Suitably qualified citizens of member territories of the Eastern Caribbean Currency Union (ECCU) are invited to apply to fill the post of Senior Administrative Assistant, Eastern Caribbean Central Bank, headquartered in Basseterre, St Kitts.  The successful candidate will be on a two (2) year contractual engagement and will be based in St Kitts.  All applicants must complete the ECCB Employment application form which is available on the ECCB’s Website or at the ECCB’s Offices in the respective territories. 

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"The Monetary Council convenes at a time when the global economy is recording its best growth in seven years with projections of 3.9 per cent for both this year and next year"

Your Excellency Dame Dr Cecile La Grenade, Governor General of Grenada

Honourable Roosevelt Skerrit, Outgoing Chairman of the Monetary Council

Dr. The Rt. Honourable Keith Mitchell, Incoming Chairman of the Monetary Council

Other members of the Monetary Council

Members of Cabinet

Members of Parliament

Members of the Diplomatic and Consular Corps

Other Distinguished Guests

Rev. Dr. Osbert James

Mr. Trevor Brathwaite, Deputy Governor, ECCB

Board members and Advisers

ECCB Management and Staff

Members of the Media

Mrs. Ursula Antoine, MBE, my dear mother

Ladies and Gentlemen

Good Morning.

Introduction

We are delighted to be back in Grenada, the Isle of Spice.

It is my distinct pleasure to welcome each of you to the Handing Over Ceremony to Mark the Change in Chairmanship of the Monetary Council of the Eastern Caribbean Central Bank (ECCB).

Today, the chairmanship of the Council passes from the Honourable Roosevelt Skerrit, Prime Minister and Minister of Finance for the Commonwealth of Dominica to Dr. The Rt. Hon. Keith Mitchell, Prime Minister and Minister of Finance for Grenada.

At this juncture, we wish to record our gratitude to the Government and People of Grenada for the excellent arrangements afforded us for the conduct of the Monetary Council’s 91^st regular meeting.

Article 7(2) of the ECCB Agreement states and I quote: “the Council shall meet not less than twice each year to receive from the Governor, the Bank's report on monetary and credit conditions and to provide directives and guidelines on matters of monetary and credit policy to the Bank and for such other purposes as are prescribed under the Agreement” end of quote.

Recent Developments

It is 10 years since the onset of the Global Financial Crisis (GFC). The Monetary Council convenes at a time when the global economy is recording its best growth in seven years with projections of 3.9 per cent for both this year and next year.  That said, the global economy is pregnant with risks including climate change, spiralling debt levels, trade wars, BREXIT, rising oil prices (for oil-importing countries) and the tightening of financial conditions.  Indeed, we are witnessing the “end of easy” as major central banks normalise interest rates after the unprecedented actions taken to help reboot the global economy.

Just over a month ago, I attended the Annual Meetings of the Bank for International Settlements in Basel, Switzerland - a convocation of central banks and regulators from around the globe.  At that meeting, there was recognition of the considerable progress made in respect of post crisis reforms such as the recapitalisation of banks and the adoption of macro-prudential frameworks to deliver stronger oversight of systemically important financial institutions. Yet, there was a strong call to complete unfinished business before the onset of the next downturn or crisis. That unfinished business includes:

• Unburdening balance sheets of banks with large portfolios of non-performing loans; and
• Untangling the web that is the $600 trillion market for derivatives. You may recall that Warren Buffet once referred to derivatives as “financial weapons of mass destruction”.

I now pivot to the prospects for the Eastern Caribbean Currency Union (ECCU).Growth for this year is projected around 2.0 per cent and for next year around 3.5 per cent. Exactly three weeks ago (6 July), the ECCU celebrated 42 years of stability of the EC dollar pegged at EC$2.70=US$1.00.  This is a remarkable feat and a testimony to the resilience of our monetary union.  Today, I confirm that our EC dollar is strong.  As of last Friday (21 July), the backing ratio of our foreign reserves was 97.2 per cent.

Unfinished Business

Here in the ECCU, we too have made important progress since the GFC, having enacted a new Banking Act and resolved some troubled banks. Furthermore, the rollout of the new Risk Based Supervisory Framework for banks is imminent. 

We can also point to the progress made by some member countries including Grenada to put their fiscal houses in order and build fiscal resilience. Notwithstanding, we too have some unfinished business, which includes, inter alia:

• Establishment of a Regional Crisis Management Plan;
• Adoption of a macro-prudential framework (to ensure effective oversight of systemically important banks and non-banks);
• Enactment of a uniform insurance law and establishment of the Eastern Caribbean Financial Services Commission (to create a single space for insurance as currently obtains for banking and securities business);
• Establishment of a Credit Bureau (to support enhanced credit underwriting and equally important to open up the risk appetite of lending institutions); and
• Establishment of a Deposit Insurance Scheme (to protect our depositors).

Furthermore, aside from the Regional Government Securities Market, we are yet to optimise fully, our very modern platform of the Eastern Caribbean Securities Exchange (ECSE). For example, one in two citizens of the United States are invested in the US stock market and US households derive considerable wealth from the stock markets.  Yet, 17 years after its creation, less than one in 10 citizens in the ECCU, in my estimation, are invested in our regional stock market. Going forward, we believe that our regional stock exchange with connectivity to global capital markets ought to be a channel of wealth creation for our people.  The new strategic plan of the ECSE will propel us in that direction.

But even as we work assiduously to complete our unfinished business, we must now contend with new and emerging business. 

New and Emerging Business

At the 2018 World Economic Forum in Davos, the Canadian Prime Minister, Justin Trudeau remarked, and I quote: “the pace of change has never been this fast, yet it will never be this slow again”, end of quote.

Does anyone recall when the first Automated Teller Machine (ATM) was opened?  The year was 1967 – 51 years ago.

Today, the pace of Financial Technology (FinTech), inclusive of peer to peer lending, digital wallets, crowd funding, crypto-assets and initial coin offerings (ICOs), is breathtaking.  And with the ubiquitous smartphone has the potential to make financial inclusion a reality for all.  Lest we forget, these technologies were once mere ideas.  Yet, as William Blake, the British poet poignantly observes, “what is now proved was once only imagined”.

With Blake’s observation in mind, policymakers and regulators ought to avoid a “failure of imagination” as we craft the way forward.  Indeed, the onus is on us to ensure that the deployment of FinTech and our reduced use of cash develop in a way that maximises the opportunities and minimises the risks for our people.  That said, imagination is a necessary, but not sufficient condition for there must also be cooperation. Indeed, regional and international cooperation is not merely the preferred way but the only way to harness these opportunities while mitigating risks such as money laundering (ML) and cybersecurity.

Conclusion

In conclusion, our shared vision of transforming the ECCU, as articulated in our Strategic Plan, is fundamentally about shared prosperity for all who work and live in the ECCU.  To this end, we must take care of our business – unfinished as well as new and emerging.

As Governor, I feel that sense of urgency and opportunity.

Today, I reaffirm the commitment of the Board, management and staff of the ECCB to support our Monetary Council, as together, we transform the ECCU for the good of the people we serve.

Working together: governments, social partners, development partners and our people and by the grace of Almighty God, we shall succeed.

I thank you.

Communique of 91^st Meeting of the Monetary Council of the Eastern Caribbean Central Bank

View presentation of Communique

The Ninety-First Meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB) was held under the Chairmanship of Dr The Right Honourable Keith Mitchell on 27 July 2018, at the Radisson Grenada Beach Resort, Grand Anse, St George’s, Grenada. 

1.0         Monetary Stability

Council received the Governor’s Report on Monetary and Credit Conditions in the Eastern Caribbean Currency Union (ECCU).  The report assessed the recent trends in monetary and credit conditions for the period April 2017 to March 2018, 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:

• Global output is estimated to have risen to 3.8 per cent in 2017 and is forecast to continue rising in 2018 and 2019 to a projected 3.9 per cent.
• With strong global economic growth, it is anticipated that ECCB member countries will benefit from positive spill-overs including increased Tourism, Foreign Direct Investment and Remittances.
• Money and credit conditions continued to show a general improvement but domestic credit conditions were less than optimal. Domestic credit fell by 1.2 per cent to $9.7 billion.
• Growth in money supply increased by 4.1 per cent to $17.1 billion as at 31 March 2018.
• The Currency Union’s exchange rate arrangement continued to be supported by a strong and growing stock of foreign currency reserves.

Having considered 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 31 March 2018, the ECCU banking sector was assessed as stable. Although, generally speaking, banks are in compliance with capital requirements, there is a need to strengthen capital given the impact of non-performing loans (NPLs), growth strategies and the likely effects of Basel II/III and IFRS 9 requirements.

With respect to the banking sector, Council also noted, that as at 31 March 2018:

• Total assets increased by 3.9 per cent to $30.8 billion (156.3 per cent of GDP);
• Deposits increased by 3.6 per cent to $21.6 billion (109.6 per cent of GDP);
• Loans and advances had a nominal contraction of 0.1 per cent to $12.2 billion (61.9 per cent of GDP); and
• The non-performing loan ratio increased from 10.9 per cent to 12.0 per cent.

Council was updated on the status of the ECCU Credit Bureau Project. It noted that following Requests for Proposals, two firms had been shortlisted and site visits were being planned.  It is anticipated that the Evaluation Committee will recommend a firm by September 2018 and that firm will be licensed to operate by December 2018.   Council reaffirmed its desire to have the Bureau launched by June 2019.

Council was notified of the reconstitution of the Eastern Caribbean Payments Council (ECPC). Given the importance of a stable, efficient and secure payment system, Council fully endorsed the objectives and functions of the reconstituted ECPC and gave its commitment to support further developments including the modernisation of the ECCU Payments System.

3.0         Growth and Competitiveness

As it relates to growth, Council noted that real economic activity is projected to expand by 1.7 per cent in 2018.

Council was briefed on the status of the Eastern Caribbean Partial Credit Guarantee Corporation (ECPCGC) Agreement which came into being on 7 May 2018, noting that six participating governments had enacted the legislation and funding was secured from The World Bank with St Kitts and Nevis self-financing. The ECPCGC is scheduled to become operational by December 2018. Council ratified its decision on the nominees for the ECPCGC Board of Directors.

Council noted the recent dialogue between the ECCB and the Central Bank of Trinidad and Tobago exploring various options to address issues related to the difficulties with payment settlement for traders selling agricultural produce in Trinidad and Tobago.

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

Council was informed that, of the funds available for distribution, 98 per cent was distributed to EC Dollar policyholders, and 76 per cent to US Dollar policyholders under the Plan of Arrangement (BAICO and CLICO) Act on 18 December 2017.

5.0         Change of Substrate for ECCB Banknotes

Council ratified its decision on the designs for the new family of ECCB polymer banknotes. Polymer notes offer the advantages of more advanced security features and greater durability.  Circulation of the new notes is scheduled for mid-2019. 

6.0         Date and Venue of 92^nd Meeting of the Monetary Council

Council agreed to the convening of the 92^nd Meeting of the Monetary Council on Friday, 26 October 2018 via videoconference. 

7.0         Attendance

Council Members who attended the meeting were:

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

   27 July 2018

Suitably qualified citizens of member territories of the Eastern Caribbean Currency Union (ECCU) are invited to apply to fill the post of Director, Human Resource Department, at the Eastern Caribbean Central Bank, headquartered in Basseterre, St Kitts.  The successful applicant will be based in St Kitts and will be hired initially on a two (2) year contractual engagement.

Click here for more information

Chairmanship of the Monetary Council of the Eastern Caribbean Central Bank (ECCB) will be transferred to Dr the Right Honourable Keith Mitchell, Council Member for Grenada, during the official Handing Over Ceremony on 27 July at the Crown Ball Room, Radisson Grenada Beach Resort, Grand Anse, Grenada.

Prime Minister Mitchell will succeed the Outgoing Chairman, the Honourable Roosevelt Skerrit, Council Member for the Commonwealth of Dominica. 

The Monetary Council is the highest decision making authority of the ECCB and comprises the eight Ministers for Finance of the ECCB member governments.  Chairmanship of the Council is rotated alphabetically each year among the eight ECCB member countries: Anguilla, Antigua and Barbuda, The Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines.

Following the Handing Over Ceremony, the Council will convene for its 91^st Meeting where it will receive the ECCB Governor’s Report on Money and Credit Conditions in the Eastern Caribbean Currency Union.  Following the meeting, the new Chairman will host a media conference where he will present the Communiqué, and along with other members of the Council, field questions from the media in Grenada.

The Ceremony will be streamed live on the ECCB’s YouTube Channel - ECCB Connects.

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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