The Strategic Plan of the Eastern Caribbean Central Bank 2021 – 2026 provides a comprehensive path for the work of the Bank and its guidance and advice to the member countries of the Eastern Caribbean Currency Union (ECCU). In addition to influential policy advice to member countries, the ECCB also has a mandate for financial sector and exchange rate stability as per Article IV of the ECCB Agreement, 1983.
The thrust towards maintenance of financial sector stability is primarily focused on the robust supervision of Licenced Financial Institutions (LFIs) and the implementation of a regulatory framework to support these efforts. Recently, the ECCB initiated the development of an Optimal Regulatory Framework for Financial Sector Stability which also includes a Macroprudential Framework that aims to reduce systemic risks to financial sector stability. Additionally, efforts at bolstering microprudential regulation and supervision have been concentrated on the development and implementation of a Basel II/III framework and working with member countries to enact Amendments to the Banking Act (2015) and the Harmonised Credit Reporting Bill.
Financial sector stability is also based on the ability of financial institutions to issue and receive payments safely, efficiently and effectively. In recognition of this, the ECCB launched a programme of reforms aimed at strengthening and modernizing the payments system. Key reforms include, the reconstituted Eastern Caribbean Payments Council which acts as an advisory and consultative body on matters related to the payments system. The implementation of the ECCB Digital Cash (DCash) pilot project also aims at improving the efficiency of payments and promote financial inclusion across the currency union. DCash will be launched in April 2021. Other reforms include legislative reforms aimed at enhancing consumer and data protection.
As the ECCU member countries continue to enhance their resilience, the digital economy and its key dimensions require additional effort and development. The COVID-19 pandemic and the global shift towards digital platforms revealed the potential of firms and governments to provide services through digital means. The pandemic has also provided an opportunity for member countries to enhance efforts in this area by improving their digitized revenue collection services, digitizing land registries and exploring approaches to the implementation of single ID systems.
Governance and organisational effectiveness remain important elements required to support efforts aimed at enhancing resilience and development. Within the ECCB, work continues on the development and implementation of a Corporate Governance Framework established within the broad governing framework of the ECCB Agreement. This includes a review of standards developed and established by institutions such as the International Monetary Fund and the Financial Stability Board with a view to strengthening in house initiatives at the ECCB. Finally, the ECCB maintains its commitment to organizational development by improving operational performance and by expanding training and capacity within the institution.
The proposed 2021/2023 Research Agenda is designed to guide the research output of the Eastern Caribbean Central Bank (ECCB). Accordingly, this research has been aligned to the mission of the ECCB, and most importantly, the Strategic Goals, as outlined by the Strategic Plan, 2021 - 2026. To attain the research and policy objectives outlined in this agenda, the Research Department proposes that;
The 2021/2023 Research Agenda is divided into five themes each with their relevant motivation and proposed research objectives. The Agenda is by no means exhaustive, and is meant to focus the research process on areas of priority to the Bank. The research objectives remain intentionally broad to offer flexibility to the researcher and encourage innovation. Of note are other key items of importance including Fiscal Policy, which though not placed expressly within the Agenda, will continue to have a prominent place in the ECCU.
Financial sector stability is and remains a key aspect of the ECCB’s mandate in regulating the financial sector. The ECCB has continued to implement and develop new regulatory measures that are expected to enhance financial sector resilience and encourage stability. The ECCB, therefore, in the exercise of its financial sector stability mandate seeks to promote an environment whereby the key financial markets and financial institutions’ system are resistant to economic shocks and in so doing the key functions of financial intermediation, risk management and the arrangement of payments without significant interruption.
The goal of the ECCB is to improve the systems and mechanisms used to clear and settle monetary and other financial transactions while creating accessibility to affordable financial products and services that meet the needs of individuals and corporations in a responsible and sustainable way. The ECCB has sole responsibility for the payment and settlements systems in the ECCU. The Central Bank therefore seeks to create a system which is safe, efficient, and supports innovation. Additionally, the modernisation of the payment and settlement system is meant to; reduce settlement cycles and transaction costs, enhance efficiency and intraregional banking and economic activity . Congruent to the modernisation of the payments system, the ECCB has launched the development of a Central Bank Digital Currency (CBDC), making it one of the leaders in this space.
Digital technologies are reshaping the global environment. As this change occurs, firms continually seek the integration of these benefits into their own processes. The ECCU and the ECCB are no different, and consequently, there is a need to advance the integration of technology into all areas of business, changing the operations and creating value for clients and stakeholders.
The ESG framework for the ECCB considers the decisions and operations of the Bank in light of the impact on the environment as well as the society in which it functions. Additionally, the ethical framework governing the decision-making process within the ECCB is also considered. The ECCB will, therefore, continue to work on establishing a framework for assessing the impact of the sustainability and ethical practices of the Bank on its financial performance, operations and influence.
Organizational effectiveness and development in the ECCB speaks primarily to the development of an approach for performance enhancement within the ECCB. This approach will consider institutional strategies including communication, structure and efficiency. Additionally, the enhancement of its employees with an added focus on team performance and employee development.
Additionally, the work streams outlined capture the ongoing and proposed work of the ECCB over the research horizon with a view to providing thoughtful and influential policy advice to the ECCB member countries. Achieving these objectives requires the involvement of both external and internal stakeholders.