The Eastern Caribbean Central Bank (ECCB), after due consultation with the Monetary Council, has been directed to exercise the powers conferred on it by Part IIA, Article 5B of the ECCB Agreement Act 1983, and on 12 August 2013, assumed control of the two indigenous banks which operate in Anguilla – the Caribbean Commercial Bank (Anguilla) Ltd. (CCB) and the National Bank of Anguilla Ltd. (NBA).

In a statement by Sir Dwight Venner he stated and explained the circumstances under which control of the operations of the banks were taken over specifically –

“The circumstances under which this action has been taken are as follows:

1. The economies of the Eastern Caribbean Currency Union (ECCU) are mainly dependent for their growth on two sectors, tourism and construction;

2. The global crisis has had a major impact on these sectors;

3. 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; and

4. 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.

He explained, “Over the last two years, the banks have been under very close supervision by the ECCB. The Central Bank has had several onsite inspections of the two institutions and their Directors and Managements have visited the headquarters of the ECCB for consultations. A major diagnosis of the banking sector, including these two banks, was conducted in 2011 by the Task Force on the ECCU Financial System chaired by the ECCB with the International Monetary Fund (IMF), The World Bank, the Caribbean Development Bank (CDB) and ECCU government representatives as members. The results heightened concerns over the operations of the banks. The Monetary Council, in response to the results of the diagnosis, directed the Central Bank to prepare a comprehensive resolution strategy which was subsequently approved by the Council.

Hon Jerome Roberts (Anguilla’s Minister of Home Affairs), Hon Haydn Hughes (Parlimentary Secretary) and Premier Hon Reuben Meade (Montserrat)

Sir Dwight further explained that the objective of taking control of the banks was intended to stabilise and restructure both banks and return them to a state of normalcy; to protect depositors and creditors; and to ensure the stability of the banking system in Anguilla and, by extension, the entire Currency Union.

Chief Minister Hubert Hughes stated that in recent times there had been great unease about the operations of both banks. The Anguilla Government had become concerned, bearing in mind, that they were the largest financial institutions on the island and together accounted for 76.7% of the total assets of the banking sector.

He reasoned that the global economic crisis has had a big impact on local loan performance.

The takeover, for six months in the first instance, has the support of the Anguilla Government, the Foreign and Commonwealth Office of the British Government, the IMF and the World Bank. Both international financial institutions are working with the ECCB team of nineteen officials now involved in the operations of CCB and NBA.

St. Lucia’s Prime Minister Dr. Kenny Anthony, Chairman of the Monetary Council Ministerial sub-committtee on banking called for Anguilla to become a full ECCU member. In a statement he said, “It is important that the Government of Anguilla, in the spirit of cooperation and on behalf of the people of Anguilla, moves in a timely manner to become a full member of the OECS Economic Union in order to complement its membership in the Currency Union.    Chairman of the Monetary Council Ministerial Sub-Committee on Banking,”. Released: 2013

HE Governor Christina Scott, Hon Sir K Dwight Venner, Chief Minister and Minister of Finance Hon.Hubert Hughes and Antigua’s Minister of Finance Hon Harold Lowell

The Governor of Anguilla Ms Christina Scott after outlining the UK’s position on the issue said, also in a statement: “…We therefore stand with the ECCB and the Currency Union’s member states in their efforts to continue to ensure the stability of the Anguillan banking system. I therefore encourage the people of Anguilla to be supportive of these actions which are being undertaken in the best interests of all parties…”  Governor of Anguilla, Her Excellency Christina Scott”. Released: 2013

Meanwhile  the  ECCB Monetary Council Chairman, Denzil Douglas, Prime Minister of St. Kitts-Nevis for his part, said, “This decision was taken after very careful reflection and consultations which have been taking place over a period of time involving several parties.” Chairman of the Monetary Council, the Right Honourable Dr Denzil Douglas`”. Released: 2013

He said further that the decision was made following discussions which, “have taken place with the two banks which have been subject to both onsite and offsite inspections. The ECCB has also met with the Anguilla Financial Services Commission, which has responsibility for supervision of the off shore financial sector.”[vsw id=”jLVxJpK7Hvg” source=”youtube” width=”300″ height=”210″ autoplay=”no”]

In Anguilla, the Anguillan newspaper in reporting on the matter, cited the main quotes from three officials as follows: Chief Minister Hughes: Move “To Protect Depositors and Creditors” ECCB Governor, Sir K. Dwight Venner: “To Stabilise, Restructure Banks…”; and Governor Scott: “UK Supports Efforts To Address Impact on Banking System”.  Chief Minister Hughes thanks”. Released: 2013.