ECCB 2022-2023 Annual Report and Financial Statements

Eastern Caribbean Central Bank Annual Report 2022 - 2023

supervisory capacity related to Pillar 2, specifically stress testing with scenarios and IRRBB. CARTAC also continued its technical assistance with the development of prudential standards. Integrating Climate-Related Financial Risks in the Eastern Caribbean In keeping with its thrust to address climate-related financial and environmental risks in the ECCU and building resilience in both systems and operations in the region, the ECCB has integrated climate related financial risks into its Risk-Based Supervision Framework. Phase One of the Adapt’Action Facility for Integrating Climate-Related Financial Risks in the Eastern Caribbean was completed successfully. The project was aimed at building capacity among national regulators and Non bank Financial Institutions (NBFIs) on: ; The importance and impact of potential climate-related financial risks; ; Methods for monitoring and supervising the identified risks; and ; Inclusion of climate-related financial risks issues in strategic plans. The second phase was developed from workshops conducted with the ECCB, the national regulators and development banks. The procurement of a consultant to assist the national regulators with assessing climate related risks among their licensees, was critical to the execution of that phase. Additionally, the ECCB collaborated with the Nationally Determined Condition (NDC) Partnership to host capacity building and institutional strengthening sessions with LFIs, for a period of two years. Those

Regulation and Standards Development and Issuance of Prudential Standards The ECCB updated its suite of prudential standards, to build financial sector resilience and maintain the financial safety and soundness of LFIs. The Bank issued the following prudential standards with the stated effective dates: z Consolidated Supervision - 1 April 2022; z Related Party Transactions - 1 November 2022; z Internal Capital Adequacy Assessment Process (ICAAP) - 1 January 2023; z Information Technology Risk Management - 3 January 2023; and z Electronic Banking - 1 February 2023 The ECCB finalised the Capital Measurement Standard as part of its Basel II/III implementation framework for issuance to the industry. Following industry consultation, the ECCB continues to finalise the Stress Testing and Market Risk Management prudential standards. The ECCB took further steps toward the development of prudential standards in the areas of Climate related Financial and Environmental Risk, Interest Rate Risk in the Banking Book (IRRBB), and Liquidity Risk Management. The issuance of the Fit and Proper Standard, and the Prudential Standard on Corporate Governance remains contingent on the passage of the Banking Act amendments in all member countries. Technical Assistance The ECCB continued to benefit from the Caribbean Regional Technical Assistance Centre’s (CARTAC’s) technical assistance programme, for the implementation of Basel II/III. Over the period 10 to 14 October 2022, CARTAC provided training to build

In keeping with its thrust to address climate-related financial and environmental risks in the ECCU and building resilience in both systems and operations in the region, the ECCB has integrated climate-related financial risks into its Risk-Based Supervision Framework.

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