Anguilla–The St Kitts-based Eastern Caribbean Central Bank (ECCB) says it has assumed control of two indigenous banks in Anguilla noting the move is designed to ensure the stability of the banking system in the entire Eastern Caribbean Currency Union (ECCU).ECCB Governor Sir Dwight Venner in a statement confirmed that the operations of the Caribbean Commercial Bank (Anguilla) Limited (CCB) and the National Bank of Anguilla Limited (NBA) had been taken over.
He said the circumstances that led to this action include the fact that the economies of the ECCU are mainly dependent for their growth on the tourism and construction and that the global crisis has had a major impact on these sectors.In addition, Sir Dwight said that growth in Anguilla "has virtually collapsed falling from an average of 15.8 per cent between 2005 and 2007 to an average contraction of 5.5 per cent for the period 2008-2012."
He said also the banks have seen their non-performing loans escalate to levels beyond the guidelines set by the Central Bank and this in turn has resulted in the banks not meeting their capital requirements.The ECCB governor said the decision to take over the banks is also intended to stabilise and restructure both financial institutions and return them to a state of normality as well as protect depositors and creditors.
"Following the assumption of control the banks will be placed under a period of conservatorship. The ECCB will have full control of the banks for the next six months in the first instance to ensure that these changes are carried out to the satisfaction of the Monetary Council and the Government of Anguilla."
He said the ECCB will be supported by teams of experienced professionals from the International Monetary Fund (IMF) and the World Bank as well as senior banking personnel from the region who will begin the restructuring of both banks."The ECCB has been assured of and has had the full support of the British government in this operation."It will also have the support of the World Bank through funds provided by the Department for International Development (DFID."
"We will also have support from the IMF through funds provided by the Department of Foreign Affairs, Trade and Development, formerly the Canadian International Development Agency (CIDA) for the resolution strategy prepared for the banking sector in the ECCU. The Anguilla Financial Services Commission will also be working closely with the Central Bank in this exercise. Banking business will continue in the normal fashion on Tuesday morning,' Sir Dwight said.
In a broadcast to the nation, Anguilla's Chief Minister Hubert Hughes said the step taken by the ECCB "has not been taken lightly and extensive discussions have taken place with the Foreign and Commonwealth Office of the British government and they too have concurred with this action."Hughes promised that his government will continue to collaborate with the ECCB "to ensure that the relevant measures are put in place to protect the interests of depositors and creditors of the CCB and the NBA.
"The Government is committed to ensuring the safety and soundness of the banking system in Anguilla and therefore fully supports the ECCB in its efforts to address the challenges which the banks are currently facing."But he said that while ECCU member governments have agreed that the three critical policy areas at this time are growth, financial stability and fiscal stability, the efforts to attain financial and fiscal stability will not be successful unless there is some economic growth.
"We therefore intend to initiate discussions with the British government on a public sector investment development programme for the long term sustainability of the Anguillan economy."Hughes said that he hopes London "will partner with us" in developing the country's infrastructure so as to further encourage private sector investment.
"It is no secret that relations between my administration and the UK Government have been fractious as we debated the best direction for Anguilla out of this economic and financial depression which has overtaken us."I have made no secret of the fact that for my administration sustainable finances could only be predicated on a growing and vibrant economy.
"I believe that message is beginning to be accepted by the UK Government and I am heartened by the fact that the new Governor, Her Excellency Christina Scott has declared her priority to be the economic regeneration of Anguilla."Scott said that Britain fully supports the move by the ECCB, noting that "in common with many parts of the world, the continuing growth and development of the economy of Anguilla is dependent on having a safe and sound banking system."
She acknowledged that the global economic crisis has had an impact on the British Overseas Territory and that several discussions have taken place with the various stakeholders in order to address these challenges.