The Council received a report from the Governor of the ECCB Sir. Dwight Venner, in accordance with the ECCB Agreement of 1983.
The report outlined the monetary and credit conditions in the ECCU over the quarter ended December 2011 against the back drop of global economic and financial developments and provided an outlook for the near medium term.
In discussing the prospects for the ECCU, Council examined the three pillars which were exchange rate, fiscal stability and financial sector stability, which inform the analysis of money and credit conditions. Council was informed that the exchange rate pillar continued to be a source of strength and this was expected to be maintained in the short term.
Council recognized the deterioration in the fiscal stability pillar which resulted in lower government revenues causing fiscal imbalances.
Council was apprised that the financial sector stability pillar improved marginally during the last quarter of 2011, but inherent weaknesses in the system persisted. Developments in this area are being monitored closely and ongoing measures being undertaken to strengthen the financial sector should help to stabilize the system over time and mitigate some of the risks.
Council also received the report from the Ministerial Sub-Committee on Banking and reiterated that member governments should be encouraged to give urgent attention to the implementation of strategies to address the issues confronting the ECCU banking sector and received the report from the Ministerial Sub-Committee on Insurance which included an update on the status of Plan B, that is, the sale of the traditional portfolio of BAICO. Council was also apprised of the progress of the discussions with the Government of Trinidad and Tobago on the BAICO/CLICO resolution and approved the dissemination of a media release.
Member who attended the council were, Reuben Meade, Premier and Minister for Finance, Montserrat (Chairman), Hubert Hughes, Chief Minister and Minister for Finance, Anguilla, Harold Lovell, Minister for Finance, Antigua and Barbuda, Roosevelt Skerrit, Prime Minister and Minister for Finance, Commonwealth of Dominica, Nazim Burke, Minister for Finance, Grenada, Dr Denzil Douglas, Prime Minister and Minister for Finance, St Kitts and Nevis, Dr. Ralph Gonsalves, Prime Minister and Minister for Finance, St Vincent and the Grenadines and Mr. Isaac Anthony, Monetary Council Alternate, Saint Lucia.