ECCB 2016/2017 Annual Report

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ECCB ANNUAL REPORT 2016/2017

With respect to the development thrust, the main projects targeted improving access to financial services by Medium, Small and Micro Enterprises (MSMEs).

An improvement in the US interest rate environment contributed largely to the turn-around in the financial performance of the Bank as interest earned on the foreign reserve portfolio increased. This improvement in the foreign reserve portfolio bodes well for the stability of the EC dollar, as it provides the pool of liquidity needed to ensure its convertibility. Although credit markets remained liquid, extension of credit, especially by commercial banks, continued to be impacted negatively by the rebalancing of balance sheets by businesses and households, adherences to stricter standards for lending, and the fragile recovery of real economic activity. The strategic platform for executing financial sector reform initiatives is centered on the establishment of a Single Financial Space as required by the Revised Treaty of Basseterre, and the continued implementation of key elements of the ECCU Eight Point Stabilisation and Growth Programme. Furthermore, the programmes and initiatives are consistent with fulfilling themandate outlined in Article 4 (3) of the ECCB Agreement Act 1983, particularly as it relates to maintaining a stable and sound financial system. During the financial year, work intensified on the implementation of the Comprehensive Resolution Strategy for Strengthening the Resilience of the Financial System and building a dynamic and diversified STRENGTHENING FINANCIAL STABILITY AND MARKET DEVELOPMENT

financial system through the development of a range of products and markets.

In collaboration with international financial institutions and regional stakeholders, the ECCB was able to achieve some major targets in its attempt to improve the regulatory and supervisory framework for licensed financial institutions, non-banks and insurance companies in the currency union. With regard to strengthening resilience, the focus was on creating a legislative and institutional infrastructure that would facilitate: better macro-prudential regulation/supervision, improved system-wide supervisory powers, and a more robust insolvency framework and improved access to information on the creditworthiness of borrowers. Some of the key initiatives being undertaken in pursuit of these objectives include the establishment of the Eastern Caribbean Asset Management Corporation (ECAMC). In addition, work continued towards the formation of the Eastern Caribbean Financial Services Commission (ECFSC), the ECCUCredit Bureau, the Eastern Caribbean Partial Credit Guarantee Corporation (ECPCGC) and the Eastern Caribbean Appraisal Institute (ECAI). With respect to the developmental thrust, the main projects targeted improving access to financial services through Medium, Small and Micro Enterprises (MSMEs) by strengthening the product range of selected financial institutions; increasing business literacy of Micro and Small Enterprises by providing