Financial Institutions Proposed Prudential Guidelines The Finanical System in the ECCU Structure of the system Clearing Banks Licensed Finance Companies Offshore Regulators Registrars/Commissioners of Cooperatives Insurance Sector Supervisors/National Regulators Proposed Prudential Guidelines Enforced Prudential Guidelines Abandoned Property Holders

The Eastern Caribbean Central Bank is in the process of reviewing and evaluating its statutory and prudential authority to effectively regulate the banking sector in the ECCU. This introspection was prompted by the findings of the 2003 Financial Sector Assessment Programme and internally identified gaps in the regulation of the financial system.

The assessment revealed that the ECCB’s current regulatory structure could benefit from enhanced statutory and prudential authority. The proposed amendments to the Banking Act are expected to enhance the Bank’s legal authority. The Central Bank is also proposing a series of regulations and prudential guidelines to complement the proposed Banking Act.

These regulations and guidelines would be issued on the authority of the relevant Minister of Finance and the ECCB’s Board of Directors respectively. The prudential guidelines will be issued by the Eastern Caribbean Central Bank (ECCB) pursuant to the authority contained in section 36 of the new Banking Act.

BANKING (CAPITAL ADEQUACY AND CAPITAL RATIOS) REGULATION
This regulation provides minimum capital adequacy standards and requirements for licensed financial institutions.

The purpose of this regulation is to ensure that licensed financial institutions have an adequate cushion to absorb current and potential (expected and unanticipated) losses; protect the interests of depositors, creditors, and the public in general; and ensure that licensed financial institutions maintain capital commensurate with their risk.