BASSETERRE, St. Kitts – WHILE the international economic crises continue to cripple larger economies, the region boasts one of the most stable financial sectors in the world, allowing it to be virtually unaffected in that area.
This statement was made by Governor of the Eastern Caribbean Central Bank (ECCB) Sir K. Dwight Venner during his 2008 Economic Review of the Eastern Caribbean Currency Union (ECCU), held on January 29.
Venner said that in meetings prior to his presentation, the decision was taken to complete the regulatory framework for the region’s financial system and to construct money and capital market arrangements to facilitate the provision of liquidity and investment finance.
“We have been very fortunate that the Canadian banks which are the largest banks in the Currency Union, are well regulated in their home jurisdictions and have been rated number one in the world. Notwithstanding, we have been maintaining very close contact with the Bank of Canada, the Office of the Superintendent of Financial Institutions (OSFI), and the headquarters of the banks in Toronto and their senior regional representatives.
“In the case of the domestic banks, they are well capitalised and we have strengthened our oversight of them. We have established a contingency team at the ECCB, with senior and experienced staff to maintain constant oversight of the situation and develop contingency plans should a crisis arise.”
Sir Venner added that the ECCU has been advising its Member States to urgently complete the establishment of Single Regulatory Units (SRUs), to regulate institutions in the financial system which are not supervised by the ECCB. Such institutions include insurance companies, credit unions, building societies and money services institutions.
Venner stressed the urgency to maintain stability of the region’s financial sector, referencing the adage “When your neighbour's house is on fire throw water on yours”.
“We are therefore putting in place a regulatory framework and capability which is comprehensive, sophisticated and sensitively balanced between rules, regulations, prudential guidelines and self regulation. The public can be assured that everything that is humanly possible is being done to preserve the safety and soundness of our financial institutions.”
The Governor indicated that discussions are ongoing with the Ministries of Finance and broker dealers to enhance the effectiveness of the Regional Government Securities Market to provide financing to the governments for recurrent and capital expenditure on a regular basis and at a reasonable cost.
He added that the ECCB is currently working toward creating an Eastern Caribbean Enterprise Fund (ECEF) to facilitate investment in the productive sectors, adding that such initiatives “are important to facilitate the transformation of our economies into highly competitive and diversified entities which can take advantage of the opportunities that will present themselves when the recovery comes”.
