Prime Minister Hon. Dr. Kenny D. Anthony says he is concerned about the recent downgrading of the Caribbean Development Bank’s credit ratings from “Triple A” to “Aa1” by Moody’s Investment Service and Standard and Poors.
Some of the reasons for the downgrade included the heavy reliance in recent years on borrowing with bullet maturities and the bank’s non-compliance with its own liquidity policy for the last five years. As stated by Dr. Anthony in his address to the Forty Second Annual Meeting of the Board of Governors of the CDB.
“In the opinion of Moods, those shortcomings are inconsistent with the standards associated with “Triple A” rated banks and reflect deficiencies in the management of the Bank’s assets and liabilities and in its financial planning.”
Prime Minister Anthony advised that despite the Bank’s ability to service its debt in a timely manner, immediate steps must be taken to ensure that the CDB is elevated to the credit rating of “Triple A”, given the heavy reliance of the region on the financial and operational strength of the CDB and the important role the bank plays in development of member states. As such, Dr. Anthony recommended that the bank undertakes the following:
(1)The Bank must move quickly to create a dedicated risk management function;
(2)Adopt Comprehensive asset-liability management policies; and
(3)Carry out other necessary reforms to ensure that all its fundamentals get back on track and are sustained.
An urgent call was also made for the examination of all available strategies to address the CDB’s weak capital adequacy ratio, in an effort to stabilize the Bank and prevent further erosion in its credit rating, thereby reversing the current negative outlook.
Hon. Dr. Kenny D. Anthony assumed the Chairmanship of the Board of Governors of the Caribbean Development Bank on Thursday May 24, 2012.
Source: Office of the Prime Minister-4682111