The Cayman Islands Monetary Authority published its Financial Stability Report 2024–2025, finding no broad domestic financial imbalances and broadly healthy household, corporate and regulated sector balance sheets. Household credit risk was assessed as low, while interconnectedness, climate related risk, and cyber and operational resilience risk were rated medium, reflecting the jurisdiction’s exposure to global markets and cross-border financial activity. Banks maintained strong capital, liquidity and asset quality, while investment funds continued to expand and insurers recorded steady growth despite catastrophe, reinsurance and cost pressures. In the authority’s first stress test of regulated mutual funds, more than 90% of funds could withstand hypothetical redemption shocks of 5% to 20% when liquid assets were considered. The authority has added the Cayman Islands Residential Property Price Index to its surveillance and deepened its analysis of climate and cyber risks. Monitoring will focus on cross-border interconnectedness and non-bank financial intermediation, household credit and property markets, climate related risks, and cyber and operational vulnerabilities.
Cayman Islands Monetary Authority finds financial system resilient, flags medium interconnectedness, climate and cyber risks
The Cayman Islands Monetary Authority found the financial system broadly resilient, with no broad domestic imbalances, but rated interconnectedness, climate related risk, and cyber and operational risk as medium. Its first mutual fund stress test showed that more than 90% of funds could withstand hypothetical redemption shocks of 5% to 20% when liquid assets were considered.