The Eastern Caribbean Central Bank (ECCB) will over the next year focus on financial stability, fiscal and debt sustainability, and growth and competitiveness, incoming chairman, Prime Minister of St. Vincent and the Grenadines Dr. Ralph Gonsalves said on Friday.
“I must emphasise that financial stability will remain paramount and will continue to be addressed using the strategy for strengthening the resilience of the financial sector, which was approved by the monetary council,” he said at the ceremony at Buccament Bay Resort, west of here.
Gonsalves has taken over the rotating chairmanship from his St. Lucian counterpart, Dr. Kenny Anthony, and warned that not maintaining the financial stability “would weaken immensely all the other things which we are trying to do.
“So, that is, in a sense, the lone start,” he said.
He said that in addressing the immediate challenges in the banking sector, the focus will be on the restructuring and recapitalisation of the banking system.
“And under my chairmanship, the exercise to measure the capital requirements of the commercial banks will be completed.”
Gonsalves said this includes stress testing, credit portfolio reviews, appraisal of collateral and audit reports.
“This will facilitate the commencement of the restructuring and capitalisation of the commercial banks, with immediate attention given to the banks which have been put under the control of the Central Bank.”
“I am conscious of my obligation and responsibility to assist in guiding the Monetary Council as the Central Bank implements the regulatory processes and commences the restructuring and recapitalisation of the bank,” he said.
Gonsalves further said that the economies of the Currency Union have also been affected by natural disasters and knock on problems particularly in the insurance field, with the demise of CLICO and BIACO and the challenges faced by indigenous banks in terms of capital adequacy and liquidity.
Across the commercial banking sector, there are also real problems relating to non-performing loans, which have remained by and large above prudential levels, an inadequate provisioning for loss.
The currency union has also registered a decline in profits in some commercial banks, and in on-banking financial institutions outside of insurance companies, there have been challenges and regulators have had to intervene.
“We always must remember that the constraints of small size, the effects of the openness of our economies and our essential or indeed existential vulnerabilities, that there are always issues which we have to address and to overcome those limitations while at the same time taking advantage of the possibilities which are inherent among us and in the regional and global system.”
“I accept the chairmanship in an economic environment which still remains very challenging, because significant growth in the international economy is not very favourable. Indeed the international economy is expected to be weak to moderate and it is uncertain and certainly uneven, between countries in the developed and emergent economy and unevenness within the leading sectors in those economies.”
He said the figures indicate that there is only weak to moderate growth in the economies of the United States, Canada, the United Kingdom, and the European Union.
“… and these are our main trading partners. But even if we have a moderate recovery in the global economy, there is always a time lag between what takes place there and what takes place here.
“What happens, when there is a meltdown, the meltdown affects us with a certain immediacy, but when there is an improvement, there is a time lag of that improvement touching us in a positive way,” Gonsalves said.
He said even if there is some moderate improvement currently, the region will not see the full impact until next year.
“So that across the currency union, the expectation is that economic activity will remain moderate to low and that we will probably as a currency union not return to the pre-crisis level until by the end of next year,” although some countries have done do.
Gonsalves said the work done by outgoing chairman Prime Minister Anthony and his team over the past year was extraordinary.
“I want to thank the people of the currency union for focusing on hard, smart productive work in the main and to have assisted all of us in seeing some light at the end of the tunnel as we come out from,” he said.
He, however, added that a difficult bundle of challenges brought on by the financial meltdown of September 2008, meltdown metamorphosed into the continuing global economic crisis.
He said those who have not been dedicated to hard, smart labour should get on to that train and leave that which focuses on “leisure, pleasure and nice time”.
He said such a work ethic is necessary to grow the economy.
There will also be no growth if, at the managerial and all levels of endeavours in the private and public sectors, citizens do not perform optimally.
“No productive society has been established in the interest of people without hard and smart work,” Gonsalves said.
“That is why we have shot ourselves in the foot with the increase in criminal activities, generated by those who focus on leisure, pleasure, and nice time and who, invariable have insatiable desires for material gain which cannot be attained reasonable from what is available, and they are invariable in a state of disappointment and disillusionment, because it began first with a set of illusions about what can happen…
“I accept the chairmanship of the Monetary Council as an honour of the people of St. Vincent and the Grenadines, and I pledge, as always, to take my responsibilities very seriously and to help my colleagues the governor and his team to build upon what we have already so assiduously constructed,” Gonsalves said.
God help the Eastern Caribbean. He is accepting this post in the name of Vincentians, please don’t include me in that, I want no part of what he may or may not do.
SVG is in tatters, now they are letting him loose on the whole Eastern groupage.
THe Cubans must be chuckling with delight.
“Under Gonsalves chairmanship, ECCB to focus on financial stability”
Hahah, that has to be the funniest headline in the history. What does Dr Ralph know about finance? Thank God they have people at the ECCB that won’t let him do as he please like in SVG.
Away with the long talk, it is just words on paper, and that is all you are good at.
Action speaks louder than words, how can you provide financial stability, for that institution, when your country is buckling under debt and the hospital run down to the state it is due to not enough money to provide equipment and supplies, and essential blood test at the lab for the poor people of SVG, who cannot afford to fly over sea to obtain medical attention, like you and your ministers.
You have admitted that your hospital has failed by promising in parliament not to long ago, to provide medical help to ministers who need it, what about the rest of the population.
Thank god the December storm came, so your government can get some money and donated good from home and abroad, to make you look as if you’re doing something, because no economic activity is happening in the country.
People of the OECS, dont be taken in by PM Raloh E. Gonsalves big talk, just asked him this question as it relates to any of the things he said he is going to focus on. He is a disaster zone, anything his hands touches turns to dust; in otherwords brace yourself for the bankruptcy of the ECCB immediately after Ralph Gonsalves supervisory term is completed.
For the first time in the History of the OECS establishment the EVCB will be soliciting help from aid institutions and that fact is going to affect the EC dollar and each OECS state economy in the worst way possible.
Good luck for after Gonsalves term as Chairman of the ECCB you will need more than good luck you all will need a hand out.
Allan Palmer
I am greatly troubled and disturbed at the fact that the O.E.C.S heads of Government may have lost their minds and have gone raving mad. Of all of the decision they could have made, they have chosen to cause Ralph E. Gonsalves to be entrusted with the Chairmanship of the Eastern Caribbean Central Bank (E.C.C.B) the most critical financial institution within the O.E.C.S. What a calamity!
Never in my life, have I ever heard any of the O.E.C.S head of Government, who took over the Chairmanship of the E.C.C.B, did so with such cheer and fanfare. I hope the people are wise enough to take the noise as a sign of the disaster that is waiting on the horizon.
I sure hope, the people of the O.E.C..S, are not taken in by PM Ralph E. Gonsalves big talk, just asked him one question as it relates to any of the things he said he is going to focus on, any question! The citizens of the O.E.C.S must be made aware that Prime Minister Gonsalves is a disaster zone and anything his hands touches turns to dust; (fails) in other words; brace yourself for the bankruptcy of the E.C.C.B immediately after Ralph Gonsalves supervisory term is completed
Gonsalves to focus on financial stability? What a travesty. If that position was done on the basis of how you manage your country’s finances no way was Dr Gonsalves could have been elevated to such an important position. Lord Help the OECS!
Like most of the others on this issue, I have no confidence in Ralph to do anything better than his predecessor. How ironic that Ralph messed-up the SVG bank and sold it to ST. Lucia. Now he’s taking over management of another bigger institution from his ST. Lucia buddy. This is like out f the frying pan into the fire.