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Financial Institutions
The Financial System in the ECCU
The Finanical System in the ECCU
Structure of the system
Clearing Banks
Licensed Finance Companies
International Financial Services Sector Regulators
Registrars/Commissioners of Cooperatives
Insurance Sector Supervisors/National Regulators
Proposed Prudential Guidelines
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The financial system in the Eastern Caribbean Currency Union (ECCU) comprises domestic banks, International Financial Services Sector banks, credit unions, insurance companies, national development foundations, development finance institutions, building and loan associations and finance companies.

The regulatory framework of the domestic banking system has two main legislative components. First, there is the ECCB Agreement Act, 1983 and its amendments, which under Article 3 paragraph 2(e) of the ECCB Agreement Act gives the Eastern Caribbean Central Bank the power to “regulate banking business on behalf of and in collaboration with Participating Governments.” Second, there are the Banking Acts of the various territories of the Participating Governments which govern the regulation of banking business in those territories.

Over the period 1988 to 1992, new banking legislation was enacted in each of the member states. These Acts, collectively referred to as the Uniform Banking Act, were uniform across the currency area, and their adoption facilitated the harmonisation of banking business within the ECCB area. Over the period 2004 to 2006, the Banking Acts in the territories of the Participating Governments were revised and upgraded in relation to the Basle core principles. This harmonised banking legislation has strengthened the legal framework for the conduct of banking business and enhanced the regulatory environment.

The harmonised Banking Acts recognise the ECCB as the ECCU’s Central Bank, with primary responsibility for the supervision of domestic banks. The ultimate authority for regulating institutions covered by this Act is jointly vested in the Minister of Finance and the ECCB. The Minister of Finance is normally required to act in consultation with, and on the recommendation of the ECCB with respect to those areas where the Minister of Finance has ultimate responsibility.

All commercial banks and other institutions deemed to be carrying on banking business are required to be licensed under the Banking Act and are regulated by the ECCB. As part of the ongoing supervision, licensed financial institutions are required to submit monthly, quarterly and annual returns to the ECCB. These returns provide essential information to assess the performance of the institutions and the financial system, and to inform policy decisions. In addition, periodic visits are made to the institutions to verify the information submitted.

The international financial services sector is governed by the Offshore Banking Acts in the respective countries and is primarily the responsibility of the national regulators.

The ECCB provides support and actively monitors developments, primarily in the credit unions and insurance sectors. These sectors are supervised by the relevant government authorities, however there is an ongoing initiative to establish single regulatory units within the territories of the Participating Governments to regulate all financial institutions.

Overall, the regulation and supervision of the financial sector in the ECCU is being enhanced with the ultimate objective being the establishment of harmonised laws that are consistent with international best practices and a regulatory and supervisory unit for financial services in each member state.

Locally incorporated banks
Banks that are incorporated within the Eastern Caribbean Currency Union (ECCU) and may be either locally owned or a foreign-owned subsidiary.  top ^

Foreign incorporated
Banks that are incorporated outside the ECCU and are established as branches within the ECCU. These banks generally do not hold capital on the books. Capital is assigned annually by their head offices, based on their level of deposits.  top ^

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