From Caribbean360

BASSETERRE, St. Kitts, Thursday November 6, 2014, CMC – The Monetary Council of the Eastern Caribbean Central Bank (ECCB) says action needs to be taken to address commercial bank charges in the Organisation of Eastern Caribbean States (OECS).

A communiqué issued at the end of the 80th meeting of the Council held here over the last weekend, noted that it had “expressed concern with regard to commercial bank charges” and agreed “that a concerted approach to the restructuring of the banking sector was critical”.

The Council, which comprises finance ministers from the nine-member sub-regional grouping, gave no indication as to the commercial bank charges, but added “Council addressed the issue of the importance of the private sector in spearheading the growth agenda and the need for defining the appropriate public and private sector collaboration which was needed in the new growth thrust”.

The meeting here was chaired by St. Vincent and the Grenadines Prime Minister Dr. Ralph Gonsalves, and the communiqué noted that member governments’ fiscal and debt positions were estimated to have improved for the year to September 2014 with declines in the primary and overall deficits of EC$71.8 million (One EC dollar =US$0.37 cents) and EC$17.8 million respectively.

It also noted that there had been an improvement in the reserve position of the ECCB during the 12 months to September 2014 contributing to an improvement in money and credit conditions in the ECCU.

“The near term outlook and prospects indicated that external factors, including the performance of ECCU major trading partners, were expected to improve in the near term and that was expected to provide support for an easing in money and credit conditions which would in turn contribute to an expansion in economic activity.”

The Council also discussed the economic conditions in the ECCU member countries, namely Antigua and Barbuda, Dominica, Grenada, St. Lucia, St. Vincent and the Grenadines, St. Kitts-Nevis, Montserrat, Anguilla and the British Virgin Islands.

The communiqué said that the Council agreed to maintain the minimum savings deposit rate at three per cent and the Central Bank’s discount rate at 6.5 per cent.

“Council further agreed that the creation of a single financial space within the Currency Union is a matter of great urgency to stabilise and consolidate the banking sector,” the communiqué stated, noting that the ministers also “reaffirmed that the regulation and supervision of the financial sector as a whole must be undertaken on a regional basis…”.

The meeting also agreed that the several pieces of legislation, including amendments to the ECCB Agreement and the Banking Act; legislation establishing the Asset Management Corporation and regional legislation on foreclosure, were urgently required to provide the central bank with the tools to execute the successful stabilisation of the banking sector.

The ministers agreed in order to expedite this legislative process, a working session of the ECCU Financial Secretaries, Attorneys General, the International Financial Institutions and the ECCB will take place in St. Lucia during the period November 24-28.

“Council underscored the need to synchronise the financial programmes of member countries, deepen the fiscal reform initiative and tighten the coordination of fiscal policy in support of the restructuring of the banking sector.

“Council agreed to further refine and coordinate a regional and national debt strategy to support the restructuring of the banking sector,” the communiqué added.

It said that the meeting also received an update from the Chairman of the Ministerial Subcommittee on Insurance in respect of the British American Insurance Company (BAICO) and Colonial Life Insurance Company (CLICO) situation.

The meeting noted that major efforts were continuing to secure additional funding to complete Phase Three of the ECCU Policyholders Relief Programme and proceed to an additional phase for policyholders over EC$30,000and that an alternative resolution strategy for the CLICO International Life Insurance Limited (CIL) is being pursued with Barbados.

“Council also agreed to expedite and complete work on the new Insurance Law for the ECCU and continue preparatory work for the establishment of the Eastern Caribbean Financial Services Regulatory Commission.”

The communiqué said that in this regard, a steering committee comprising regulators, industry representatives, an Attorney General and a member from the Core Committee on Insurance will be asked to coordinate the work and prepare a report for Council in the shortest possible time.

IMAGE: ECCB_st-_kitts__nevis_000010437

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