ECCB 2016/2017 Annual Report

ECCB ANNUAL REPORT 2016/2017

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geopolitical developments, including Brexit and the US presidential elections.

collaboration include: financial stability reporting and Anti-money Laundering/Combating the Financing of Terrorism (AML/CFT). Speaking of the latter, the ECCB Monetary Council took an important decision in July 2016 to have the ECCB assume responsibility for AML/CFT supervision for banks. Pursuant to that decision, the Bank is finalising a Memorandum of Understanding (MoU) between the ECCB and national AML/CFT authorities; has drafted amendments to give legal effect to the decision and has commenced capacity building in the area of AML/CFT, with support from the US Treasury Department. As we look forward to the new financial year 2017/18, we do so with a sense of optimism and anticipation. We are highly motivated to pursue our vision for the currency union which encompasses: 1. A strong EC dollar; 2. A strong and resilient financial system; 3. Sustainable public finances; 4. A single economic and financial space; 5. Single–digit unemployment (full employment); and 6. A striving and thriving citizenry. Cognisant of the global economy and its attendant uncertainties, the outlook for the ECCU economy is generally positive but significant and faster reforms are required to expedite and elevate the growth and employment trajectory. Going forward, priority aspects of the Bank’s work will include: Monetary Stability •  • Ensuring the stability and strength of the EC dollar by maintaining an adequate level of foreign reserves.

In the Eastern Caribbean Currency Union (ECCU), growth was estimated at 2.2 per cent, well below the target of 5.0 per cent per annum agreed upon by ECCB member governments. Relatedly, private sector credit declined for the fifth successive year, forcing a discussion about creditless growth. It is our hope that overall improvement in the macro-economy and the operationalisation of the Eastern Caribbean Asset Management Corporation (ECAMC) will help to address this issue. We continue to lament the paucity of data and statistics in our region. This includes, for example, the absence of labour force surveys in some ECCB member countries, to better guide policy making in respect of employment and labour market reforms. We are also concerned about the ranking of ECCB member countries on the Ease of Doing Business Index . We wish to see the countries move into the top 50 of the Index. Such a rise will require considerable focus and a concerted effort over the next three years. With respect to financial stability, several financial soundness indicators of the ECCU banks improved, including capital adequacy, asset quality and profitability. Relatedly, over the year, the ECCB made significant strides in respect of the frequency and the timeliness of onsite banking examinations. After a hiatus of three years, the Bank resumed meetings of the Regulatory Oversight Committee (ROC) which comprises the ECCB and the non- bank regulators in member countries. The areas of