2018 Financial Stability Report

II. Financial Markets The financial markets in the ECCU are primarily the interbank market and the Eastern Caribbean Securities Market (ECSM), which comprises of the Regional Government Securities Market (RGSM) and the Eastern Caribbean Stock Exchange (ECSE). An official Interbank Market was established in 1986 in an attempt to strengthen the infrastructure for liquidity management in the ECCU. The IBM was meant to provide a transparent platform for the lending and borrowing of funds between licensed commercial banks in the region. The ECSE was designed to provide an alternative mechanism for institutions to raise capital within the regional financial system. It facilitates primary and secondary market trading, thereby giving investors an opportunity to raise capital through new issues of securities as well as by trading in existing securities. The ECSM comprises the RGSM and the ECSE. The RGSM was established in November 2002 to facilitate and further the improvement of fiscal management in the ECCU. On the equity side, there are presently thirteen (13)

corporate securities listed on the market. As at December 2018, total market capitalisation was EC$8.3 billion, an increase of EC$31.3 million or 0.4 per cent compared to that of 2017. This increase in market capitalisation is attributed mainly to the listing of the Grenada Cooperative Bank Ltd in July, a rights issue and an additional public offering by The Bank of Nevis Ltd, as well as a marked appreciation in the share price of the St Kitts-Nevis-Anguilla National Bank Ltd, which contributes 5.0 per cent of total market capitalisation. Regulations The regulation and supervision of the financial system is conducted by three principal entities namely the Eastern Caribbean Central Bank (ECCB), the Eastern Caribbean Securities Regulatory Commission (ECSRC) and the Single Regulatory Units (SRU) in each member state (Figure 2). III.

Financial Stability Report 2018

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