WILLEMSTAD/PHILIPSBURG:--- The Centrale Bank van Curaçao en Sint Maarten (CBCS) has expanded its stress testing framework following recommendations from the International Monetary Fund (IMF) to further strengthen the monitoring of risks in the financial sector.
Stress tests help the CBCS assess how banks, insurers, and pension funds would perform during periods of economic or financial stress. The tests use different scenarios, ranging from normal economic conditions to more severe situations, to evaluate how financial institutions could be affected by shocks such as economic downturns, financial market volatility, or natural disasters. This helps the CBCS identify vulnerabilities early and take timely measures to help safeguard financial stability in Curaçao and Sint Maarten.
As part of the expanded framework, the CBCS further strengthened its banking sector stress tests by introducing macroeconomic stress testing, which assesses how banks could be affected by developments such as lower economic growth, rising unemployment, or weaker tourism activity. At the same time, the CBCS introduced initial stress tests for pension funds to assess risks related to, for example, global financial market turmoil and a local economic downturn. For non-life insurers, the initial stress tests covered scenarios related to potential natural disasters.
Overall, the stress test results show that financial institutions in the monetary union remain broadly resilient under normal and moderate stress scenarios. However, the results also highlight that vulnerabilities become more visible under severe scenarios, particularly in areas such as asset quality, liquidity pressures, market developments, and claims-related risks.
The stress tests also assess the connections between financial sectors and how risks may spread through the financial system during periods of stress. While the results indicate that the financial system remains broadly resilient, the CBCS emphasizes that continued monitoring and forward-looking risk assessments remain essential in an increasingly uncertain global environment.
The expanded stress testing framework forms part of the CBCS’s broader efforts to strengthen its macroprudential oversight and follows recommendations made during the IMF’s 2025 technical assistance mission. In line with IMF recommendations on transparency, the CBCS also presents the stress testing models and their development in the 2026 Financial Stability Report (FSR).
The CBCS will continue strengthening its financial stability framework through enhanced stress testing, improved data collection, and targeted policy measures aimed at supporting a resilient financial system in Curaçao and Sint Maarten.
The 2026 Financial Stability Report is available on the CBCS website at:
https://www.centralbank.cw/publications/financial-stability-reports/2026
Willemstad, May 18, 2026
CENTRALE BANK VAN CURAÇAO EN SINT MAARTEN
