2019-2020 Annual Report and Statement of Accounts

AREAS OF FOCUS

Monetary Stability Maintain a strong and stable EC Dollar Review and Adopt Revised Reserved Management Framework The Bank will continue to develop the foreign reserve management framework as articulated in its Foreign Reserve Management Investment Policy. The following deliverables are anticipated to be completed in the financial year 2020/2021: 1. Review and selection process for custodial services relevant to foreign reserve management and the Bank’s Pension Fund; and 2. Development of the newly formed Risk and Analytics Unit.

Advise Monetary Council on Monetary and Credit Conditions Consistent with the ECCB Agreement 1. Work will be done to improve the Monetary and Credit Report used to inform and advise the Monetary Council on money and credit conditions. 2. The Bank will continue to work on a framework for currency forecasting to enhance currency management. Financial Stability Ensure a strong, Diversified and reslient financial sector Enhance Risk-based Supervisory and Management Framework In the 2020/2021 financial year, the Bank will undertake the following activities for the continued monitoring and supervision of the financial sector: 1. Complete risk-based assessments of all licensed financial institution which will form the basis of the Bank’s supervisory activities going forward. 2. Continue to review, update and issue appropriate prudential standards aimed at minimising or eliminating regulatory risks.

3. Continue activities relating to Basel II/III implementation towards the target date of December 2021. 4. Engage in market sensitisation and training regarding AML/CFT and Basel II/III implementation. 5. Work on the revised prudential returns and manual of instructions for all licensees.

Improve Payments Infrastructure to Adapt to Evolving Market Expectations The ECCB has embarked on a plan to modernise the payment and settlement system in the Eastern Caribbean Currency Union. The expected result is a payment system that:

1. is governed by a modern and updated legislative framework; 2. encompasses enhanced payment and settlement infrastructures; 3. fosters financial inclusion; and 4. reflects a strengthened oversight and development framework. To improve the Payment System, the Bank will focus on the following areas during the 2020/2021 financial year:

1. Payment System Legislative Reform to include the revision of the Payment System Act and associated regulations and the development of Data Protection Legislation. This critical step is expected to lay the foundation for activities that will be embarked upon in the quest to modernize payment infrastructures and increase system participation. Such activities will include consultations with the respective member governments and other regulatory authorities in the ECCU to obtain their input in the modernisation of the legal framework.

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| EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2019-2020