Parliament is expected to meet in an emergency sitting on Tuesday and acting Prime Minister, Dr. John Colin Mc Intyre, said a new Eastern Caribbean Asset Management Corporation Act is expected to be established.
A Bill for an Act to provide for the regulation of the banking sector was brought before Parliament for debate and approval earlier this year.
The Bill also sought for the establishment of a single banking space and for incidental and related matters and the repeal of the Banking Act, No. 16 of 2005 and was unanimously approved.
Mc Intyre said in an interview with state-owned DBS Radio that the Act is necessary in dealing with financial institutions that are facing difficulties.
“You would have known that sometime ago we passed the new banking act and of course there are a number of banks in the region that experienced some difficulties,” he said. “These banks cannot remain in that sort of manner where they are not performing properly. So this body would give power to go in there manage the assets, manage the liabilities with a hope of cleaning up the banks and putting them back into circulation in a positive manner.”
Dr. Mc Intyre pointed out that these non-performing financial institutions can have an impact on the Eastern Caribbean Central Bank (ECCB).
“Because if you have these banks that are non-performing and of course you allow them to deteriorate because of non-performing loans, bad debt and a lot of liabilities then you cannot allow them to continue that way because they in turn have an effect on the ECCB,” Dr. Mc Intyre said.
The Acting Prime Minister said the establishment of the body will be taking care of the management of assets and liabilities of banks.
“Now before the [Eastern Caribbean] Central Bank can go into a bank it has to be governed by law and the Banking Act and this is one aspect of the Banking Act which we need to set up based on asset Management Company which we have of the Eastern Caribbean Asset Management Corporation.”
He continued, “So basically what we are going to do in Dominica and the rest of the [Eastern Caribbean] Currency Union (ECCU), is going to pass the bill into an act to give power to the company to manage the liabilities and assets of these banks that are not performing.”