![Show Menu](styles/mobile-menu.png)
![Page Background](./../common/page-substrates/page0031.jpg)
17
ECCB ANNUAL REPORT 2016/2017
T
he financial system continued to be challenged by
a relatively low level of economic activity in some
member territories; market structure constraints,
including: small size, growing competition; and de-
risking initiatives by correspondent banks. The impact
of BREXIT and policies of the current US government
remain uncertain and have the potential to affect the
ECCU economies via major industries such as tourism,
construction and Foreign Direct Investment (FDI)
inflows. In addition, the Citizenship by Investment
Programme (CIP), for some territories, has come under
scrutiny.
Credit risk was considered one of the major threats
to financial stability, given the high level of non-
performing assets at some commercial banks. The
potential for contagion risk remained high within the
ECCU financial system, given the small population size
of the sub-region.
The major financial stability activities undertaken
during the year were:
Policy Development Towards Systemic Stability and
Enhanced Regulatory and Supervisory Framework
The Bank procured the services of an in-house
consultant to provide training in risk-based supervision,
consolidated supervision, the Basel Core Principles
Assessment and the implementation of Basel II.
Monitoring Threats to Financial System Stability and
Implementation of Measures to Mitigate Risk
Seven on-site examinations and several prudential
visits to commercial banks were conducted. Greater
focus was placed on enhanced monitoring of relevant
licenced financial institutions, to ensure compliance
with the requirements of the new Banking Act,
prudential standards and best practices. Where
applicable, the necessary action was taken.
Execution of the Comprehensive Resolution Strategy
and Technical Assistance Programme
The ECCB received technical assistance from the IMF
through the CARTAC with drafting a procedures manual
for consolidated supervision, licencing procedures
for holding companies, and updates to prudential
standards.
Implementation of an Effective ResolutionMechanism
The Eastern Caribbean Asset Management Corporation
(ECAMC) legislation was passed in the eight member
territories and efforts continued towards full
operationalisation of the entity.
The ECCB continued to formulate a concept note on
the establishment of a Depositor Protection Trust
(DPT) for the ECCU and participated in aWorking Group
established by CARICOM, for the implementation of a
model deposit insurance system for the region.
The Bank sought to strengthen financial integration by providing support towards the
development of strong and well capitalised financial institutions and modern, liquid
and dynamic markets as well as the necessary enabling infrastructure to improve the
efficiency of the financial system.