A resourceful leader and progressive voice
Timothy Antoine has an atypical central banker’s job. Firstly, serving the needs of eight different economies — he became governor of the Eastern Caribbean Central Bank (ECCB) in February 2016 — requires a poise and judgement that economists say he has in abundance.
Secondly, given the Eastern Caribbean dollar’s peg to the US dollar, the ECCB has limited room for manoeuvre on monetary policy.
This makes good fiscal management in member countries critical; economists praise the governor’s leadership in encouraging regional collaboration on this issue.
“One of our bank’s strategic priorities is to be the advisor of choice on fiscal and debt sustainability issues for the countries we serve,” Antoine told GlobalMarkets. “We have encouraged the adoption of fiscal resilience frameworks, which are vital to embedding fiscal discipline and pursuing countercyclical policy in the face of shocks.”
Several metrics suggest the Eastern Caribbean Currency Union (ECCU) is performing well under Antoine’s leadership.
Average debt to GDP has dropped from 85% five years ago to 71%; the bank has a target of 60% by 2030. The Eastern Caribbean dollar, which has been pegged at EC$2.70 to the US dollar since 1976, is 98% backed by foreign reserves — well above its legal requirement of 60%.
BANKING SECTOR TOUGHENS UP
The banking sector, too, is in better shape, with capital ratios improving, bank profitability increasing, and non-performing loans having fallen from an average of 18% to 11%.
“When I assumed office there were several troubled banks and financial stability was my top priority,” said Antoine. “We increased the staff in the bank supervision department from 20 to 30.
“The banking system is in better shape than it was three years ago, but risks remain — hence the rollout of our new risk-based supervisory framework”.
Governor Antoine has also made a big impression in backing of financial technology. He highlights that to really “bend the curve” on unemployment and further reduce poverty annual growth in Eastern Caribbean economies needs to be sustained around 5%; today average growth is 2%-2.5%.
“Our countries need to focus on growth and competitiveness and our responsibility is to maximise opportunities while minimising risks,” said
Antoine. “This means being on the lookout for ways to raise our growth trajectory, and I believe fintech has the potential to help us in that regard.”
In March, the ECCB signed an MOU with Barbados-based fintech company Bitt Inc to conduct a blockchain pilot focusing on data management, compliance and transaction monitoring for anti-money laundering that may help to combat the loss of correspondent banking relationships — a critical issue across the Caribbean.
“We want to explore whether and to what extent blockchain can help solve this existential threat to our financial sector,” said Antoine. “We are duty-bound so to do.”
Fintech could also be used to broaden financial inclusion, support trade and reduce the use of cash.
“There could be benefits for the economy, competitiveness, and security,” concluded the governor.