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144 / BUSINESS, FINANCE ECONOMICS IN EMERGING ECONOMIES VOL. 2, NO. 1, 2007 MONETARY AND FINANCIAL STABILITY: ISSUES FOR CARICOM ECONOMIES IN THE DOMESTIC SECTOR SHARON G. BRANCH1 ABSTRACT Monetary and nancial stability are important contributors to economic growth and development. Instability of any kind has a negative impact on the economy as a whole, since it deters foreign investment and hinders economic growth. Thus, it is necessary for economies to not only focus on achieving economic stability, but to guard the economy against monetary and nancial fragility by striving to achieve stability in all spheres of the country. Realizing the important role that financial stability plays in promoting economic growth and development, this research seeks to highlight important issues for CARICOM countries with respect to achieving such stability. The main focus of this research is to examine indicators used by CARICOM countries to measure nancial stability, along with the steps and challenges found in achieving stability. Financial stability analysis will focus on the new tools for assessing financial system soundness and the challenges that these will pose for nancial regulators. 1 The views expressed in this paper are those of the author and do not necessarily represent the Central Bank of The Bahamas. The paper should be considered a work in progress and as such the author would welcome any comments on the written text or any of the issues cited. The author would also like to thank all staff of the Research Department, especially Ms. Jamell Bodie for her valuable assistance. SHARON G. BRANCH / 145 1.0 Introduc