The Eastern Caribbean Central Bank (ECCB) has signed a Memorandum of Understanding (MOU) with the Agence Française de Développement (AFD) to assist with incorporating climate-based financial risk management in the supervision and regulation of the Eastern Caribbean Currency Union (ECCU) financial system.
The Governor of the ECCB, Timothy N. J. Antoine, and Senior Investment Officer at the AFD, Lionel Lecrinier, signed the MOU, at the ECCB Headquarters, St Kitts and Nevis on November 10. The MOU represents another step towards greening the ECCU financial system and the ECCB’s fulfillment of its mandate to maintain regional financial stability. Through the MOU, the AFD and the European Union are providing funding to assist the ECCB and national regulators in the ECCU with integrating climate-related financial risk management in their supervision tools. The project also aims to increase the path to green financing and green loans.
The technical assistance being provided through the Agreement will seek to build capacity amongst regulators and financial institutions on the importance and impact of potential climate-related financial risks, as well as how to assess and monitor those risks. The collaboration will also support regional governments’ adoption of adequate regulations to mitigate climate-related risks.
Speaking during the signing, Governor Antoine said, “Climate risk is financial risk. Therefore, we are very pleased to be partnering with the AFD with respect to cooperating in this vital area. This initiative benefits regulators across the currency union. On the heels of COP 28, we want to continue to send a very strong message about the necessity for ambitious and urgent action globally with respect to the climate.”
In his remarks at the signing, Lecrinier said that the assets in the ECCU financial system were at risk due to the consequences of climate change and that the financial system was bearing transition risks. He added that while the region’s financial system was exposed to risks there were also opportunities. He highlighted that renewables and climate-smart agricultural equipment were emerging sectors and part of the green economy.
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