financial system in developing countries, including implicit insurance on bank liabilities, limitations of capital markets, and … lack of appropriate regulations, are sources of financial fragility. The paper concludes that close supervision of bank … penalty on banking activity or charging a fair insurance premium on bank liabilities …

A banking system module is incorporated into the Central Bank of Barbados''s multisectoral macroeconomic forecasting … model, and a medium-term forecast is generated for bank capitalization, profitability, liquidity and nonperforming loans …

in credit allocation, increased independence for the central bank, and a deepening of money and securities markets. Such …