The members of the Organization of Eastern Caribbean States (OECS) should move to establish immediately two separate bodies to regulate domestic non-bank financial institutions and the offshore financial services sector. In turn, these new bodies should work closely with the Eastern Caribbean Central Bank (ECCB).
Financial problems in the member states of the OECS, posed by the CL Financial Group headquartered in Trinidad and Tobago and the on-shore and off-shore banks of R Allen Stanford located in Antigua, have underscored the vital importance to the economies of these countries of strong supervision for both non-bank financial institutions, such as insurance companies, and the offshore financial services sector. The problems will worsen in the coming weeks. The IMF has warned the OECS that “waning economic growth after a period of rapid private credit expansion poses a major risk to the stability of the banking system”. Continue reading