Central Bank of The Bahamas

Central Bank of The Bahamas
Logo
Logo
Headquarters Nassau
Coordinates 25°04′35″N 77°20′37″W / 25.0765°N 77.3435°W / 25.0765; -77.3435Coordinates: 25°04′35″N 77°20′37″W / 25.0765°N 77.3435°W / 25.0765; -77.3435
Established 1 June 1974 (1974-06-01)
Ownership Government of the Bahamas
Governor John A Rolle
Central bank of The Bahamas
Currency Bahamian dollar
BSD (ISO 4217)
Preceded by Board of Commissioners of Currency (1919-58)
Bahamas Monetary Authority (1968-74)
Website www.centralbankbahamas.com


The Central Bank of the Bahamas is the central bank of the Bahamas. The bank is based in Nassau and was created in 1974, but traces its ancestry back to 1919. [1] The bank carries out the independent monetary policy and financial sector supervisory functions of the Bahamas.

History

The Central Bank traces its roots back to 1919, when the Board of Commissioners of Currency was set up by the British to issue local currency which was pegged to Pound Sterling. [1][2] This Board eventually helped promote the Bahamas' emergence as an international currency trading and banking center during the 1960s and 70s. By December of 1967, there were 208 banks and trust companies in the Bahamas, up from only 37 in 1963. [3] By 1974, this number was 323.

However, inadequate legislation to properly regulate and supervise banking activities posed a problem to the local government, which thought a more substantive institutional authority was required to oversee the rapidly expanding banking sector. [1] This, coupled with the 1967 devaluation of the Pound Sterling, which lost Bahamian banks millions of dollars, led to the demise of the Currency Board.

In 1968, the Bahamas Monetary Authority (BMA) was created in the Board's place. The government also subsequently terminated the fixed relationship of the Bahamian dollar, which was created in 1966, to Pound Sterling and pegged it to the US dollar. [4] This Monetary Authority had a much more expanded role in the financial system of the Bahamas. First, the BMA operated under a centralized system, under which it would buy and sell foreign exchange, allowing banks to place their foreign reserves under the control of the BMA, effectively eliminated their foreign exchange risk. Second, the BMA was authorized to purchase Bahamian government debt, marking the beginning of a discretionary monetary policy. Finally, the BMA was also authorized to serve as lender of last resort to the commercial banks in the event of a financial emergency. [5]

However, the BMA was short-lived and was eventually replaced by the Central Bank of the Bahamas on June 1, 1974 under The Central Bank of The Bahamas Act. [3] This new Bank's mandate included:

  • The power to promote and maintain monetary stability and credit and balance of payments conditions conducive to the orderly development of the Bahamian economy;
  • To promote and maintain adequate banking services and high standards of conduct and management therein;
  • To advise the Minister of Finance on any matter of a financial or monetary nature referred by him to the Bank for its advice

The Central Bank is the sole issuer of notes and coins; it acts as a banker and adviser to the Government and manages the Government's debt; it is also a banker and lender of last resort to the commercial banks. [3][6] The Bahamas is a member of the International Monetary Fund (IMF), allowing it to apply exchange control to capital account transactions, foreign equity investments, direct foreign investment, and other inward and outward flows of money.

Responsibilities

The responsibly of the Bank is to foster an environment of monetary stability conducive to economic development, and to ensure a stable and sound financial system. [7] It achieves this goal by:

  • Performing the traditional roles of issuing legal tender.
  • Maintaining external value of the Bahamian dollar.
  • Promoting monetary stability and a sound financial structure.
  • Acting as a banker and advisor to the government.
  • Compiling financial statistics.

Leadership

Governors

The current Governor of the Central Bank is John A Rolle, who has held the position since January if 2016. [8]

Former Governors include: [9]

  • Mrs. Wendy M. Craigg (2005 - 2015)
  • Mr. Julian W. Francis (1997 - 2005)
  • Mr. James H. Smith (1987 - 1997)
  • Sir William C. Allen (1980 - 1987)
  • Mr. Timothy Donaldson (1974 - 1980)

Board of Directors

The Board of Director is vested with the responsibility for the policy and general administration of the Bank. Current board members include: [10]

  • John A Rolle, Governor of the Bank
  • Robert Adams
  • Thomas Dean
  • Edgar Moxey

See also

References

  1. 1 2 3 "About Us: History". Central Bank of the Bahamas. Central Bank of the Bahamas. Retrieved October 8, 2018.
  2. ↑ Rabushka, Alvin (2010). History of the Monetary Systems and Public Finances in The Bahamas, 1946-2003 (PDF). The Nassau Institute. p. 10. ISBN 978-976-8170-96-5.
  3. 1 2 3 Francis, Carlene Y. (1981). "Central Banking in The Bahamas". International Journal of Bahamian Studies. 2 (1): 31–44. Retrieved October 8, 2018.
  4. ↑ Rabushka, Alvin (2010). History of the Monetary Systems and Public Finances in The Bahamas, 1946-2003 (PDF). The Nassau Institute. p. 24. ISBN 978-976-8170-96-5.
  5. ↑ Rabushka, Alvin (2010). History of the Monetary Systems and Public Finances in The Bahamas, 1946-2003 (PDF). The Nassau Institute. p. 25-26. ISBN 978-976-8170-96-5.
  6. ↑ Rabushka, Alvin (2010). History of the Monetary Systems and Public Finances in The Bahamas, 1946-2003 (PDF). The Nassau Institute. p. 34. ISBN 978-976-8170-96-5.
  7. ↑ "Central Bank of The Bahamas". Government of The Bahamas. Government of The Bahamas. Retrieved October 8, 2018.
  8. ↑ "About Us: Senior Officials". The Central Bank of The Bahamas. The Central Bank of The Bahamas. Retrieved October 8, 2018.
  9. ↑ "FAQs: The Central Bank". The Central Bank of The Bahamas. The Central Bank of The Bahamas. Retrieved October 8, 2018.
  10. ↑ "About Us: The Board". The Central Bank of The Bahamas. The Central Bank of The Bahamas. Retrieved October 8, 2018.
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