2018 Financial Stability Report

C HAPTER 4:

P OLICY

I NITIATIVES FOR

E NHANCING

F INANCIAL

S TABILITY IN THE

E CCU

AML/CFT framework for licenced financial institutions (LFIs) under the Banking Act.

4.0 Overview In the ECCU, several initiatives are expected to assist in enhancing financial stability. These include; (1) new regulatory and supervisory arrangements, (2) the establishment of the ECCU Credit Bureau, (3) establishment of a regional deposit Insurance Corporation, (4) development of a macroprudential policy framework. New Supervisory Arrangements Within the ECCB, the Bank Supervision Department (BSD) works to provide the highest level of financial stability assurance and supports monetary policy of a strong and stable Eastern Caribbean Dollar. The Bank Supervision Department has recently instituted a risk-based supervisory (RBS) framework. The RBS is a comprehensive, formally structured system that assesses risks within the financial system, giving priority to the resolution of those risks. Work on the implementation of Basel II/III remains ongoing. Simultaneously, the BSD continues to work on the development of an 4.1

During 2018, the ECCB is in the process of establishing regulations for the Caribbean Credit Card Corporation (4Cs). Though discussions are ongoing, it is expected that this will increase the number of LFIs within the region. Additionally, discussions are ongoing for the regulation of systemically important credit unions in the ECCU. Presently, the ECCB is working towards the development of a framework for identifying systemically important financial institutions. It is anticipated that upon completion and adoption, the framework will be used for both commercial banks and credit unions.

4.2

The Establishment of the ECCU Credit Bureau

The Harmonised Credit Reporting Bill (HCRB) was developed to provide for the proper administration and licensing of credit bureaus. Additionally, the Bill provides for

Financial Stability Report 2018

36