ECCB 2015/2016 Annual Report

EASTERN CARIBBEAN CENTRAL BANK

Eastern Caribbean Central Bank Notes to Financial Statements March 31, 2016 (expressed in Eastern Caribbean dollars) Financial risk management … continued

NOTES TO FINANCIAL STATEMENTS

(expressed in Eastern Caribbean dollars)

March 31, 2016

3.

3. Financial risk management … continued f) Fair value …continued Fair Value Hierarchy …continued The following table presents the Bank’s financial assets and liabilities that are mea sured at fair value at March 31, 2015: Level 1 Level 3 $ $ Financial assets Commercial paper 251,793,179 – Financial assets held for trading 4,495,651 – Available-for-sale – foreign investment securities 2,539,942,707 – Available-for-sale – domestic investment securities – 421,686 2,796,231,537 421,686 f) Fair value … continued Fair Value Hierarchy … continued The following table presents the Bank’s financial assets and liabilities that are measured at fair value at March 31, 2015:

Level 1

Level 3

$

$

Financial liabilities Financial liabilities held for trading

-

1,566,227

g) Capital risk management The Bank’s objectives when managing capital are: g) Capital risk anagement

The Bank’s objectives when managing capital are:

 Safeguard the Bank’s ability to continue as a going concern  Manage and safeguard the value of the Eastern Caribbean currency  Maintain a strong capital base to support its developmental activities

— — Safeguard the Bank’s ability to continue as a going concern — — Manage and safeguard the value of the Eastern Caribbean currency — — Maintain a strong capital base to support its developmental activities

The Bank manages capital through the maintenance of a general reserve according to prescribed guidelines as mandated in the ECCB Agreement Act 1983 (note 2t). As at March 31, 2016 the general reserve was $104,867,765 (2015: $114,891,311). The Bank manages capital through the maintenance of a general reserve according to prescribed guidelines as mandated in the ECCB Agreement Act 1983 (note 2t). As at March 31, 2016 the general reserve was $104,867,765 (2015: $114,891,311). h) Operational risk Operational risk is the risk of direct or indirect loss in both financial and non-financial terms arising from a wide variety of causes associated with the Bank’s processes, personnel, technology and infrastructure. It may also arise from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the Bank’s operations and are faced by all departments. h) Ope ational risk Operational risk is the risk of direct or indirect loss in both financial and non-financial terms arising from a wide variety of causes associated with the Bank’s processes, personnel, technology and infrastructure. It may also arise from external factors other than credit, market and liquidity risks such as those arising from legal and regulatory requirements and generally accepted standards of corporate behaviour. Operational risks arise from all of the Bank’s operations and are faced by all departments.

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ECCB A nnual R eport 2015/2016

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