REMARKS BY
TIMOTHY N. J. ANTOINE
GOVERNOR
EASTERN CARIBBEAN CENTRAL BANK
AT THE LAUNCH OF
THE ECCU PUBLIC DEBT AND MARKET INFORMATION WEB
PORTAL
23 JULY 2019
(ECCB Headquarters, St Kitts and Nevis)
Introduction
Allow me to join our Master of Ceremonies, Mrs. Teresa Smith, Director of
Statistics in welcoming all stakeholders to the launch of the ECCU Public Debt
and Market Information Web Portal.
Here assembled, are the builders of this platform together with the suppliers and
consumers of public debt information.
Today's launch marks another milestone in our ongoing enterprise to build out an
ECCU financial market infrastructure that is fit for purpose - a modern, strong
and diversified financial system.
Our Motivation
The Eastern Caribbean Central Bank (ECCB) recognises that information is a
public good and that the dissemination of relevant and timely information, by
both the public and private sectors, is an indispensable element in our quest to
transform the Eastern Caribbean Currency Union (ECCU).
The launch of the ECCU Public Debt and Market Information Web Portal is an
important deliverable in the ECCB's Strategic Plan for this year. If you are not
familiar with this Plan, I urge to visit the ECCB website, familiarise yourself
with it and become an implementation partner.
This initiative was born of a desire to ensure that the public has the best
(accurate and timely) information available to make informed decisions. Whether
this is:
1. an investor considering the purchase of government security;
2. a credit rating agency assessing the creditworthiness of a
government;
3. a financial institution requiring information to meet their IFRS 9
obligations;
4. a licensed broker providing advice to clients;
5. a regional or international financial institution undertaking
surveillance;
6. an academic or student undertaking research; and of course,
7. the media, which is essential player in our liberal democracies.
Indeed, far too often our region is misrepresented because of a paucity of data
and information for published reports. Furthermore, our public discourse is
often characterised by far more heat than light because of missing or
misrepresented facts.
One of the objectives of this particular effort is also to broaden the investor base
for the Regional Government Securities Market (RGSM), a major component of
the Eastern Caribbean Securities Market. The RGSM, now in its 18th year, has
allowed governments to raise almost $14 billion, delivering significant fiscal
savings in the process.
Scope for Growth of RGSM
The RGSM, which forms part of the capital market in the ECCU, is indicative of
the benefits that can be derived from our Single Financial Space:
a) A country with a small population like Dominica of 72,000 persons can
expand its potential investor base to nearly 630,000 across the ECCU.
b) Investors in any ECCU country can make an investment without
worrying about the impact of a depreciation in the currency on their
capital.
c) Investors in any ECCU country can make an investment without
worrying about exchange controls restricting repatriation of principal
and interest.
d) Also, investors in government securities do not have to worry about
taxes on these investments.
e) Licensed brokers can operate across the space without let or hindrance.
At this juncture, our data indicate that less than 1 per cent of the ECCU
population is active on the RGSM. To put this in people terms, only about 350
persons are current investors in this market. When this low level of usage is
juxtaposed with the longstanding situation of excess liquidity in our banking
system, we cannot help but conclude that there is considerable scope to grow this
market.
Ongoing Support for Debt Management
We wish to record our gratitude to the Government of Canada for its sterling
support of debt management in the ECCU through the funding of the Debt
Management and Advisory Services Project. We have seen the benefits of the
capacity building efforts of this project across the ECCU. It is now incumbent on
the Participating Governments and the ECCB to build upon this solid foundation
and create a legacy of professional debt management.
For its part, the ECCB remains fully committed to support member countries
through capacity building in the following areas:
a) debt recording and management;
b) debt sustainability analyses;
c) debt management strategies; and
d) investor relations management.
Before I conclude my brief remarks, I should like to touch on two decisions of
the Monetary Council.
First is the decision that all member countries should seek to attain a public
sector debt to GDP ratio of 60 per cent by 2030. We note the progress made by
member countries.
In 2014, debt to GDP for the ECCU stood at 80.2 per cent. At the end of 2018,
the ratio had fallen to 68.5 per cent. While several countries remain above the
ratio, we are encouraged that the debt trajectory is on the right path.
In pursuing this target, we understand that in some years, on account of natural
disasters or major capital development projects, the ratio may temporarily rise.
However, we continue to encourage our governments to enact fiscal resilience
frameworks, thereby creating buffers and opportunities to pursue fiscal prudence
with some enterprise.
Second, the Council has agreed that the respective governments would lay, in
their respective parliaments, their Medium-Term Debt Management Strategies
(MTDS) and also publish them to strengthen and enhance the transparency and
the credibility of the debt management process.
Conclusion
In conclusion, I wish to thank all my colleagues across the Bank and our several
partners who have assisted with this Project.
I specifically recognise, Teresa Smith, our Director of Statistics, Mrs. Juletta
Edinborough, Deputy Director (Debt), Ms. Rhina Meade, Project Lead and Mr.
John Venner, Adviser.
I also thank: our developers: Ian Mitchell and colleagues at eMagine Solutions
Inc. of Saint Lucia; and our partners: Diego Rivetti while he was at the IMF
(now at the World Bank); Obert Nyawata and Thordur Jonasson from the IMF
Money and Capital Markets Department.
Above all, I express gratitude to our member governments for your active
participation and support for this Project.
We trust that you will find this debt information utility useful.
I thank you all.