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)
Credit risk ( continued)
b)
Debt investment securities at FVOCI (continued)
Management considers ‘low credit risk’ for liste d securities to be an investment grade credit rating from Moody’s, S&P or Fitch.
Debt investment securities at Amortised Cost
Other debt instruments (including unlisted participating government securities) are considered to be low credit risk as they have a low risk of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near term. PDs and LGDs for non-traded instruments were based on proxy ratings where they existed.
Cash and cash equivalents
Cash and cash equivalents are held in financial institutions which management considers as strong and there is no significant concentration. Balances with other central banks, balances with foreign banks, cash and balances with local banks and term deposits are short term funds and the Bank therefore considers the risk of default to be very low.
Accounts receivable
Exposure to credit risk is managed by regular analysis of the ability of customers and other counter parties to meet repayment obligations.
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