Outcome of the Financial Stability Committee discussions for Q4 2024 |27 February 2025
The Financial Stability Committee (FSC) met on February 17, 2025 to discuss matters that could potentially impact the country’s financial stability observed during the last quarter of the year 2024.
In terms of domestic developments, members took note of the weak performance of the tourism industry for the year 2024 and were advised of an anticipated rebound in visitor arrivals for 2025.
The Committee was also apprised of the main risks to the domestic banking and non-banking sectors. Furthermore, an overview of the performance of the banking and insurance sectors was provided, including a status of insurance claims for both residential and business properties in the aftermath of the December 7, 2023 events.
On the global front, members were apprised of key international developments impacting the world economic outlook, particularly the heightened uncertainty to global geopolitics and elevated trade tension.
The policy shift of the United States government towards the imposition of tariffs has increased concern about other countries setting trade barriers.
However, members noted the stable economic growth coupled with a decrease in global inflation as projected by the International Monetary Fund.
Additionally, the Committee was briefed on developments impacting the current and future movement in international commodity prices.
The Committee was presented with the proposed work plan for the year 2025, reflecting the continued effort towards developing the country’s Financial Stability Framework.
An update on the country’s application to become an ordinary member of the International Organisation of Securities Commission (IOSCO) was also provided.
Emphasis was placed on the collaborative efforts of the different institutions and the need for consultation with the relevant stakeholders to undertake the proposed legislative reforms.
Additionally, members noted the benefits for Seychelles to gain full membership of IOSCO, which include enhancing the country’s credibility and its ability to collaborate with other jurisdictions in enforcing securities laws and fostering investor protection.
The Committee concluded by recognising potential risks, both globally and locally, that could negatively impact domestic financial stability and economic growth. These include downside risks such as intensified geopolitical tensions, expected price increases and trade supply disruptions.
Mindful of these eventualities, members emphasised the need to enhance the collaborative effort between relevant authorities and stakeholders to effectively mitigate and manage the impact of potential risks on the domestic financial system.
Contributed