The Central Bank of Barbados (CBB), in its report “Artificial Intelligence and Financial Stability in Barbados” prepared jointly with the Financial Services Commission (FSC), found no measurable evidence that AI currently poses a systemic risk to Barbados’ financial system, but urged closer monitoring of how the technology is used across the sector. The assessment, published alongside the 2025 Financial Stability Report, drew on a review of international evidence. The report identified cyber and AI-related risks among developments being closely monitored by regulators, cautioning that “sound governance” will determine whether benefits outweigh risks, and that institutions adopting AI require clear accountability for their models, human oversight of material decisions, strong cybersecurity and prudent management of dependence on outside providers, with customer protection at the centre. It noted that the Financial Stability Board (FSB) has encouraged authorities to close gaps in data on how institutions use AI. The CBB said it will continue to monitor AI use across the financial system with the FSC and strengthen its supervisory capacity. The report acknowledged AI is reshaping the global financial sector through uses including credit assessment, fraud detection, customer service, risk management and operational efficiency, and said AI could strengthen financial stability through better analytical tools, sooner fraud detection, improved early-warning systems, RegTech for compliance and SupTech for supervision, while warning that opaque models, biased algorithms, inaccurate outputs and weak human oversight can create new vulnerabilities, generative AI can make phishing, fraud and misinformation more sophisticated, and reliance on a small number of AI