The Central Bank of Solomon Islands (CBSI) has formally released its Financial Stability Report (FSR) for the second half of 2022, outlining a general positive assessment in terms of the stability of the nation’s financial system within this period.
FSR is one of the main reports from CBSI which is produced twice a year, to provide the Bank’s assessment of the state of the domestic financial system. This is a requirement under the CBSI Act 2012.
Key amongst the main details of this report is the clear indication that despite being exposed to negative developments overseas, including global shocks such as inflation and the current war in Ukraine, the Solomon Islands financial system remained resilient throughout the second half of 2022.
The CBSI assessment showed that the financial system is well capitalized, and has generated adequate income to cushion the operating expenses during this period. Whilst common vulnerabilities and risks remained within the system, Central Bank noted that these were managed to levels that did not affect profitability and solvency of the Licensed Financial Institutions (LFIs) in the country. At the same time, CBSI strengthened its supervisory framework over the course of this period, which ensured the overall financial system remains stable.
In summary, the Solomon Islands financial system remained stable in spite of the effects of the global risks. CBSI also acknowledged that current risks are well managed on the back of the strong collaboration between CBSI and LFIs.
– CBSI
