On Jan. 28 Sir K. Dwight Venner, governor of the Eastern Caribbean Central Bank, presented the 2009 Eastern Caribbean Currency Union Economic Review in an address broadcast By 29 participating media houses in the region. Sir Dwight began By noting that the start of 2009 was marked By what could be called the most significant financial and economic disruption in the advanced economies since the Great Depression. In it, the United States suffered through a precipitous drop in growth and experienced increasing levels of unemployment. Major banks and other financial institutions either failed or were bailed out By the government, including the vital auto industry. The impact of the global financial downturn on the Eastern Caribbean Currency Union was primarily felt in the decline in the number of visitors and in overall tourism receipts. Foreign direct investment also fell because of the credit crunch, as well as remittances from Caribbean nationals living in advanced economies. According to Sir Dwight, the Eastern Caribbean Central Bank is estimating a contraction in the currency union of approximately 7.4 percent in 2009, mostly due to shortfalls in the tourism and construction sectors. More locally, the currency union had to deal with the collapse of the British American and CLICO insurance companies and a significant run on the Bank of Antigua. The latter crisis spawned a joint meeting of the OECS Authority and the ECCB Monetary Council By the Prime Ministers and Ministers of Finance on Jan. 15 and 16 in 2009 to craft a cogent response. The Council met again in July 2009 to review and follow up on decisions made in January. As a result of Monetary Council meetings, five indigenous banks collaborated in the successful rescue effort of the Bank of Antigua. In addition, a subcommittee of the Monetary Council was initiated to address the insurance-related issues. Other areas of concern involved initiatives By the G20 and OECD to impose new restrictions on offshore financial centres. This could have a negative impact on the level of foreign investment and possibly harm relations between the Currency Union and their major trading partners. A separate issue involves legislation on the regulation of the credit union sector to stability. Two Monetary Council subcommittees have been established to address those two areas of concern. Lastly, a task force established By the OECS Authority, working alongside the OECS Secretariat and member countries crafted a new treaty based on the original Treaty of Basseterre. The new treaty was signed By heads of governments at a formal ceremony on Dec. 29, 2009. The most critical lesson learnt By the financial crises of 2009 was the power of collective action, given that the Currency Union comprises a number of very small states with limited fiscal space and regulatory resources.
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