Finance ministers get reports from sub-committees

Headquarters of the Eastern Caribbean Central Bank (ECCB)

BASSETERRE, ST. KITTS, FEBRUARY 16TH 2012 (CUOPM) – Finance Ministers from the Eastern Caribbean have received reports from several ministerial sub-committees of the Monetary Council of the Eastern Caribbean Central Bank (ECCB).

According to a communiqué issued at the end of the one-day 72nd Meeting at the St. Kitts-based Eastern Caribbean Central Bank (ECCB), the Sub-Committee on Banking 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.

Council received the report from the Ministerial Sub-Committee on Insurance which included an appraisal 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.

The Ministerial Sub-Committee on Debt reported on the urgent need to provide practical solutions to the debt issues ECCU member governments faced.

Council was apprised by the Sub-Committee on Credit Unions conducted on twelve credit unions in five of the ECCU member countries: Antigua and Barbuda, the Commonwealth of Dominica, Grenada, St. Lucia and St. Vincent and the Grenadines.

Council was informed that the reviews would continue with the assessment of the credit union sectors in Anguilla, Montserrat and St. Kitts and Nevis and agreed to encourage member governments, which have not yet done so, to enact the Harmonised Co-operatives Societies Act.

Following the report from the Ministerial Sub-Committee on International Financial Services, Council agreed to conduct a regional comprehensive study to identify the attractiveness of the ECCU market; aspects of collaboration among member governments; and to make recommendations for the way forward.

In the update on the Resolution Trust Corporation, Council received the update on the operational arrangements being put in place, which was established to restructure and recapitalise financial institutions and manage troubled assets.

Council was advised that the legislation regarding the legality of the roles and functions of the RTC differed among member countries and agreed that efforts should be made towards enacting a uniform legislation.

Council also received the report on price developments in the ECCU for the fourth quarter of 2011 which indicated that inflationary pressures slowed during the quarter but continued on an upward trend.

At the end of December 2011, the rate of inflation was 0.5 percent compared to 1.1 percent in the third quarter of 2011 and 0.4 percent in the corresponding period of 2010. Several sub-indices including: education, food, transportation and communication, and medical care and expenses increased, while alcoholic drink and tobacco, fuel and light, and personal services recorded significant declines.

Council also received the report on a further analysis of the Liquefied Petroleum Gas (LPG) pricing in the ECCU, and in light of the potential fiscal benefits and cost savings to consumers, agreed to recommend that member governments that were currently using the Mean Caribbean Postings (MCP) arrangement, should engage fuel suppliers to adopt the Mont Belvieu bench mark for pricing LPG. Council also agreed to expand the study to include other fuel products.