Central Bank of The Bahamas
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The Central Bank of The Bahamas is the
reserve bank A reserve bank is a public institution that manages a state's currency, money supply, and interest rates. Reserve Bank may also refer to: *Reserve Bank of Australia *Reserve Bank of Fiji *Reserve Bank of India *Reserve Bank of New Zealand *South A ...
of
The Bahamas The Bahamas (), known officially as The Commonwealth of The Bahamas, is a sovereign country within the of the in the . It takes up 97% of the Lucayan Archipelago's land area and is home to 88% of the archipelago's population. The consists ...
based in the capital
Nassau
Nassau
. The bank was established on 1 June 1974 but traces its origins to the currency board established in 1919. The bank carries out the independent monetary policy and supervision of the financial sector of The Bahamas.


History


Currency Board

In 1919, the British Government established the Board of Commissioners of Currency to issue local Bahamian currency pegged to the
pound sterling The pound sterling (symbol: £; ISO code: GBP), known in some contexts simply as the pound or sterling, is the official currency A currency, "in circulation", from la, currens, -entis, literally meaning "running" or "traversing" in the ...
. The Board helped promote the Bahamas' emergence as an international currency trading and banking center during the 1960s and 70s. By December 1967, there were 208 banks and trust companies in the Bahamas, up from only 37 in 1963. By 1974, there were 323. However, the legislative framework was inadequate to provide for the proper regulation and supervision of banking activities.


Monetary Authority

In 1968, the Bahamas Monetary Authority (BMA) was created in the board's place. The government also subsequently ended the Bahamian dollar's pegging to the pound and pegged it instead to the
US dollar The United States dollar (symbol A symbol is a mark, sign, or word that indicates, signifies, or is understood as representing an idea, Object (philosophy), object, or wikt:relationship, relationship. Symbols allow people to go beyond wha ...
. The Authority had an 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. This allowed banks to place their foreign reserves under the control of the BMA, effectively eliminating 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 authorized to serve as a lender of last resort to the commercial banks in the event of a financial emergency. The BMA was, however, short-lived and was replaced in 1974 by the Central Bank of The Bahamas.


Central Bank

The Central Bank was established on 1 June 1974 by ''The Central Bank of The Bahamas Act''. now superseded by the Central Bank of The Bahamas Act, 2000. The 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 bank management; * to advise the Minister of Finance, on request, on any financial or monetary matter. In addition, 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. The Bahamas is a member of the , allowing it to apply exchange control to capital account transactions, foreign equity investments, direct foreign investment, and other inward and outward flows of money.


Digital Currency

In October 2020, the central bank released its digital currency called the Sand dollar, the digital version of the Bahamian dollar.


Responsibilities

The responsibilities of the Central Bank are to foster an environment of monetary stability conducive to economic development and to ensure a stable and sound financial system. 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 2016. Previous Governors include: * Timothy Donaldson, 1974–1980 * William C. Allen, 1980–1987 * James H. Smith, 1987–1997 * Julian W. Francis, 1997–2005 * Wendy Craigg, Wendy M. Craigg, 2005–2015


Board of Directors

Current board members include: * John A Rolle, Governor of the Bank * Robert Adams * Thomas Dean * Russel Miller


See also

* Ministry of Finance (Bahamas) * Economy of the Bahamas * Bahamian dollar


References


External links


The Central Bank of The Bahamas
{{Authority control Central Bank of The Bahamas, Central banks, Bahamas 1974 establishments in the Bahamas Banks established in 1974 Banking in the Bahamas