system, whether from internal weaknesses or external shocks can therefore quickly lead to a financial crisis. the resulting economic hardship can take years, or even decades, from which to recover. a very good example of this phenomenon was seen during and after the global financial crisis. vulnerability to climate change 1 / 6 bis - central bankers'speeches but let me start by addressing one of the major external risks to caribbean economies, namely the climate crisis. our region is one of the most vulnerable to the impact of climate change. indeed, when we refer to climate vulnerable economies, caribbean countries are always the highest ranked by any measure. rising sea levels, more intense storms such as hurricane beryl, which caused significant damage to a number of caribbean islands in late june, prolonged droughts, and flooding have become our unfortunate reality. these climate - related risks have a direct bearing on financial stability, as these systems don't just devastate homes and infrastructure, they can also have adverse effects on the financial system. for example, the destruction of infrastructure can lead to loans becoming nonperforming, as businesses and households may default on their debt. banks and other large financial entities in turn, may face liquidity problems, which can trigger a systemic crisis. furthermore, as governments attempt to rebuild after the event, this often leads to an increase in public debt, which puts further strain on their ability to finance essential services and infrastructure. imagine the strain on our resources that would have occurred had any of our islands been hit by the back - to - back hurricanes that recently devastated florida and other states along the us south coast. climate - related risks are particularly challenging to manage because of their unpredictable nature and the difficulty in quantifying their economic impact. caribbean regulators must therefore continuously monitor these risks and implement forwardlooking policies to mitigate their effects on the financial system. the impact of global economic shocks in addition to climate change, external economic shocks pose another serious risk to financial stability in the caribbean. our economies are heavily reliant on global trade, tourism, and remittances. any disturbance in the global economy such as a recessions in our major trading partners or sudden changes in commodity prices can ripple through our financial systems. take, for instance, the fallout from the covid - 19 pandemic, which brought the world to a standstill in 2020. it was an economic shock of unprecedented proportions for the caribbean. indeed, our tourism sector, a lifeline for many economies, came to

alwyn jordan : monitoring and assessing risks to financial stability in the caribbean remarks by mr alwyn jordan, deputy governor of the central bank of barbados, at the financial stability report ( fsr ) peer - to - peer workshop, bridgetown, 16 october 2024. * * * on behalf of the central bank of barbados, it is my great pleasure to welcome you to this peer - to - peer exchange seminar. i'd like to extend a special welcome to dr. petr jakubik from cartac, whose initiative has brought us together for this important event. this is not just another training seminar – it is a dynamic platform for the exchange of ideas, the sharing of expertise and the building of frameworks for future collaboration. in today's rapidly evolving global landscape, where financial stability and economic resilience are increasingly intertwined with central bank regulation, peer exchanges like this are vital. they help us remain agile, informed and equip us with the latest knowledge and best practices to meet the challenges we face as central bankers and regulators. it is therefore a pleasure to be here today to discuss this issue with you, which is at the heart of economic development in the caribbean. we all know that at first glance, financial stability may seem like a dry, technical topic, but for us in the caribbean, it is central to safeguarding our economic well - being. as the global financial system becomes more interconnected, our economies are exposed to a variety of risks – both natural and man - made. today, i want to highlight why financial stability is crucial for our region, with particular emphasis on challenges such as climate change, external shocks, and the evolving financial landscape. i will also shed some light on the difficulties faced by caribbean central banks and other regulators in preparing comprehensive financial stability reports. we all know that financial stability is about ensuring that various entities such as banks, insurance companies, financial markets, and payment systems operate smoothly without triggering major disruptions. when financial stability is maintained, businesses can secure credit, households can borrow and save, and governments can finance development. it is therefore the backbone of economic resilience. for the caribbean, the stakes are particularly high. we are a region of small, open economies that are highly dependent on external trade, tourism, and foreign investment. our economic structure makes us extremely vulnerable to external shocks, whether they are related to global financial conditions, natural disasters, or geopolitical events. any significant disruption to the financial