“Thanks be to God for his indescribable gift”

 (2 Corinthians 9:15, NIV)

My dear ECCB family,

Greetings to you in this yuletide season – a unique celebration of faith, family, love and hope.

As we reflect on the year soon ending, we acknowledge the many challenges facing our Currency Union. These include:  climate change and a paucity of resources for adaptation and building resilience, new OECD demands, rising oil prices and BREXIT.

That said, there remains much for which we ought to be thankful.

We are thankful that our beautiful isles were spared this past hurricane season. 

We are thankful for the opportunity to serve the people of the ECCU.

And we are thankful for all our partnerships and your prayers.

Indeed, the year 2018 has been a relatively good one for the Eastern Caribbean Currency Union.

Following the growth setback last year, the ECCU recovered and is projected to grow by about 3 per cent.  Furthermore, there has been a reduction in unemployment in some member countries.

The ECCB continues to make significant strides with the implementation of our strategic plan. Amid all of our hard work to preserve monetary and financial stability and promote growth and development, there were several memorable moments including:

• The celebration of our 35^th anniversary;
• Our global award by GlobalMarkets;
• Our hosting of the Intra Regional Central Bank Games;
• Our basketball team that emerged as champions of the St Kitts Amateur Basketball Association A-Division league
• Our Christmas Lighting of the ECCB Campus.

Christmas is indeed, the most wonderful time of the year.

As we look ahead to 2019, an exciting year beckons as several of our strategic initiatives are set to come to fruition including the Credit Bureau, the Partial Credit Guarantee Scheme, the rollout of our FinTech pilot and our new bank notes.  We look forward to these and more with great anticipation.

So, from my family and me, to you:

Monetary Council, Board, management and staff, retirees, local, regional and international partners and the citizens of the ECCU:

Merry Christmas!

May 2019 bring greater peace and prosperity for you.

Click here to view video.

18 December 2018, Basseterre, St Kitts and Nevis – The Monetary Council of the Eastern Caribbean Central Bank (ECCB) is encouraging citizens and residents of the Eastern Caribbean Currency Union (ECCU) to remain calm and exercise patience as the ECCB reviews the application from Republic Financial Holdings to acquire Scotiabank’s business in the ECCU.

The ECCB received an application on Tuesday, 27 November, from Republic Financial Holdings (RFHL) seeking regulatory approval to acquire the Bank of Nova Scotia’s operations and businesses in the Eastern Caribbean Currency Union (ECCU).

The Monetary Council met on 7 December via videoconference to discuss the most recent development in the ECCU banking sector – the planned withdrawal of Scotiabank.          

In addition to an earlier written briefing, the Governor of the ECCB, Timothy N. J. Antoine, updated the Council on the process since receipt of the Republic’s application.  Already, the ECCB has prepared and submitted a detailed list of information requirements to RFHL to facilitate the review.

ECCU Countries Will Await the Findings and Recommendation of the ECCB 

The Monetary Council noted that pursuant to Section 43 of the Banking Act, the approval of the ECCB is required for the transfer of operations from Scotiabank to Republic.  The ECCB, as regulator, will undertake a thorough review after which it will determine whether to approve the transfer. 

The Monetary Council will now await the outcome of the ECCB’s review process, which may take several months, and will involve engagement with other regulators.

During this process, the Council encourages the public to be calm and patient.

Click here to view the current ECCB Monetary Council members. 

Local Ownership of Banks Encouraged

The Council agreed that it was highly desirable to have more local ownership of banks, provided these banks have strong capital, strong management and good corporate governance.  To that end, more functional cooperation and consolidation among national banks is essential if they are to effectively compete with regional and international banks, grow their market share, and help propel the development of the ECCU.

The High Backing of the EC Currency Will Continue

The ECCB is clear and resolute about its mandate to protect the EC dollar.  The Council received assurances from the Governor that the Bank will continue to maintain high levels of reserves as it has done for the past 35 years, whether or not the proposed transaction is approved.  At present, the backing of the EC dollar in foreign reserves is 98 per cent.

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About the Eastern Caribbean Central Bank

The Eastern Caribbean Central Bank (ECCB) was established in October 1983. The ECCB is the Monetary Authority for: Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines.

Media Contact: Ingrid O’Loughlin, Senior Director, Corporate Relations Department

Phone: (869) 465-2537 | Fax: (869) 465-9562

E-mail: info@eccb-centralbank.org | Website: www.eccb-centralbank.org

1 December 2018, Basseterre, St Kitts and Nevis - The Eastern Caribbean Central Bank (ECCB) hereby confirms that it has received an application from Republic Financial Holdings seeking regulatory approval to acquire the Bank of Nova Scotia’s operations and businesses in the Eastern Caribbean Currency Union (ECCU). This application was received on Tuesday, 27 November.

Pursuant to the Banking Act, the ECCB has commenced its review of this application.  In this regard, the ECCB has held initial discussions with the Central Bank of Trinidad and Tobago and the Bank of Guyana.  These regulators will collaborate on the review of this application.  The ECCB will also confer with the Central Bank of St Maarten and Curacao.

It should be noted that the ECCB already regulates Republic Bank since it has an operation in Grenada.  Republic also has a stake in a bank in Saint Lucia.

It has come to the attention of the ECCB that there is some speculation that Republic’s acquisition of Scotiabank’s operations in the ECCU could lead to the depletion of the foreign reserves that back the
EC dollar.  Such speculation is unfounded and unhelpful. 

The ECCB is clear and resolute about its mandate to protect the EC dollar and wishes to make it abundantly clear that it will continue to maintain very high levels of foreign reserves as it has done for the past 35 years.

The proposed acquisition has prompted discussion about the ownership of banking assets in the ECCU. At present, 55 per cent of banking assets are owned by three Canadian banks and Republic Financial Holdings and 45 per cent of banking assets are owned by indigenous (national) banks.  The proposed acquisition, if approved, would not fundamentally change that ownership distribution, as 55 per cent of the banking assets would be owned by two Canadian banks and Republic Financial Holdings and 45 per cent of the banking assets would continue to be owned by our indigenous (national) banks.

From time to time, there will be changes in ownership of banks.  Indeed, the proposed transaction is the latest in a series of consolidation moves by the Canadian banks.  It is distinctly possible that there could also be some consolidation moves among indigenous (national) banks.  Citizens and residents in the ECCU should come to expect these developments as part of the banks’ response to both global developments and competition in the ECCU banking space.  Indeed, the ECCB continues to encourage indigenous (national) banks to cooperate and consolidate to ensure the interests of the people of the ECCU are best served.  In this regard, we refer the public to our Consultative Paper on Consolidation of National Banking Sector in the ECCU published in July of this year.

Citizens of and residents in the ECCU are encouraged to remain calm and stay abreast of developments in the banking sector.

About the Eastern Caribbean Central Bank

The Eastern Caribbean Central Bank (ECCB) was established in October 1983. The ECCB is the Monetary Authority for: Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis,
Saint Lucia and St Vincent and the Grenadines.

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 Media Contact: Ingrid O’Loughlin, Senior Director, Corporate Relations Department

Phone: (869) 465-2537 | Fax: (869) 465-9562

The Eastern Caribbean Central Bank (ECCB) invites submissions of expression of interest from qualified persons to fill the role of Blockchain Technical Adviser to support its piloting of a digital EC currency (DXCD).

The pilot project, scheduled to commence at the end of January 2019, is a research initiative and will cover a period of approximately 16-18 months. It will provide a safe space in a controlled live environment to issue DXCD and facilitate an informed understanding of its impact on several constructs including:

1. The ECCU monetary and financial systems;
2. Circulation of EC currency;
3. Financial intermediation in a digital environment; and
4. Know Your Customer (KYC) and Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) regulatory compliance.

Click here for more information.

Communiqué of the 92^nd Meeting of the Monetary Council of the Eastern Caribbean Central Bank

The Ninety-Second Meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB) was held via videoconference at the ECCB Headquarters, Basseterre,
St Kitts and Nevis, on 16 November 2018, under the chairmanship of Dr The Right Honourable Keith Mitchell.

1.0  Monetary Stability

Council received the Governor’s Report on Monetary and Credit Conditions in the Eastern Caribbean Currency Union (ECCU).  The report outlined the recent trends in monetary and credit conditions as at 30 June 2018, against the backdrop of global economic and financial developments and within the context of the Bank’s broader objectives of ensuring the stability of the exchange rate and the financial system.

Council was apprised of the following:

• Monetary and Credit conditions in the ECCU banking system showed a slight deterioration as at the end of June 2018 when compared with the same period in the previous year, but remained favourable.
• The Currency Union’s exchange rate arrangement continued to be well supported by an adequate level of foreign currency reserves.
• The backing ratio stood at 97.5 per cent, which was notably above the operational (80 per cent) and statutory (60.0 per cent) limits.
• Private sector credit from banks rose by 0.4 per cent ($40.4m) mainly on account of 9 per cent ($32.4m) increase in credit to private businesses.
• Global growth projections have been revised slightly downward to 7 per cent for both 2018 and 2019 compared with 3.9 per cent in the IMF’s World Economic Outlook April 2018 projections.
• US growth is expected to remain robust at 2.9 per cent in 2018, supported by the recent fiscal stimulus. However, the forecast is for slower growth in 2019 as the stimulus of the tax cuts fades.

• Downside risks had strengthened in recent months including:
  1. Escalating global trade tensions;
  2. Tightening of financial conditions particularly in emerging markets;
  3. Rising oil prices; and 
  4. Climate Change.

Following deliberations on the state of monetary and credit conditions, Council agreed to maintain the Minimum Savings Deposit Rate at 2.0 per cent and the Central Bank’s discount rate at 6.5 per cent. The Minimum Savings Rate is the lowest rate that commercial banks can offer on savings deposits.  The Central Bank’s Discount Rate is the rate at which the ECCB lends to commercial banks and governments.

2.0  Financial Stability

Council was informed that as at 30 June 2018, the ECCU commercial banking sector was assessed as stable when compared to the previous quarter’s performance.  Council noted that:

• Total assets decreased by 0.26 per cent ($80.4m) to $30,701.4m;
• Deposits decreased by 0.22 per cent ($46.6m) to $21,530.8m; and
• Loans and advances recorded a nominal increase of 0.12 per cent ($14.3m) to $12,223.0m.

With respect to the Credit Bureau, Council was informed that the Credit Reporting Legislation had been already passed in four member countries: Antigua and Barbuda, Grenada, St Kitts and Nevis and St Vincent and the Grenadines.

Furthermore, an operator for the credit bureau has been selected and should be licensed by year end.  The Credit Bureau for the ECCU is expected to become operational in the second half of 2019.

Council received a paper on the establishment of Deposit Insurance Fund in the ECCU to further protect depositors.

3.0  Fiscal and Debt Sustainability

Council also noted that the ECCU Debt to GDP ratio continued its downward path to the target of 60 per cent and currently stands at 69.5 per cent.

4.0  Growth and Competitiveness

As it relates to growth, Council noted that ECCU growth was projected to accelerate to 2.9 per cent in 2018 and 3.8 per cent in 2019 after the growth setback caused by the devastating hurricanes in 2017.

With respect to the challenges experienced by St Vincent and the Grenadines pertaining to the payment to traders selling agricultural produce in Trinidad and Tobago, Council welcomed the solution reached between the ECCB and the Central Bank of Trinidad and Tobago (CBTT).  The solution will facilitate trade of agricultural produce from St. Vincent and the Grenadines to Trinidad by making it easier for certified traders in St Vincent and the Grenadines to exchange TT dollars for EC dollars.  Council noted that the ECCB and the CBTT had agreed to pilot the solution using the Bank of St Vincent and the Grenadines Limited as the intermediary.

Council discussed ways to strengthen statistics in the ECCU including the modernisation of Statistical Acts; increased use of ICT in statistics; and development of Tourism Satellite Accounts

5.0  Report from the Technical Core Committee on Insurance (BAICO and CLICO)

Council was apprised that distribution to creditors under the Plan of Arrangement and the Annuity Relief Program continued. A second distribution of approximately EC$35M is being planned to be paid by end of 2018.

6.0  Date and Venue of 93^rd Meeting of the Monetary Council

Council agreed to the convening of the 93^rd Meeting of the Monetary Council on Friday, 15 February 2019 in St Kitts and Nevis.

7.0  Attendance

Council Members who attended the meeting were:

1. Dr The Right Hon Keith Mitchell, Prime Minister and Minister for Finance, Grenada (Chairman)
2. The Hon Victor F Banks, Chief Minister and Minister for Finance, Anguilla;
3. The Hon Roosevelt Skerrit, Prime Minister and Minister for Finance, Commonwealth of Dominica;
4. The Hon Donaldson Romeo, Premier and Minister for Finance, Montserrat;
5. Dr the Hon Timothy Harris, Prime Minister and Minister for Finance, St Kitts and Nevis;
6. Hon Allen Chastanet, Prime Minister and Minister for Finance, Saint Lucia;
7. The Hon Camillo Gonsalves, Minister for Finance, St Vincent and the Grenadines; and
8. The Hon Lennox Weston, Temporary Alternate, Antigua and Barbuda.

16 November 2018