The ECCB Describes Itself as the ‘Monetary Authority’ For The OECS Islands


Harvey Edgecombe

Release Date

Tuesday, June 23, 2015


The ECCB describes itself as the ‘monetary authority’ for the OECS island states, namely Anguilla, Antigua & Barbuda, Dominica, Grenada, Montserrat, St Kitts & Nevis, St Lucia, St Vincent & Grenadines.

Monetary Authority is an ambiguous term, and although the ECCB is categorised as a central bank, in some ways it behaves as a currency board because the currency it manages (EC$) has remained fixed to the US$ at the same rate since 1976. The ECCB itself was actually created in 1983 replacing the Eastern Caribbean Currency Authority; which was a true currency board, because it did not have the authority to regulate banks or lend money to a government in times of need; however the ECCB now has that authority under the Banking Act.

Recently, the ECCB introduced some changes to the Act, which have been creating some controversy among some of the member states. Under the new Act, when the ECCB grants a bank license in one country, it automatically applies to all other member states.

In a statement pertaining to the new Act, ECCB Governor Sir Dwight Venner stated that some OECS banks are now facing "the serious challenge of losing correspondent relations with banks in the USA."

Sir Venner states that this affects the ability to settle simple transactions like paying for imports and sending money to children studying abroad. Sir Venner says this unfortunate situation has occurred because of the ‘small size’ of national banks and ‘requirements’ which have now become compulsory for operating in the ‘international system’.

These new ‘requirements’ that Sir Venner talks about are a direct result of the 2008 financial crisis and can be found at the Bank of International Settlements’ (BIS) website (

Although the common perception of a central bank is that they are sanctioned on behalf of a government or sovereign state, it is often misunderstood to the common observer the true purpose of a central bank. What a central bank does, in effect, is to compete with other central banks in a tit-for-tat game called foreign exchange or forex trade. Central bankers compete with each other for international influence in forex by manipulating their individual interest rates, money supply and other unique tools so that they can gain an advantage over other central banks.

BIS acts as the referee for all central banks; in other words, central banks themselves, no matter how big or small also have to adhere to some form of market regulation.

Other types of banks which we would typically associate with forex trade can be described as ‘bit players’ in the forex game when compared to central banks. In fact these ‘bit player’ banks (such as Barclays, JP Morgan, HSBC and Royal Bank of Canada) are mostly controlled by central banks. However there is also a forex trading system controlled by so-called ‘shadow banks’ which are not necessarily banks as we normally perceive them, but large institutions such as hedge funds that can act as banks and together with central banks and other institutions manipulate and control the forex trade market that conservatively approaches US$100 Trillion annually! This conservative estimate is roughly twice the size of the entire global GDP combined!

In other words if you were to calculate the output of ALL countries in the world, including big ones like China, the USA, Brazil, Russia, Mexico, Indonesia, the Eurozone, down to small nations and micro-nations in the Caribbean such as Montserrat or Nevis, then double that number and you begin to approach the conservative estimate of global forex trade.

But forex was not always this big and some observers suggest it has grown to this enormous and disproportionate size as a direct result of the new BIS ‘requirements’ that Sir Venner now looks to impose on OECS member states. More worryingly however, is that prudent market observers are predicting that forex is about to collapse under its own weight and furthermore there is no system yet invented that can prevent the collapse from happening.

Investment banks were ‘too big to fail’ back in 2008, so they were nationalized. But what happens if (or when) a central bank fails? And what happens if (or when) they all begin to fail together? And what happens to the now nationalized investment banks if (or when) the central banks fail and forex trade capitulates under its own weight?

These are questions prudent market observers are asking and the answers to these questions are unimaginable. 2008 was the tip of the iceberg; the worse is about to happen if the predictions hold true.

With the new Act, the ECCB, may now be hoping to implement some form of damage control system for the OECS region in the event of the predicted collapse; of course a prediction is never certain and we can always pray it doesn't happen. But the evidence suggest contrary. Or perhaps the ECCB has decided not to leave everything up to God; or perhaps they have seen the size of the forex market and have become tempted (by Satan?) to get more involved in forex because of the enticement, the excitement and the vast amounts of money that surrounds it.

More probing; perhaps external forces have manipulated the ECCB in order to take control of their currency; because after all this is a game and somebody has to win and somebody has to loose, lets hope and pray that it’s not us!

Note: Harvey Edgecombe is an Editorial Contributor with MNI Alive Media

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