Banks
In Trinidad and Tobago there are some eight commercial banks and 18 non-bank financial institutions registered with the Central Bank (2012). Many of these banks also operate within other countries in the Caribbean Region. The sector’s two largest commercial banks, First Caribbean International Bank and Republic Bank, account for 60% of all banking assets. Over 80% of bank loans go to the private sector and consumers; there is little inter-bank lending. The Home Mortgage Bank was set up in the 1980s to lead the way in the housing and home finance industry. In 2007 the bank branched out into mortgage institution, trust companies, collective investment schemes and merchant banking. The merchant bank sector is established while the financial system as a whole is large and sophisticated, about 170% the size of the country’s GDP (2006).
Regulation of Financial Services
The Central Bank of Trinidad and Tobago was established in 1964, taking over from foreign regulating bodies such as the British Currency Board which dominated the field. It is run under a system of Corporate Governance with a board being appointed for a three-year term by the President of the Republic. One of the Central Bank’s key mandates is regulation of the banks which is run by the Financial Institution Supervision Department (FISD) under the leadership of the Inspector of Financial Institutions (FIA). The stability of the banking sector is supported greatly by the Deposit Insurance Corporation of Trinidad and Tobago (DIC), which insures depositors against the failure of a financial institution. The Financial Institutions Act of 2008 made membership of this fund compulsory for licensed institutions. According to the WEF’s Global Competitiveness Report (2012-2013) Trinidad and Tobago is second only to Barbados amongst the Caribbean nations when it comes to soundness of banks, scoring 5.8 out of 7, well above the world mean of 5.1.
Development of Financial Services
According to the Ease of Doing Business Index (2012), Trinidad and Tobago comes first amongst Caribbean nations when it comes to protecting investors. It also ranks highly in terms of getting credit, protecting investors and trading across borders. According to the World Economic Forum’s Global Competitiveness Report (2012-2013), financing through local equity market is scored at 3.1 out of a possible 7, just below the world mean of 3.5. The country was also just below the world mean in availability of financial services. In 2012 76% of adults aged 15 and over held an account with a formal financial institution. In terms of affordability of financial services, it scores 3.6, below the world mean of 4.2. Trinidad and Tobago’s financial market ranks 77th out of 144 countries in terms of ease of access to loans. In 2012 8% of adults over the age of 15 had taken out a loan from a financial institution in the last year.
