Central Bank of The Bahamas finds financial stability risks well contained despite elevated global uncertainty

The Central Bank of The Bahamas, together with the Insurance Commission and the Securities Commission, published an assessment finding that financial stability risks remained well contained in 2025 and in the outlook for 2026. Strong capital and liquidity buffers at systemically important institutions supported domestic stability, although geopolitical conflicts and global trade policy uncertainty slightly increased near-term risks. Commercial bank stress tests covering credit, liquidity and interest rate risks showed capital ratios remaining above the 17% regulatory minimum under simulated shocks, against an average capital-to-risk-weighted-assets ratio of 35% to 38.5%. Banking contagion risks remained low, while credit unions and insurers continued to exceed relevant international capital or financial benchmarks. The securities sector presented no material stability risk, and work continued on a Fast Payment System to reduce settlement times and costs. The Central Bank will continue monitoring financial institutions, pursue improvements in credit quality and address an orderly medium-term reduction in excess liquidity. Through the Bahamas Financial Stability Council, regulators will also strengthen analysis of sector interconnectedness, climate and cybersecurity risks, and data coverage.