ECCB 2016/2017 Annual Report

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ECCB ANNUAL REPORT 2016/2017

(expressed in Eastern Caribbean dollars) Eastern Caribbean Central Bank Notes to the Financial Statements March 31, 2017 (expressed in Eastern Caribbean dollars)

EASTERN CARIBBEAN CENTRAL BANK NOTES TO THE FINANCIAL STATEMENTS

March 31, 2017

3. Financial risk management … continued f) Fair value …continued Fair Value Hierarchy …continued The following table presents the Bank’s financial assets and liabilities that are measured at fair value at March 31, 2016: Level 1 Level 3 $ $ Financial assets Commercial paper 381,521,788 - Certificate of Deposits 40,500,168 - Financial assets held for trading 245,988 - Available-for-sale – foreign investment securities 2,862,778,837 - Available-for-sale – domestic investment securities - 421,686 3,285,046,781 421,686

Level 1

Level 3

$

$

Financial liabilities Financial liabilities held for trading

6,196,019

-

g) Capital risk management The Bank’s objectives when managing capital are:

 Safeguard the Bank’s ability to continue as a going concern  Manage and safeguard the value of the Eastern Caribbean currency  Maintain a strong capital base to support its developmental activities

The Bank manages capital through the maintenance of a general reserve according to prescribed guidelines as mandated in the ECCB Agreement Act 1983 (note 2t). As at March 31, 2017, the general reserve was $111,106,309 (2016: $104,867,765).

h) Operational risk Operational risk is the risk of direct or indirect loss in both financial and non-financial terms arising from a wide variety of causes associated with the Bank’s processes, personnel, technology and infrastructure. It may also arise from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the Bank’s operations and are faced by all departments.

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