Eastern Caribbean Central Bank 2024-2025 Annual Report

EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2024 - 2025

Organisational Effectiveness and Development

The Bank utilises the Three-Lines Model to set the roles and responsibilities related to managing risks: ; The first line (business units/departments) establishes and maintains appropriate processes for the management of operations and risk and internal control. It ensures compliance with legal, regulatory and ethical expectations; ; Operating from an independent position, the second line (risk and compliance function) provides complementary expertise, support, monitoring and challenge related to the management of risk; and ; Thethirdline(internalauditfunction)provides independent and objective assurance and advice to (senior) management on the adequacy and effectiveness of governance and risk management (including internal controls). During the year, the Bank completed several major riskmanagement activities under the supervision of the Management Risk Committee. These included development of its Key Risk Indicators (KRIs). The Bank will implement and monitor the KRIs during the financial year 2025/2026, and thereafter the KRIs will form part of the evaluation of risk management practices at the Bank. The Bank also launched its Operational Risk Incident Reporting Framework, which is geared at increasing the number of risks and near-miss events reported to the 2 nd line for investigation. These risks could have a negative financial, business or reputational impact on the Bank and therefore reporting allows for the implementation of mitigation actions.

(RMM) to test the quality and integration of the Bank’s ERM practices and to determine the results effectiveness of its risk- decision-making process and framework. The RMM is based on five maturity levels: immature, developing, established, advanced and mature. These levels are assessed against six key competency drivers: ERM framework and policy; governance and organisational structure; process and integration; systems and tools; risk capabilities; and risk culture.The maturity level scores are then averaged to determine the overall maturity level score. The overall Risk Maturity Level score for the ECCB was determined to be 3.40. This suggests that the ECCB’s ERM Maturity is established (see Table II). The Bank continued the implementation of the IT Recovery Strategy as part of its BCMS Policy implementation. TheBankhas instituted thevarious components of the ISO 22361 crisis management standard into its Crisis Management Plan. The Board approved the ECCB Crisis Management Plan in September 2024 and it includes the composition of the Bank’s Crisis Management Team. The Crisis Management Plan sets out the policy and procedural elements of the workings of the Crisis Management Team as well as generic responses, tools and templates. The Crisis Management team has assigned roles and responsibilities inclusive of leadership. During the 2025/2026 financial year, the Bank will finalise its BCMS Strategy, build awareness of the plan across the Bank and provide training for the persons with key roles and responsibilities. Business Continuity Management System (BCMS)

The ECCB developed a Risk Maturity Model

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