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Eastern Caribbean To Shore Up Banks, With Deficits Falling

by Mike Godfrey, Lowtax.net, Washington
11 November, 2014

The fiscal positions of the members of the Eastern Caribbean Currency Union improved substantially during the twelve-month period that ended September 2014, according to a report tabled before the 80th Meeting of the Monetary Council of the Eastern Caribbean Central Bank (ECCB).

The Eastern Caribbean Currency Union (ECCU), comprising Antigua and Barbuda, Dominica, Grenada, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines, had collectively reduced their primary deficits (inclusive of borrowing costs) by XCD71.8m (USD26.6m) over the period, the report said.

The Council urged the need for the territories to collaborate more deeply on fiscal policy decisions to mitigate tax competition between the territories and ensure the adoption of sound policies.

While the fiscal health of the island nations is said to be improving, a communiqué issued following the meeting expressed the need for territories to focus on strengthening the banking sector.

It said: "Council discussed the economic conditions in the ECCU member countries and the role of commercial banks in the growth and development thrust. Council expressed concern with regard to commercial bank charges and indicated that some action needed to be taken to address this matter. Council also agreed that a concerted approach to the restructuring of the banking sector was critical."

The Council said that ECCU territories must continue to work together to strengthen the regulation and supervision off the financial sector.

The Council noted that several laws have been adopted to stabilize the banking sector, including amendments to the ECCB Agreement and the Banking Act, legislation establishing the Asset Management Corporation, and amendments to regional legislation on foreclosure. A working session of ECCU, Financial Secretaries, Attorneys General, International Financial Institutions and the ECCB to review this legislation will be held in St Lucia later this month.

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