Proposed Prudential Guidelines
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
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.