Governor Greenidge Advocates for a Regional Approach to Addressing Insolvency

• Author(s): Central Bank Of Barbados
• Created Date:11 Dec,2024
• Category: General Press Release,
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Dr. Kevin Greenidge, Governor of the Central Bank of Barbados, delivered the keynote address at the Second Caribbean Insolvency Roundtable, which took place ahead of the INSOL International Bahamas Seminar. The event, organised by INSOL International, the World Bank Group, and the Eastern Caribbean Central Bank (ECCB), brought together experts from across the Caribbean, including senior judges, government representatives, central bankers, and legal professionals, to discuss vital issues surrounding insolvency, restructuring, and economic resilience.

Dr. Greenidge's shared his insights into the region's pressing challenges and emphasised the need for a unified approach to insolvency. Drawing on his extensive experience, including his time with the International Monetary Fund (IMF), he highlighted the importance of not only strong legal frameworks but also the necessary institutional infrastructure to make these policies effective.

Building Resilience Through Harmonised Insolvency Laws

In his remarks, Dr. Greenidge stressed the importance of harmonising insolvency laws across the Caribbean to provide a more consistent and predictable environment for cross-border business activities. He noted that this harmonisation is essential for fostering investor confidence and creating a resilient financial system that can weather both local and global economic challenges.

"While laws are critical, the infrastructure to enforce them effectively is just as important," Dr. Greenidge emphasised. "This is where we must make significant investments, not only in legal reforms but also in the people and institutions responsible for upholding these frameworks."

Climate Risks and Regional Cooperation

One of the key challenges Dr. Greenidge addressed was the growing vulnerability of the Caribbean to climate-related risks. He pointed out that the region's exposure to natural disasters such as hurricanes and floods makes it crucial for insolvency systems to be adaptable to these environmental challenges. He urged the development of climate-resilient financial products and insurance schemes, such as standstill clauses, which could provide businesses with the financial flexibility needed to recover from catastrophic events.

"Governments and financial institutions must collaborate to create financial products that support recovery from climate shocks," said Dr. Greenidge. "At the same time, we must work with international climate finance institutions to develop solutions that strengthen our resilience as a region."

The Importance of Regional Unity

Dr. Greenidge also called for greater regional cooperation to address insolvency challenges. He proposed the creation of a Caribbean Insolvency Commission or Task Force, which could provide technical assistance to member states, help harmonise practices and facilitate the sharing of best practices. He also suggested the development of regional guidelines for insolvency practitioners, which would provide a consistent framework for managing cases across the Caribbean.

"There is much we can achieve together, as a unified Caribbean," he said. "By embracing this spirit of unity, we can better address the challenges facing our economies and position ourselves for long-term success."

A Regional Knowledge Hub

Dr. Greenidge further suggested the creation of a regional repository of case studies that could serve as a knowledge hub for insolvency practitioners and policymakers. This would provide valuable insights into successful restructuring efforts, lessons learnt from past failures, and innovative approaches to insolvency management, all of which could benefit the region as a whole.

Dr. Greenidge concluded his address by reaffirming his commitment to the ongoing work of enhancing the region's insolvency frameworks, ensuring that they support sustainable economic growth, resilience, and recovery in the face of both financial and environmental challenges.

"We are at a crossroads," he stated. "The path we take today will shape the future of the Caribbean. By fostering regional collaboration, strengthening our legal frameworks, and building resilience to climate change, we can create a brighter, more stable future for the entire region."

This roundtable, alongside the INSOL International Bahamas Seminar, has proven to be a vital platform for addressing these critical issues. For Barbados and the broader Caribbean, the discussions during these events are essential as the region navigates global challenges, builds resilience, and positions itself for long-term success.