ECCB
ANNUAL REPORT 2014/2015
6
EASTERN CARIBBEAN CENTRAL BANK
be reformed by restructuring the national banks and
leveraging the foreign banks into greater alignment
with the region’s growth and development objectives.
Within the single space the major challenges would
be the creation of synergies between organisations
and markets, and developing appropriate financial
instruments for different types of firms. With
respect to synergies, the relationships among strong
commercial banks, both national and foreign, the
consolidated development bank and the ECEF
are critical. The ECEF would supply equity, the
development bank, long term capital on reasonable
terms with a moratorium, and the commercial banks
working capital. This would be bundled with technical
assistance and other critical facilitatory arrangements
including factoring and leasing, export credit and
insurance, and broker/dealership services.
The final challenge facing the ECCU member
countries in their development thrust is the critical
task of developing a domestic private sector that
is regionally and internationally competitive and
capable of generating foreign exchange inflows and
creating quality jobs. While foreign direct investment
is important, it cannot replace a dynamic domestic
private sector. In fact, the countries can maximise
the benefits from foreign direct investment if there is
a vibrant domestic sector to interact with the foreign
investors. Indeed, this type of private sector is also
an attraction for foreign investment.
The new Banking Act is the evidence of a fundamental recognition of the need for a
new regime in our financial system
The new Banking Act is the evidence of a fundamental
recognition of the need for a new regime in our
financial system. It symbolises the need for a more
rigorous and legally supported arrangement for the
regulation of commercial banks which, as was noted
earlier, are the dominant institutions in the ECCU
financial sector. It also acknowledges the need for
reduced fragmentation in our financial system which
would provide the economies of scale and scope to
lower costs and increase the viability of financial
products. In addition, it provides the opportunity for
a structural reorientation of the lending portfolios of
banks towards the productive sectors of the economies.
It is therefore fair to say that, with the new Banking
Act, we have finally entered a new era in the banking
and financial history of the ECCU which is expected
to see the creation of a banking and financial system
that is more aligned with the growth and development
objectives of the member countries.
K Dwight Venner
Governor
