ECCB 2023-2024 Annual Report

EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2023 - 2024

on greening the financial system. The concept design for the planned regional Renewable Energy Infrastructure Investment Facility (REIIF/ Facility) was completed and approved, marking a critical step towards the materialisation of the Facility. The detailed design is currently underway and includes financing windows for technical support services, risk mitigation, integration infrastructure and results-based incentive mechanisms. The Facility is aimed at improving availability and access to finance to accelerate renewable energy deployment across the ECCU. The Green Financial System Initiative comprises two components: (i) Multi-year projects on the development and implementation of an ECCU green finance strategy and action plan; and (ii) Climate risk assessment and stress testing tools and frameworks for the banking sector. The ECCU Green Finance Enterprise Survey was launched in December 2023 in close collaboration with Central Statistical Offices across the region. The survey aims to assess the readiness of businesses for climate change. Data will be collected across all sectors in the ECCU on private sector: challenges, climate transition plans, mitigation and adaptation financing needs. The findings will inform the strategies to optimise the mobilisation of private capital, within and outside the ECCU, to finance the green economy transition. R eserve M anagement The Bank engaged in a comprehensive review of the foreign currency reserve management framework with the assistance of the World Bank’s Reserves Advisory Management Partnership (RAMP) and an external consultant.

The Bank’s risk tolerance or appetite for losses was revisited in addition to establishing a link between reserve management and the Backing Ratio. The Backing Ratio serves as the preeminent metric which the Bank uses to measure the strength of the EC Dollar and is enshrined in the ECCB Agreement. Capacity building in developing a more robust credit risk management framework was provided to the Risk and Analytics Unit by the World Bank’s RAMP, to facilitate further operationalisation of the Unit’s credit risk function. The Unit examined the current credit risk management framework of the Bank’s reserve management function, and commenced the design of tools for use in measuring and monitoring the credit risk of the reserve portfolios. The Reserve Advisory and Management Partnership is a program developed within the World Bank Treasury that delivers advisory services, hosts executive training, and provides asset management services—all within a global network of public asset managers. The Partnership was established in 2001 and serves over 70 members, including mostly central banks as well as international financial institutions, pension funds and sovereign wealth funds. Together, RAMP members manage over $2 trillion of sovereign assets. Reserve Advisory and Management Partnership (RAMP)

The ECCB became a member of RAMP in 2017.

More About RAMP

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