2018 Financial Stability Report

P reface –

F rom the

G overnor

As the ECCB continues in its pursuit of the Strategic Objective of ensuring a strong, diversified and resilient financial sector, it is incumbent upon us, as the regulatory and monetary authority to remain accountable to you, the people of the Eastern Caribbean Currency Union (ECCU). This edition is the third instalment of our Financial Stability Report and represents even more so, the efforts of the ECCU’s regulatory authorities to mitigate and report on systemic risk in the region. This regulatory partnership serves to both enhance the reporting framework and enrich the conversation surrounding risks emanating from within the ECCU. As with new beginnings, we continue to face challenges, especially as it pertains to data limitations within the credit union and insurance sectors. These limitations have served to restrict the scope and coverage in this Report. This edition of the financial stability report continues to provide readers with an assessment of the main developments and vulnerabilities in the ECCU’s financial system. The report is divided into five (5) chapters: 1. The Macro-Financial Environment and Key Risks Influencing the ECCU Region. 2. Financial Performance and Soundness of Deposit-Taking Institutions: Banking and Credit Union Sectors. 3. Financial Performance and Soundness of Non-Deposit-Taking Institutions: Insurance Companies. 4. Policy Initiatives for Enhancing Financial Stability in the ECCU. 5. Outlook This issue of the FSR identifies four main vulnerabilities within the financial sector and as with previous reports, boxes are used to highlight key information for understanding. Consequently, in this report, we provide for you, an overview of the insurance sector and its role in financial stability in our region. Additionally, work continues on the development of the macroprudential framework as well as new supervisory arrangements by the ECCB. These policy initiatives reinforce our commitment to the people of the ECCU.

Financial Stability Report 2018

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