ECCB 2023-2024 Annual Report

EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2023 - 2024

a strategy round table discussion, held on 30 January 2024, with regulators from the non-bank financial sector (national regulators) across the ECCU, to discuss the way forward on the integration of climate-related risks into their risk-based supervision framework. A2F Consulting conducted a readiness survey of the licensees of the national regulators, to understand their level of awareness and preparation for the monitoring and management of climate risks. Additionally, business associations, lending institutions, and insurance and investment companies separately participated in capacity building sessions, over the period 18 to 22 March 2024. A2F Consulting completed the following deliverables: ; A guidance report on strengthening the supervision of climate-related risks in the ECCU non-banking financial sector (December 2023); and ; A recommendation report on the preparation for implementing the next phase to develop the required framework and toolkit, to enable national regulators to assess, monitor, and supervise climate related risks facing NBFIs (January 2024). Phase III will focus on conducting due diligence to inform the development of the stress testing and regulatory framework.

I ntegrating C limate -R elated F inancial R isks in F inancial S upervision The ECCB built on its thrust to address climate- related financial and environmental risks in the ECCU, towards building resilience in both systems and operations in the region via the the Adapt’Action Facility for Integrating Climate- related Financial Risks in the Eastern Caribbean. The Bank, with the financial support of Agence Française de Développement (AFD), engaged the services of a consulting firm to provide technical assistance to the national and regional regulators. The goal was to develop a supervisory framework for managing climate- related risks for the regional financial sector, especially the non-banks. Phase II of the project was completed in October 2021 and involved raising awareness of the regulators, providing training, and developing a roadmap towards full integration of climate related risks into financial supervision. The final leg of this phase of the project included Signing of Memorandum of Understanding with the Agence Française de Développement - 10 November 2023. L-R: Senior Investment Officer, AFD - Lionel Lecrinier; Governor, ECCB - Timothy N. J. Antoine

The three to five-year implementation roadmap will commence in 2024/25.

Additionally, in December 2023, the ECCB issued a prudential standard on climate-related and environmental risks, which came into effect in March 2024. The standard seeks to ensure that LFIs are better prepared to address risks related to climate change.

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