Proposed Prudential Guidelines
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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.
EXTERNAL AUDITING
GUIDELINES
These guidelines seek
to provide financial institutions licensed under the Banking
Act with minimum requirements in determining external auditors’
suitability for appointment. They highlight key expectations
which management should have of external auditors in the conduct
of the audit based on international best practices.
These guidelines also seek to increase financial institutions’
awareness of the external auditors’ reporting obligations
to the Central Bank regarding transactions or conditions that
impinge on the well-being of the financial institution.
INTERNAL AUDITING
GUIDELINES
These guidelines seek
to provide a framework for the performance and promotion of
a broad range of internal audit activities within financial
institutions licensed under the Banking Act. Further, they
aim to show how the work of the internal audit department/unit
could be used to inform improvements in organisational processes
and operations.
They establish the basis for measuring performance in the
internal audit function and ensuring that the institution’s
internal audit activities confirm to international best practices.
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Proposed Prudential Guidelines