1 December 2018, Basseterre, St Kitts and Nevis - The Eastern Caribbean Central Bank (ECCB) hereby confirms that it has received an application from Republic Financial Holdings seeking regulatory approval to acquire the Bank of Nova Scotia’s operations and businesses in the Eastern Caribbean Currency Union (ECCU). This application was received on Tuesday, 27 November.

Pursuant to the Banking Act, the ECCB has commenced its review of this application.  In this regard, the ECCB has held initial discussions with the Central Bank of Trinidad and Tobago and the Bank of Guyana.  These regulators will collaborate on the review of this application.  The ECCB will also confer with the Central Bank of St Maarten and Curacao.

It should be noted that the ECCB already regulates Republic Bank since it has an operation in Grenada.  Republic also has a stake in a bank in Saint Lucia.

It has come to the attention of the ECCB that there is some speculation that Republic’s acquisition of Scotiabank’s operations in the ECCU could lead to the depletion of the foreign reserves that back the
EC dollar.  Such speculation is unfounded and unhelpful. 

The ECCB is clear and resolute about its mandate to protect the EC dollar and wishes to make it abundantly clear that it will continue to maintain very high levels of foreign reserves as it has done for the past 35 years.

The proposed acquisition has prompted discussion about the ownership of banking assets in the ECCU. At present, 55 per cent of banking assets are owned by three Canadian banks and Republic Financial Holdings and 45 per cent of banking assets are owned by indigenous (national) banks.  The proposed acquisition, if approved, would not fundamentally change that ownership distribution, as 55 per cent of the banking assets would be owned by two Canadian banks and Republic Financial Holdings and 45 per cent of the banking assets would continue to be owned by our indigenous (national) banks.

From time to time, there will be changes in ownership of banks.  Indeed, the proposed transaction is the latest in a series of consolidation moves by the Canadian banks.  It is distinctly possible that there could also be some consolidation moves among indigenous (national) banks.  Citizens and residents in the ECCU should come to expect these developments as part of the banks’ response to both global developments and competition in the ECCU banking space.  Indeed, the ECCB continues to encourage indigenous (national) banks to cooperate and consolidate to ensure the interests of the people of the ECCU are best served.  In this regard, we refer the public to our Consultative Paper on Consolidation of National Banking Sector in the ECCU published in July of this year.

Citizens of and residents in the ECCU are encouraged to remain calm and stay abreast of developments in the banking sector.

About the Eastern Caribbean Central Bank

The Eastern Caribbean Central Bank (ECCB) was established in October 1983. The ECCB is the Monetary Authority for: Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis,
Saint Lucia and St Vincent and the Grenadines.

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 Media Contact: Ingrid O’Loughlin, Senior Director, Corporate Relations Department

Phone: (869) 465-2537 | Fax: (869) 465-9562

The Eastern Caribbean Central Bank (ECCB) invites submissions of expression of interest from qualified persons to fill the role of Blockchain Technical Adviser to support its piloting of a digital EC currency (DXCD).

The pilot project, scheduled to commence at the end of January 2019, is a research initiative and will cover a period of approximately 16-18 months. It will provide a safe space in a controlled live environment to issue DXCD and facilitate an informed understanding of its impact on several constructs including:

1. The ECCU monetary and financial systems;
2. Circulation of EC currency;
3. Financial intermediation in a digital environment; and
4. Know Your Customer (KYC) and Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) regulatory compliance.

Click here for more information.

Communiqué of the 92^nd Meeting of the Monetary Council of the Eastern Caribbean Central Bank

The Ninety-Second Meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB) was held via videoconference at the ECCB Headquarters, Basseterre,
St Kitts and Nevis, on 16 November 2018, under the chairmanship of Dr The Right Honourable Keith Mitchell.

1.0  Monetary Stability

Council received the Governor’s Report on Monetary and Credit Conditions in the Eastern Caribbean Currency Union (ECCU).  The report outlined the recent trends in monetary and credit conditions as at 30 June 2018, against the backdrop of global economic and financial developments and 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:

• Monetary and Credit conditions in the ECCU banking system showed a slight deterioration as at the end of June 2018 when compared with the same period in the previous year, but remained favourable.
• The Currency Union’s exchange rate arrangement continued to be well supported by an adequate level of foreign currency reserves.
• The backing ratio stood at 97.5 per cent, which was notably above the operational (80 per cent) and statutory (60.0 per cent) limits.
• Private sector credit from banks rose by 0.4 per cent ($40.4m) mainly on account of 9 per cent ($32.4m) increase in credit to private businesses.
• Global growth projections have been revised slightly downward to 7 per cent for both 2018 and 2019 compared with 3.9 per cent in the IMF’s World Economic Outlook April 2018 projections.
• US growth is expected to remain robust at 2.9 per cent in 2018, supported by the recent fiscal stimulus. However, the forecast is for slower growth in 2019 as the stimulus of the tax cuts fades.

• Downside risks had strengthened in recent months including:
  1. Escalating global trade tensions;
  2. Tightening of financial conditions particularly in emerging markets;
  3. Rising oil prices; and 
  4. Climate Change.

Following deliberations on 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 30 June 2018, the ECCU commercial banking sector was assessed as stable when compared to the previous quarter’s performance.  Council noted that:

• Total assets decreased by 0.26 per cent ($80.4m) to $30,701.4m;
• Deposits decreased by 0.22 per cent ($46.6m) to $21,530.8m; and
• Loans and advances recorded a nominal increase of 0.12 per cent ($14.3m) to $12,223.0m.

With respect to the Credit Bureau, Council was informed that the Credit Reporting Legislation had been already passed in four member countries: Antigua and Barbuda, Grenada, St Kitts and Nevis and St Vincent and the Grenadines.

Furthermore, an operator for the credit bureau has been selected and should be licensed by year end.  The Credit Bureau for the ECCU is expected to become operational in the second half of 2019.

Council received a paper on the establishment of Deposit Insurance Fund in the ECCU to further protect depositors.

3.0  Fiscal and Debt Sustainability

Council also noted that the ECCU Debt to GDP ratio continued its downward path to the target of 60 per cent and currently stands at 69.5 per cent.

4.0  Growth and Competitiveness

As it relates to growth, Council noted that ECCU growth was projected to accelerate to 2.9 per cent in 2018 and 3.8 per cent in 2019 after the growth setback caused by the devastating hurricanes in 2017.

With respect to the challenges experienced by St Vincent and the Grenadines pertaining to the payment to traders selling agricultural produce in Trinidad and Tobago, Council welcomed the solution reached between the ECCB and the Central Bank of Trinidad and Tobago (CBTT).  The solution will facilitate trade of agricultural produce from St. Vincent and the Grenadines to Trinidad by making it easier for certified traders in St Vincent and the Grenadines to exchange TT dollars for EC dollars.  Council noted that the ECCB and the CBTT had agreed to pilot the solution using the Bank of St Vincent and the Grenadines Limited as the intermediary.

Council discussed ways to strengthen statistics in the ECCU including the modernisation of Statistical Acts; increased use of ICT in statistics; and development of Tourism Satellite Accounts

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

Council was apprised that distribution to creditors under the Plan of Arrangement and the Annuity Relief Program continued. A second distribution of approximately EC$35M is being planned to be paid by end of 2018.

6.0  Date and Venue of 93^rd Meeting of the Monetary Council

Council agreed to the convening of the 93^rd Meeting of the Monetary Council on Friday, 15 February 2019 in St Kitts and Nevis.

7.0  Attendance

Council Members who attended the meeting were:

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

16 November 2018

The Eastern Caribbean Central Bank (ECCB), in collaboration with the Regional Security System Asset Recovery Unit (RSS ARU), announces the launch of the ECCB Creative Youth Competition.

The ECCB Creative Youth Competition is designed to allow students to demonstrate their creativity and critical thinking skills through various genres including: essay writing, poetry, song writing and art. The competition is opened to students aged 13-19 in the eight ECCB member countries.

This year, the competition will focus on essay writing. Students who wish to participate will be required to write on one of the following topics:

1. Towards a cashless society: challenges, opportunities and the realities for the Eastern Caribbean Currency Union.
2. For the Eastern Caribbean Currency Union to become economically viable, we must strive towards financial sustainability through technology. Discuss.

The topics were selected in collaboration with secondary school teachers across the ECCB member countries.

The essays will be judged in two categories: ages 13 to 16 and 17 to 19, and will be assessed for content, soundness of points, logical development, knowledge of the subject, command of language and presentation.

Cash prizes, tokens and trophies amounting to $20,500.00 will be awarded to the top three winners and their respective schools and mentors.

The essays for the 2018-2019 ECCB Creative Youth Competition must be submitted to the ECCB Headquarters or the Bank’s Agency Office in the respective member countries, no later than 31 January 2019.

Click Here for more information

About the Eastern Caribbean Central Bank and Regional Security System Asset Recovery Unit

The Eastern Caribbean Central Bank (ECCB) was established in October 1983. The ECCB is the Monetary Authority for: Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis, Saint Lucia and St Vincent and the Grenadines.

The Regional Security System Asset Recovery Unit (RSS ARU) was created out of a need for a collective response to security threats, which were impacting on the stability of the region in the late 70’s and 80’s.

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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

Securities Issue on RGSM Increase

The number of securities issued on the Regional Government Securities Market (RGSM) during the first eight months of 2018 was on par with the record number of 59 recorded in 2017.

That was one of the key messages from the report on the performance of the RGSM for the period January to August 2018, presented to the Regional Debt Coordinating Committee (RDCC) at its meeting on 4 October.

The RDCC, which has direct oversight of the RGSM, recognises the increased interest of residents in the Eastern Caribbean Currency Union (ECCU) in the RGSM.  The RDCC noted that investors demonstrated strong support for government bonds as the participating governments issued six bonds in the first eight months of 2018 compared with two for the same period in 2017.

The RDCC is of the view that the increased issuance of bonds is consistent with the goals of the Medium Term Debt Management Strategy to increase the average time to maturity of the public debt which in turn reduces the risks in the debt portfolio.

The RDCC reported that government securities continue to provide an attractive option for residents seeking to increase returns and/or diversify their investment portfolios.  Over the period January to August 2018, the average rate on short term securities ranged from 2.5 per cent to 4.0 per cent, while rates on longer term securities ranged from 5.5 per cent on two-year bonds to 7.3 per cent on 10-year bonds.

The RDCC comprises senior officials from the Ministry of Finance of the eight ECCB member governments and the Governor of the Eastern Caribbean Central Bank.

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