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St Kitts and Nevis (WINN): The governor of the Eastern Caribbean Central Bank, Timothy Antoine, is promising robust discussion in the coming months, on the consolidation of the national banks in the Eastern Caribbean Currency Union - ECCU.

Governor Antoine says these banks have played a very important role in the development of the region.

He wants to see them strengthened to be able to compete with the international banks, through a process of consolidation.

“From where we sit in the ECCB, we are very clear that there is a role for National Banks in our banking system and in our development and that is why we continue to make the argument , we want to make sure we are strong National banks in the space that can survive, that can compete with international banks, that can serve the people of the region.  And why is that? Well our experience show that national banks play a very important role in the development of our region. You ask a lot of people in this region they have benefited from National banks, whether it’s for their business, whether it’s for their mortgage, whether it’s for student loans whatever. So we believe there is a role, there is a place but we see a threat to National Banking in these small silos in these small standalone entities, given what is happening in the international environment. And so the best way to preserve National Banking is to consolidate, to become stronger, to muscle up as it were, to be able to compete and respond internationally.”

According to the ECCB Governor, consolidation will also help the region tackle the de-risking, lost of correspondent banking relations affecting the Caribbean today. 

“We continue to articulate the need for us to look at consolidation as an important response to ensure that we have the sufficient mass,  volumes, to make us more attractive for corresponding banks, because one of the issues we hear sometimes from corresponding banks too small, volumes too low. So when they look at risk and reward they sometimes come to the decision, let us terminate the relationship. We feel if our banks come together, we’re better able to address risk management as well as to present a more viable and more attractive proposition for corresponding banks. So the issue of consolidation which preceded de-risking or loss of corresponding bank relations, to be clear, is an important response we think to the issue of loss of corresponding bank relations.”

Pointing to consolidation within the Credit Union movement in one OECS state, Governor Antoine suggested that move should encourage the development banks to also go that route.

“And I like the fact that the Credit Unions understand this point.  I look at what Dominica is doing and has done in that space for example where Credit Unions have come together to be stronger and to deliver better services to their customers and that is an important lesson that I think other Credit Unions can learn and even our banks can learn.  I really feel that that is the way we have to go and I like the approach in Dominica for example where you continue to have community identity, so the credit unions have maintained their identity in the community but they are part of a bigger, stronger unit because they’ve consolidated because they’ve amalgamated and I think there is a lot of power in those examples and I frankly feel that  is the way we have to go.”

 

 

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