ECCB 2014-2015 Annual Report and Statement of Accounts

EASTERN CARIBBEAN CENTRAL BANK

technical resources to provide equity and business advice to new and existing firms in the export sector. 4. The Eastern Caribbean Unit Trust (ECUT) should be established to provide a wider range of saving opportunities for the population as a whole. 5. The insurance industry should be purposely restructured to provide high quality and reliable products and services to the currency union. There must be a process of consolidation and restructuring to create a consolidated fit-for- purpose industry which serves the objective of managing risk instead of being a risk itself. 6. Credit Unions, which are important socioeconomic institutions and which are growing in systemic importance with their increasing size, must also go through a process of consolidation and restructuring. 7. A Credit Bureau needs to be established as was alluded to earlier. 8. The importance of development banks must be carefully thought through. They also illustrate the issue of lack of critical mass and the limitations of national markets. The case for a single development bank in the currency union can be made as part of the new paradigm for financial sector development. 9. The need for a Deposit Insurance Corporation in the post-crisis period is clearly justified and will be acted on. The practical challenge would be to bring these elements together in an environment which is still oriented towards national institutions but operating

within a competitive international sphere in which technology has trumped the established ways of doing business and made the concept of “national” somewhat impractical. In short, we are now in 2015, well into what is now being described as the new normal. The global crisis has led to a more stringent regulatory regime for the financial sector worldwide. On the one hand, all countries must make every effort to move towards the adoption of the new rules and regulations. On the other hand, they must, as a matter of urgency, develop their domestic money and capital markets to insulate them, to whatever degree is possible. They must then, in addition to meeting the international regulatory requirements, both make alliances with global institutions and establish institutions of their own in the major financial centers where they have a presence through their diaspora. These would not be full service institutions but fit-for-purpose entities to provide correspondent relationships, gather information, arrange investment projects and service the diaspora. The global crisis has led to amore stringent regulatory regime for the financial sector worldwide The single space provides the wider environment to accomplish some of these goals. It provides the opportunity for establishing a professional and rigorous regulatory framework to meet international standards which is a sine qua non for participating in the international financial system. It is also the basis on which the commercial banking system can

ECCB ANNUAL REPORT 2014/2015

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