September 25, 2020

OECS financial sector stable and resilient but facing challenges, says Monetary Council


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By Ken Richards From WINN

St Kitts and Nevis (WINN): The chairman of the Monetary Council of the Eastern Caribbean Central Bank, Antiguan Prime Minister Gaston Browne, on Thursday (March 2) gave an account of the discussions held at the Council’s 87th meeting at the Central Bank.

Quoting from the ECCB governor’s report on Monetary and Credit Conditions in the Eastern Caribbean Currency Union, indicated that there had been improved economic activity for most of 2016.

“The report indicated that a) economic activity in the Eastern Caribbean Currency Union is estimated to have improved in the first nine months of 2016 compared to the first nine months of 2015. The improvement was mainly due to the increase in tourist arrivals and travel receipts as well as an expansion of construction activity b) monetary conditions also improved during the review period mainly due to increased financial flows from abroad, this improvement has a positive effect on economic conditions generally. Credit conditions remained relatively tight with minimal changes in interest rates and a continued decline in banking sector credit to the private sector, including businesses and households.”

The Monetary Council meeting wants to see commercial banks in the increasing lending to the private sector to encourage growth.

“Given the importance of private sector development to growth and competitiveness, the council approved and signed the agreement for the establishment of the Eastern Caribbean Partial Credit Guarantee Corporation to facilitate the private sector access to financing. The Eastern Caribbean Partial Credit Guarantee Corporation is designed to encourage financial institutions in the Eastern Caribbean Currency Union to increase their lending to micro, small and medium sized enterprises to the provision of partial credit guarantees, to facilitate access to financing by the private sector. Council agreed that commercial banks should be encouraged to increase lending to the private sector as a means of spurring growth.”

Proposed amendments have also been put forward for the 2015 harmonized OECS Banking act, according to the .

Reference was also made to the BAICO/CLICO insurance matter.

“The Monetary Council noted that the plan of arrangement BAICO/CLICO Act was passed in all if the Eastern Caribbean Currency Union territories and was presented to the Bahamas parliament for a first reading on February 15 2017. Once the Act is passed the process of engaging the Eastern Caribbean Currency Union court will commence. Regarding CLICO, the core committee on insurance continues to advocate on behalf of the policyholders for fair and equitable treatment by the judicial manager. All options are now being considered as council presses to ensure that the rights of the policyholders are observed and enforced.”

The Monetary Council Meeting was attended by the finance minister of the OECS member states, who are all leaders of their countries.

The next council meeting will be under the banner of the OECS Authority.

The Authority is the supreme policy making body of the OECS and is responsible for the general direction and control of the performance and functions of the Organization.

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