Eastern Caribbean Central Bank 2024-2025 Annual Report

EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2024 - 2025

Financial Stability

system; support the resolution of institutions in the ECCU; promote responsible financial conduct; enhance financial literacy; and improve access to financial services. The ECCB also continued its macro-prudential surveillance with valued input from the National Regulatory Authorities. These key partners have enabled a more comprehensive assessment of key sectors, such as credit unions and insurance companies. Enhanced Risk-Based Supervisory and Management Framework Anti-Money Laundering and Combatting the Financing of Terrorism and Proliferation (AML/CFT/CPF) The key objectives for AML/CFT/CPF supervision were: 1. enhancing the regulatory framework to combat money laundering, terrorist financing and proliferation financing (ML/ TF/PF) in the ECCU; monitoring, assessing and addressing ML/TF/PF risks of Licensed Financial Institutions (LFIs); 2. enhancing training systems within the banking sector to improve capacity; 3. improving compliance within LFIs to combat financial crime; and 4. improving institutional capacity within the ECCB and national regulators to support compliance efforts and reduce risks in member countries.

and the ECCB’s examination cycle. Notably, LFIs have made significant strides in lowering their ML/TF/PF risks by addressing deficiencies and improving their AML/CFT/CPF compliance programmes. Enhanced Prudential Supervision of Licensed Financial Institutions The ECCB’s risk-based supervision framework underpinned the on-site and off-site surveillance activities for LFIs. The ECCB conducted eight prudential examinations and four information technology examinations utilising either a full on site, full remote, or hybrid approach. Emphasis was placedonassessingcredit, liquidity, and information technology risks; threats to earnings sustainability; capital adequacy; corporate governance; risk management; and compliance with requirements of the Banking Act, 2015, as amended (the Act), the ECCB’s Standards and Guidelines, and other relevant legislation and supervisory requirements. In the pursuit to strengthen oversight of the licensed non-bank financial institutions (NBFIs), on 1 October 2024, the ECCB introduced a new suite of prudential returns for NBFIs, which aligned with that of commercial banks. Enhancements were made to the supervisory framework for the Eastern Caribbean Partial Credit Guarantee Corporation, and the Credit Bureau Supervisory framework is being finalised. The Bank made further amendments to the Prudential Standard for the Treatment of Impaired Assets for Institutions Licensed under the Banking Act, 2015, in relation to the classification of facilities,

The risk-based examinations, in keeping with the LFIs’ risk profiles ECCB conducted eight

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