Eastern Caribbean Central Bank 2024-2025 Annual Report

EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2024 - 2025

Financial Stability

Integrating Climate-Related Financial Risks in the Eastern Caribbean The Bank held a series of climate-related risks capacity building sessions inMay 2024, to continue building capacity in the financial sector throughout the ECCU region. Accordingly, efforts continued towards integrating climate-related financial risks into the ECCB’sRisk-BasedSupervision Framework. Phase two of the Adapt'Action Facility for Integrating Climate-Related Financial Risks in the Eastern Caribbean was completed successfully in May 2024. Phase two involved conducting a diagnostic of climate-related financial risks in the ECCU; conducting due diligence to inform the development of the stress testing and regulatory framework; and building awareness and conducting training and peer learning. The following deliverables were finalised and submitted by the project consultants, A2F Consulting: ; An assessment of climate-related financial risks in the ECCU non-banking financial system; ; A guidance report on strengthening the supervision of climate-related financial risks in the ECCU non-banking financial sector; and ; A recommendation report on the preparation for implementing the next phase to develop the required framework and toolkit, which will enable national regulators to assess, monitor and supervise climate-related risks facing NBFIs.

Prudential Standards Basel-Related Standards: The Bank continued to strengthen the resilience and robustness of the ECCU banking sector by issuing the Prudential Standard for the Management of Interest Rate Risk in the Banking Book , effective 1 April 2025. Efforts are ongoing to replace the Liquidity Risk Management Guidelines with the Prudential Standard for the Management of Liquidity Risk . The ECCB continues to assess the feasibility of implementing the liquidity buffers of Basel III, namely the Liquidity Coverage Ratio and/or the Net Stable Funding Ratio. The issuance of the Fit and Proper Standard and the Prudential Standard on Corporate Governance remains contingent on the passage of the Banking Act, 2015 amendments in all member countries. Simplified Customer Due Diligence Standard/ Guidelines: The Standard/Guidelines were issued to LFIs in member countries where the ECCB is the named AML/CFT/CFP regulator for LFIs and took effect on 1 April 2025. The Standard/Guidelines aim to ensure that LFIs implement simplified customer due diligence procedures, for opening a bank account, where low-risk factors are identified. The Standard/Guidelines are intended to streamline the process for institutions, while ensuring adequate risk mitigation in line with the overall regulatory framework. The Standard/Guidelines for the relevant member countries are available on the Bank’s website. Access the Prudential Standard for the Management of Interest Rate Risk in the Banking Book. Access Simplified Customer Due Diligence Standard/ Guidelines for the respective ECCB member countries.

A communication strategy for the climate risk project was also developed.

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