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By Kevon Browne
St. Kitts and Nevis (WINN): The Eastern Caribbean Central Bank (ECCB) has released its Annual Financial Report for the 2023/2024 fiscal year, detailing plans for the 2024/2025 fiscal year. The report outlines the ECCB’s initiatives to strengthen financial regulation, supervisory frameworks and financial stability across the Eastern Caribbean Currency Union (ECCU).
Supervision
In the 2024/2025 financial year, the ECCB plans to strengthen its regulatory and supervisory framework to address emerging risks, including climate-related financial risks and cyber risks. Key initiatives include:
Basel II/III Capital Adequacy Framework: Implement Pillars 1 and 2 of the Basel II/III framework to strengthen the capital position and risk management functions of licensed financial institutions (LFIs), with a go-live report by Q3 2024 and a review by Q4 2024.
Development of legal and regulatory infrastructure
The ECCB aims to establish a macroprudential risk policy framework and prepare financial stability legislation for the ECCU. This legislation will be drafted after stakeholder consultation and submitted to the member states.
Office of Financial Conduct and Inclusion
The ECB will develop a legislative framework and establish an Office of Financial Conduct and Inclusion, which will focus on regulating financial consumer protection, promoting market integrity, ensuring a competitive market environment, and improving financial literacy and inclusion.
Modern bankruptcy framework
The ECB will work with member governments and stakeholders to develop modern bankruptcy laws to strengthen the region’s financial resilience.
Regional Standards Setting Bodies
Consultations will continue on the establishment of a regional standard-setting body to strengthen regulatory standards and oversight of the non-bank financial sector.
Establishment of ECCU Credit Bureau
The ECCB will support the conduct of credit bureau operations, provide regulatory oversight, and conduct credit reporting education and awareness campaigns.
Strengthening the regulatory framework for anti-money laundering and counter-terrorist financing
The Eastern Caribbean Central Bank will assist member countries in implementing AML/CFT risk-based regulations and provide training to regulators, the legal community and law enforcement agencies.
Secured Transactions and Collateral Registration
The Eastern Caribbean Central Bank will work with the International Finance Corporation to provide legislative drafting and consultation for the Eastern Caribbean Currency Union’s secured transactions and collateral registry scheme.
Integrating climate-related financial risks into regulation
The ECB will provide technical assistance for stress testing, scenario analysis and the development of a reporting framework for climate-related financial risks.
Greening the Financial System Initiative (GFSI)
The ECCB is establishing committees and working groups to support the development and implementation of a green finance strategy and climate risk framework. The bank will lead the dialogue with development partners and member states to implement the Renewable Energy Infrastructure Investment Fund (REIIF).
Payments Modernization and Financial Inclusion
The Eastern Caribbean Central Bank will continue its efforts to upgrade the payment system infrastructure, including developing policies to implement the Instant Payment System (IPS) and supporting credit unions’ integration into the Eastern Caribbean Automated Clearing House.
Environmental, Social and Corporate Governance
ECCB is developing a social media strategy to enhance communications and will work with the University of the West Indies to upgrade the ECCB savings and investment courses. The bank will also consult on a water recycling plant on campus.
Digital and data transformation
ECCB will continue to work on the BOOST project, prioritize data analytics throughout the audit process, and sponsor AI and web development camps to solve real-world problems in ECCUs.
Legislative Agenda
The ECB will draft and advise on financial stability legislation, deposit insurance legislation and amendments to the 2015 Banking Act to ensure a sound financial structure and protect depositors’ funds.
The Eastern Caribbean Central Bank’s 2023/2024 Annual Financial Report details plans for the 2024/2025 fiscal year, focusing on regulatory strengthening, financial stability, and initiatives to support economic growth and resilience in the region.
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