ECCB 2022-2023 Annual Report and Financial Statements

Eastern Caribbean Central Bank Notes to the Financial Statements For the year ended 31 March 2023 (Expressed in Eastern Caribbean dollars)

3. Financial risk management ( continued)

a) Introduction and overview (continued)

Risk Management Structure ( continued)

The key committees for managing risks are as follows:

Board Audit and Risk Committee

The Board Audit and Risk Committee (BARC) assists the Board in relation to the oversight of the Bank’s governance, risk, internal controls and the Bank’s financial reporting processes. The BARC reviews the Bank’s risk appetite in line with strategy, identifies and monitors risk exposure and the risk management infrastructure, oversees the implementation of strategy to address risk, and assesses the strength and effectiveness of the risk management and internal control framework. Additionally, the BARC monitors the integrity of the financial statements and is responsible for oversight of both the Internal Audit and Enterprise Risk Management functions and reports back to the Board. The BARC reviews the effectiveness of the policies, procedures and systems in place related to, among others, operational risks, compliance, Information Technology (IT) (including cyber-security) and internal security.

Board Investment Committee

The purpose of the Board Investment Committee (BIC) is to assist the Board in fulfilling its responsibilities in the management of the foreign reserves as per Part VI of the ECCB Agreement. The BIC is responsible for submitting recommendations to the Board for approval regarding the following:

(i) Changes to the Foreign Reserve Investment Policy; (ii) Changes to the Strategic Asset Allocation; (iii) The retention and termination of asset managers and custodian; and (iv) Changes to the Terms of Reference for the Reserve Management Committee.

The BIC also receives and considers periodic reports on the following:

(i) Compliance of the external fund managers and the internal fund manager with the Investment Guidelines; (ii) Performance of the external fund money managers and the internal fund manager; and (iii) A review of the custodian’s performance.

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