The Central Bank of Samoa (C.B.S.) has assured the public that the country's banking system "remains sound" despite the collapse of two major regional banks in the United States. 

Last month the Silicon Valley Bank and the Signature Bank collapsed sending shockwaves throughout the U.S. financial markets and triggering fears of another global banking crisis.

However, in a press release issued on Friday, the C.B.S. said as of 28 February 2023, Samoa’s banking system remains well capitalised with a capital adequacy ratio of 32.6 per cent, which it said was well above the required minimum of 15.0 per cent and continues to be highly liquid with a liquid asset ratio of 31.9 per cent (relative to a 10.0 per cent benchmark ratio).

"Institutionally, all the four commercial banks remain well above the minimum capital requirement, with strong liquidity positions," the C.B.S. said.  

"Moreover, the prudential safeguards imposed by the Central Bank of Samoa (of minimum 15.0 per cent for the capital adequacy ratio) are above and beyond the minimum international capital requirements of 10.5 percent for Basel 3. 

"To this extent, the Central Bank reassures the general public that our banking system remains sound and resilient to date."

According to the C.B.S. the country's official foreign exchange reserves is "well-diversified and safely secured across overseas banks with no direct links to any of the failed banks". 

"At present, the current banking instability in these foreign jurisdictions may only have an indirect effect on Samoa’s economy through the foreign exchange rates, where the volatility has been minimal so far.

"Nevertheless, this does not make us complacent to the potential impact that these overseas events can have on Samoa’s financial and macroeconomic stability.

"We note this current global banking turmoil continues to put the international markets and investors on edge and may have the potential to affect other financial institutions in both the United States and Europe."

The C.B.S. said due to the current global financial conditions, there are fears these developments will lead to a global recession in the near future. 

"In view of this, the Central Bank of Samoa remains vigilant and will continue to monitor this global situation and will take appropriate policy action should any potential adverse impact arise on our small island developing country."