This came as part of the 70th Meeting of the ECCU Monetary Council which recently concluded in Montserrat.
According to a communiqué issued following the meeting, Council members also received reports from the Ministerial Sub-Committees on Banking, Debt, Credit Unions and International Financial Services.
Council noted the actions taken to date, including the sale of the BAICO property portfolio and the launch on 18 May, 2011 of the ECCU/BAICO Health Insurance Support Fund. Work on the sale of the traditional life insurance portfolio was now underway.
Council noted that the ultimate resolution of the BAICO/CLICO issues was dependent on the available funding. Accordingly, Council considered funding options for the resolution program as well as different compensation scenarios for addressing the financial obligations to policyholders and depositors. Council agreed that given the limited fiscal space of the ECCU member governments at this time, priorities would have to be set with regard to the implementation of the resolution program.
Council also reiterated that the regional approach being taken by the ECCU member countries was critical, but that co-operation from Barbados and Trinidad and Tobago was of utmost importance in finalizing a compensation scheme.
Council noted the report on the Ministerial Sub-Committee on banking which updated members on the immediate challenges facing the banking sector. Council was apprised of developments related to the operationalization of the Resolution Trust Corporation. Council also noted that the ECCB was collaborating with technicians from the IMF, the World Bank and the CDB in exploring various regional options for addressing the issues.
The Monetary Council was informed that the Ministerial Sub-Committee on Debt held its inaugural meeting on 12 July 2011 and confirmed its Terms of Reference as well as those of the Technical Committee formed to provide advice and technical support to the Ministerial Sub-Committee.
Council noted that the Sub-Committee focused on three critical policy issues during its first meeting, namely, the debt situation and its impact on the banking system; a regional approach to debt management and debt restructuring; and the role of the Regional Government Securities Market (RGSM) in debt management.
Council reiterated that given the prevailing economic and financial conditions, debt management and debt restructuring must be pursued aggressively and collectively with institutional arrangements at the political, technical and country levels.
The Monetary Council was updated on developments in the credit union sector since the last meeting of the Council.
It noted the status of the Revised Cooperatives Societies Bill and agreed to urge those member countries which had not yet done so, to take the necessary actions to bring the legislation into effect.
Council further noted that the inaugural meeting of the ECCU Association of Credit Unions took place on 7 July 2011 and the association is expected to form a partnership with ECCU member governments to create the context and conditions favourable to the development of the credit union sector.
The Ministerial Sub-Committee on International Financial Services updated the Monetary Council on recent developments which focused on the status of the peer reviews which are being conducted as a requirement of the OECD’s Global Forum in assessing whether countries have the adequate legal infrastructure for the exchange of information for tax purposes.
Council noted the importance of completing the reviews as the peer review reports become public documents which serve as a guide for doing business internationally.