ECCB 2020-2021 Annual Report and Statement of Accounts

FINANCIAL SECTOR STABILITY

Money Laundering and Countering the Financing of Terrorism (AML/CFT). The RBA Toolkit includes a suite of seven interrelated modules and templates, which can support AML/CFT supervisors in developing practical skills to create an effective regulatory environment. The training will be delivered over an 18-month period. Over 100 regulators from across the ECCU participated in The World Bank RBA Toolkit Training. The following modules have been covered since May 2020: ƒ Module 1 - basic concepts of AML/CFT and the Financial Action Task Force (FATF) 40 Recommendations, with a focus on risk-based supervision. ƒ Module 2 - the risk-based design of the AML/CFT supervision framework for all financial sector supervisors. ƒ Module 3 and 4 - Module 3, which focuses on the legislative review of member countries, is scheduled to run parallel with Module 4, which focuses on risk-based onsite and offsite supervision processes and procedures. Basel II/III Implementation The ECCB’s Basel Implementation Team, which was established in February 2018, continued implementation activities in three major areas: (i) reviewing of banks’ Basel Implementation Plans, (ii) finalising the Basel Capital Standard (BCAR) and (iii) completing an instructions manual to guide completion of the BCAR template for conducting the Quantitative Impact Study (QIS). The pilot phase of the QIS was launched in February 2021 with four banks. The ECCBalso continued its ongoing sensitisationof licensedfinancial institutions,members of theboardand seniormanagement of LFIs, external auditors and other key stakeholders. The ECCB has begun to see signs of real progress with the completion of banks’ Basel Implementation Plans. The ECCB continues to work with the Basel Implementation Working Group, comprising representatives from the ECCB and LFIs, and other relevant stakeholders to see the implementation process to fruition by December 2021. ECCU Credit Bureau In February 2021, the ECCB issued a licence to Creditinfo ECCU Ltd to carry on credit reporting business. The credit bureau has commenced steps towards completion of its development phase. Deposit Insurance A draft ECCU Deposit Insurance Bill was prepared during the 2020/21 financial year as a critical step towards the establishment of a deposit insurance system for the ECCU.

About the ECCU Credit Bureau Project A ccording to the International Finance Corporation’s Credit Bureau Knowledge Guide (2006), “a credit bureau is an institution that collects information from creditors and available public sources on a borrower’s credit history. The bureau compiles information on individuals and/or small firms, such as information on credit repayment records, court judgments, and bankruptcies, and then creates a comprehensive credit report that is sold to creditors.” Credit bureaus are crucial building blocks that enable greater access to financing for both individuals and small businesses. Credit bureaus also allow customers to make more informed business decisions by making financial data, collated with the informed consent of the customer, available to members. The data collected allows customers to make fact-based decisions about whether to grant credit or not, and the conditions under which such credit should be extended. A credit bureau can be a significant monitoring tool that may be used by financial governing authorities to research and monitor trends in the economy. A credit bureau in the ECCU will therefore improve citizens’ access to loans from financial institutions and will help to reduce the cost of borrowing. The ECCUCredit ReportingAct has beenpassed in theParliaments of: Antigua and Barbuda, the Commonwealth of Dominica, Grenada, Montserrat, Saint Christopher (St Kitts) and Nevis, and Saint Vincent and the Grenadines.

Improve Payments Infrastructure To Adapt To Evolving Market Expectations The Board of Directors and the Monetary Council approved three policy documents, which are prerequisites to modernising the payment system in the ECCU: 1. Policy Objectives and Principles for Regulating Electronic Retail Payment Services in the ECCU; 2. Policy Framework

EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2020/2021 9