ECCB 2017-2018 Annual Report and Statement of Accounts

102 ECCB ANNUAL REPORT 2017/2018 Eastern Caribbean Central Bank Notes to the Financial Statements March 31, 2018 (expressed in Eastern Caribbean dollars) (expressed in Eastern Caribbean dollars) 3. Financial risk management …continued b) Credit risk …continued

EASTERN CARIBBEAN CENTRAL BANK NOTES TO THE FINANCIAL STATEMENTS

March 31, 2018

Credit risk measurement and mitigation policies Available-for-sale investment securities and money market instruments and money at call…continued The Bank manages credit risk by placing limits on its exposure to governments, international institutions and U.S. government agencies. It places limits on the amount of risk accepted in relation to one borrower and country. Such risks are monitored on a revolving basis and subject to an annual or more frequent review. The investment guidelines, which are approved by the Board of Directors, stipulate the limits on the level of credit risk by borrower, product, industry, sector and country. They also stipulate the minimum required ratings issued by Moody’s or another recognized rating agency for its international investments. The Bank further manages this risk by ensuring that business is only conducted with its approved banks and by monitoring those banks’ deposit ratings via rating agencies. The global custodian is also monitored daily and periodically reviewed. The table below presents an analysis of the Bank’s foreign debt securities (note 8) and money market instruments and money at call (note 5) by rating agency designation at March 31, 2018 and March 31, 2017, based on Moody’s or equivalent: Available-for-sale securities 2018 2017

Rated (Moody’s) Foreign securities

$

$

2,707,929,718 137,364,748 217,818,408 81,829,901 3,144,942,775

Aaa Aa1 Aa2 Aa3

2,400,625,937 195,307,908 288,930,558 43,737,351 2,928,601,754

2018

2017

Unrated

$

$

624,186 624,186

Domestic securities

624,186 624,186