"
Address
by
Dr. DeLisle Worrell,
Governor, Central Bank of Barbados,
at the
Re-opening of CIBC FirstCaribbean’s Wildey Branch
In Praise of Foreign Banks
DeLisle Worrell
August 9, 2011
Barbados is fortunate to have banking system composed entirely of foreign banks:
The principle which undergirds our policy making is one of cooperation, based on a common understanding of the economic and financial circumstances the country faces. This approach has served us well in the past. For example, during the1991 balance of payments crisis short term foreign currency borrowings from commercial banks filled in the gap in the Central Bank’s Foreign exchange reserves during an interim period of several months while a programme of financial assistance from the IMF was under negotiation.
More recently, we have stepped up our collaboration with banks and other financial institutions, as well as with other financial regulators. Last year in October we held a one day conference of all financial institutions and financial regulators in Barbados, to discuss presentations on topics of immediate importance to the performance and resilience of the financial system. This is intended to be an annual event and we are planning for this year’s conference, to be held on November 3. At that meeting we will discuss the health of the financial sector, our common interests as financial institutions, regulators and citizens, and what policy changes may be helpful in charting the way forward. The conference supplements meetings that the Central Bank arranges with commercial banks as a group and one-on-one, quarterly and on an ad hoc basis.
The Central bank of Barbados is very conscious that policy is about creating the right incentives to guide the actions of corporations and individuals in directions which will add value to the economy, by virtue of their mutual transactions and with those with whom we do business abroad. The GDP is, after all, the sum of the value created by the actions of individuals and corporations. It is the job of the policy maker to provide incentives which guide decisions about economic transactions in directions which add value.
It is for this reason that we place so much emphasis on information and analysis, and in sending a clear message about our understanding of the economy and how it functions. This has to be an evolving process, because we live in a very dynamic world where established norms and practices become outmoded, and where we have no choice but to chart our course in uncertain waters. Just last Friday the lowest-risk securities in the world, those issued by the Government of the USA, no longer became the lowest risk securities in the world, at least in the view of one authority on these matters. The best way to deal with unavoidable uncertainty is through thorough discussion of all the information that can be had on the issue of interest, and that is the spirit in which the Central Bank interacts with the banking system.
We are pleased that FCIB continues to be a leading partner with us and other financial institutions in our collaborative management of our nation’s financial affairs, and we welcome the reopening of the Wildey branch of your bank as evidence that your parent’s long-established commitment to the Barbadian economy remains as strong as ever. We look forward to many more fruitful years of collaboration. I trust your bank will continue to prosper and be profitable, and that you will find irresistible incentives to deploy those profits right here in the Caribbean.
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