Upgrading the essential systems countering financial vulnerability in Honduras

With continued efforts since the late 1990s, Honduran financial authorities have upgraded their supervisory and regulatory capacities. They have also modified their legal, organizational, and institutional framework in line with international standards. As a consequence, Honduras’ financial markets remain fairly stable, while most of its financial institutions, especially banking institutions, show their soundness better than ever. However, financial market has an evolving nature. So, what should the role and function of financial authorities be? The interconnectedness of global financial markets, together with the growing uncertainty of world economic environments, makes countries, more specifically emerging economies, more vulnerable to external shocks. In these circumstances, the micro stability of the financial sector alone does not guarantee system stability as a whole. This is the reason why countries should keep their macro fundamentals robust and stable, on the one hand. (The rest omitted)