ECCB 2020-2021 Annual Report and Statement of Accounts

FINANCIAL SECTOR STABILITY

Enhance Risk-Based Supervisory and Management Framework Enhanced Supervision of Licensed Financial Institutions (LFIs):

The supervisory strategy, which is the final component of the Risk-based Supervision (RBS) framework, was implemented in May 2020. RBS (as well as AML/CFT) onsite examinations scheduled over the financial year were suspended, due to travel restrictions and enhanced COVID-19 protocols that hindered the ease of movement within the member countries. In this regard, the Bank developed a remote inspections plan to guide the examination process during the pandemic. In February and March 2021, the Bank conducted two remote RBS inspections to inform the development of remote inspection procedures for the financial year commencing 1 April 2021. In accordance with the COVID-19 regulatory guidance provided by the ECCB, licensed financial institutions (LFIs) were required to provide monthly updates on loan moratoria granted and loans restructured as a result of the COVID-19 pandemic. Off-site surveillance focused on follow-up on the implementation of remedial action items by LFIs. Surveillance activities were also enhanced to include additional reporting and more in-depth assessments and discussions with LFIs in the following areas: 1. Liquidity management and forecasts; 2. Cyber security and Information Technology controls; 3. Business contingency plans specific to the COVID-19 pandemic; and 4. Capital stress testing in light of the economic downturn, potential increase in non-performing loans and provisioning, and the implementation of Basel II/III. The ECCB continued to provide oversight of the Receiverships of ABI Bank Ltd in Antigua and Barbuda, and National Bank of Anguilla Ltd (NBA) and Caribbean Commercial Bank (Anguilla) Ltd (CCB) in Anguilla. The Bank commenced its assessment of the application from the National Commercial Bank of Anguilla Ltd to transition from a bridge bank.

Chart 4 - Moratorium Loans to Total Loans and Advances (%) as at March 2021

Chart 3 - Moratorium Loans - Commercial Banking Sector as at 31 March 2021

EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2020/2021 6