent repercussions throughout the Caribbean region.



It said the collapse of the Trinidad-based CL Financial Group highlighted the critical need for financial sector reforms, including enhanced supervision on financial institutions; harmonised supervisory standards; and closer cooperation and information sharing among supervisors.



The findings were published in an International Monetary Fund Working Paper examining the “Financial Interconnectedness and Financial Sector Reforms in the Caribbean.”



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