Regional Banks Remain Well Capitalized Despite Global Uncertainty

The Eastern Caribbean Central Bank says commercial banks across the Eastern Caribbean Currency Union remained resilient during the 2025-2026 financial year, supported by strong capital buffers, ample liquidity and improving asset quality despite heightened global economic uncertainty.

The assessment is contained in the Bank’s 2025-2026 Annual Report, which concludes that the region’s financial system continued to demonstrate stability even as geopolitical tensions, changing trade policies and global market volatility presented challenges for small open economies.

According to the report, the banking sector benefited from robust capital adequacy, high levels of liquidity and continued improvements in the quality of loan portfolios, allowing financial institutions to remain well positioned to support economic activity across the eight-member Eastern Caribbean Currency Union.

The Bank said those conditions helped underpin regional economic growth, which was estimated at 2.5% in 2025, driven primarily by tourism and infrastructure investment. Inflation also eased during the latter part of the year while the Eastern Caribbean dollar maintained its long-standing fixed exchange rate of EC$2.70 to US$1.

Governor Timothy Antoine said the year was marked by “heightened global uncertainty and profound shifts in the international political economy,” citing changes in trade policy, geopolitical tensions and realigned diplomatic alliances that disrupted the global economy.

For the Eastern Caribbean, he said those developments reinforced the importance of prudent policymaking, strong institutions and regional cooperation.

“Despite these external challenges, the ECCU maintained economic stability,” Antoine wrote in the report’s foreword.

The annual report notes that preserving financial stability remains one of the ECCB’s core mandates and forms one of six strategic priorities under its newly adopted 2026-2031 Strategic Plan, known as “The Big Push: Collective Action for Shared Prosperity in the ECCU.”

As part of that strategy, the Bank intends to strengthen the region’s financial infrastructure through continued regulatory reforms, expanded financial inclusion and modernization of payment systems.

Among the major reforms already underway are the establishment of the Office of Financial Conduct and the Eastern Caribbean Financial Standards Board, both of which are expected to strengthen oversight of non-bank financial institutions, including credit unions and insurance companies.

The ECCB also continued expanding financial inclusion during the year through the launch of the ECCU First Step Savings Account, giving more residents access to basic banking services, while the regional EveryData ECCU credit reporting platform began receiving information from participating institutions to improve credit underwriting and expand access to financing for households and businesses.

Looking ahead, the Bank said preserving financial stability will remain a central priority during 2026-2027.

Its work programme includes bringing the ECCU Credit Bureau into full operation by onboarding remaining credit unions, development banks, hire purchase companies and other credit information providers. The Bank said broader participation will improve the availability of credit information, resulting in faster loan approvals, stronger risk assessment and more efficient lending decisions across the financial system.

The ECCB also plans to continue strengthening regulatory and supervisory frameworks, improving data quality and advancing legislative reforms designed to safeguard the financial system while supporting inclusive economic growth throughout the Currency Union.

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