Overview of CDB's Callable Capital and Risk Management

This report reviews the governance, legal framework, risk scenarios, and shareholder processes related to the Caribbean Development Bank's callable capital, emphasising its robustness and the remote likelihood of extreme stress events.

Legal Framework Governing Callable Capital

The legal provisions specify that CDB’s callable capital, totaling US$1,375.13 million as of December 2023, can only be called to meet obligations from borrowings or guarantees, not general operations.

Reverse Stress Test Findings and Extreme Risk Scenarios

A reverse stress test identified that the shocks needed to deplete CDB’s equity are highly extreme and unlikely.

Shareholder Processes and Commitments

Shareholders, including the UK, have confirmed that their callable capital commitments are legally binding and contingent liabilities.

Conclusion on Callable Capital and Risk Resilience

CDB’s US$1,375.13 million callable capital reflects a strong shareholder commitment, with a highly remote risk of extreme stress events depleting its equity.