Message from the Governor General I Extend Best Wishes to the the Bank’S History

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2 June 10, 2014 Central Bank of The Bahamas Message from the Governor General I extend best wishes to the the bank’s history. I applaud the ments, I implore you to continue Central Bank of The Bahamas as Central Bank for its willingness to to diligently pursue your man- this important national institution enlighten the community on the date of fostering an environment celebrates its 40th anniversary. work of this institution which has of monetary stability conducive The Bank is charged with moni- certainly been a great contributor to economic development, and toring and regulating the coun- to the development of our coun- to ensuring a stable and sound try’s ﬁnancial institutions, which try. ﬁnancial system in the Bahamas. is an arduous task that began on I acknowledge the outstanding I extend best wishes to the June 1st, 1974, and has progressed service of the loyal and dedicated Central Bank of The Bahamas and steadfastly until today. employees of the Central Bank gratitude on behalf of the Baha- This milestone deserves to be and thank them for their com- mian people. commemorated and an Anniver- mitment and contribution to this sary Booklet produced to docu- institution and The Bahamas. Sir Arthur Foulkes ment and heighten awareness of As you celebrate your achieve- Governor-General

Message from the Prime Minister, Commonwealth of The Bahamas I offer my congratulations to given the enabling conditions in Bank. This speaks well for the sta- the Governor and Board of the 1974 on its establishment. In the bility of the institution and for its Central Bank of The Bahamas on forty years since its establishment, leadership. The Central Bank has the occasion of the 40th Anniver- I can assert in my capacity as Min- more than adhered to and fulflled sary celebrations of the establish- ister of Finance, that together with its mandate as provided for in the ment of the Central Bank of The my predecessors in this portfolio, Act and in its founding principles Bahamas. I do so on behalf of the I have been the benefciary of the and has justifed the confdence Government of The Bahamas and advice of the Central Bank in the that was reposed in the Bank at its in my capacity as Prime Minister coordination and balancing of the establishment. and Minister of Finance. nation’s overall economic strategy. As a nation, we have just com- The Central Bank of The The Central Bank of The Baha- pleted our 40th Anniversary of Bahamas is one of several core mas has also played a notewor- Independence and we are moving institutions that are closely iden- thy role in terms of safeguarding to celebrate another anniversary tifed with the Independence of the integrity of the fnancial and on 10th July, 2014. The success of The Bahamas as it symbolizes the banking sector of our economy our independence of which we sovereignty of The Bahamas over which is such a vital part of our are justly proud has come about its monetary policy and related overall economic thrust. Through through the workings of institu- issues. It is a tautology that Inde- its banking supervision role and tions such as the Central Bank pendence meant having control oversight, it has been able to of The Bahamas which gives our over the essential organs of the ensure that The Bahamas remains independence credibility and state. In this sense, the estab- a safe and credible banking centre practical meaning. lishment of the Central Bank of and that the banking system could Once again, I offer my congrat- The Bahamas was a clear marker withstand all scrutiny. ulations and wish the Bank and all to all that despite our size, The In its fortieth year, the Bank those associated with it my best Bahamas was in full control of its can lay claim to the fact that it has wishes on this your 40th Anniver- monetary policy through the Cen- been led by fve capable Bahamian sary. tral Bank and of its fscal policy Governors. They have been sup- through the Ministry of Finance. ported by adroit professionals and Perry G. Christie This was no small achievement support staff at all levels of the Prime Minister 40th Anniversary 1974 -2014 June 10, 2014 3 Message from The Honourable Michael Halkitis, M.P., Minister of State for Finance on June 1st, 1974 to carry out the and maintain monetary stability issuer of legal tender, banker to both independent monetary policy and and credit and balance of payments domestic banks and the government, fnancial sector supervisory functions conditions conducive to the orderly and regulator and supervisor of the entrusted upon The Bahamas after development of the economy; to banking sector. The Bank’s overall Independence in 1973. Prior to the promote and maintain an adequate policy objective is the promotion establishment of the Bank, there was banking system and high standards of a stable economic environment the Currency Board which was set up of conduct and management therein; conducive to high levels of domes- in 1919 mainly to issue currency. The and to advise the Minister of Finance tic production, employment, and Currency Board era spanned the early on any matter of a fnancial or mon- growth. This being said, I would also evolution of The Bahamas’ emer- etary nature. Additionally, one of the like to thank past Governors, the late gence as an international banking Bank’s major objectives is to safe- Mr. T. Baswell Donaldson, Sir William centre during the 1960s. In 1968, the guard the external value of the Baha- C. Allen, Mr. James H. Smith, and Mr. Bahamas Monetary Authority (BMA) mian dollar, which is fxed at a 1:1 Julian Francis and staff of the Central was established which assumed the parity with the United States dollar. Bank. I am pleased to extend congrat- aggregate foreign exchange risks of Over the past 40 years, the Bank So as you celebrate this mile- ulatory remarks and best wishes to the country. has signifcantly influenced the stone, I extend sincere congratula- The Central Bank of the Bahamas in The Central Bank of The Bahamas development of the country and for tions to the Governor, Mrs. Wendy celebrating 40 years of existence in Act, 1974, was superseded by the Cen- this I extend to you sincere apprecia- Craigg, Deputy Governor, Mr. Michael The Bahamas. tral Bank of The Bahamas Act, 2000. tion for your valuable contributions. Lightbourne and the entire staff of the The Central Bank was established It is the duty of the Bank to promote The Bank flls the traditional roles of Central Bank of The Bahamas. Greetings from the Governor Over these forty years, we have as we sought to meet the challenges development and strength, and of built confdence and credibility and opportunities presented along the current staff, who, through their upon four very important pillars of the way. In keeping with the evolving professionalism, hard work and responsibility. Firstly, as it relates to business focus, we have overhauled commitment, are continuing in the monetary policy, the Bank, since its our legislative and supervisory frame- tradition of excellence. Then, there inception, has sought to implement works, becoming more risk-based in are the numerous public and private appropriate policy measures to main- our approach; leveraged greater use stakeholders who continue to support tain the fxed exchange rate regime of technology in making our business us in our mandate, and to whom we and support the overall development processes more effcient; incorpo- also express our immense gratitude. of the Bahamian economy. Secondly, rated both strategic and succession As the Central Bank, we should be in terms of fnancial regulation and planning in our long-term develop- proud of our achievements, but there supervision, we continue to promote ment, and expanded our economic is the road ahead of us. As is often fnancial stability through balanced, analytical capabilities. the case, the achievement of past There are, around us, constant relevant and consistent oversight of By virtue of the Bank’s overarch- objectives, pavesw the way to new reminders of the important role played the fnancial sector. Thirdly, through ing mandate, we have and will con- challenges and opportunities, which by central banks in pursuing policies our oversight mechanisms, we assure tinue to play a central role in provid- require a level of agility, flexibility and aimed at achieving fnancial sector stable and effcient payments sys- ing guidance and leadership in many readiness—if we are to realize contin- stability and supporting the overarch- tems, which support confdence in fnancial sector initiatives, while ued success. ing economic growth objective. fnancial transactions. Finally, our also serving as a reservoir of exper- On this Ruby anniversary, we This year marks the 40th Anni- collection, analysis and publication of tise and information, which can be should all be proud of our achieve- versary of the Central Bank of The reliable monetary, fnancial and real drawn upon by the government and ments, and commit ourselves to Bahamas, and presents another sector statistics, empower the public non-governmental institutions—both providing the level of commitment opportunity for us to reflect upon our in their decision making processes. domestic and foreign. and focus that, moving forward, will rich legacy of transformation, assim- During the past four decades, Having the right resources is a redound to the success of this distin- ilation and adaptation, in the diligent we have also grown, in both the size very important part of our success. guished institution. execution of our mandate—one that and complexity of our operations, In this regard, I wish to acknowledge is closely intertwined with the evolu- and have transformed our organiza- the contribution of the many former Wendy Craigg tion of the Bahamian economy. tional structure and management, employees to the Bank’s institutional Governor 4 June 10, 2014 Central Bank of The Bahamas Our Former Leaders Deputy Governors Governor

Mr. T. B. Donaldson, CBE Sir William C. Allen, KCMG Mr. James H. Smith, CBE Mr. Julian W. Francis, CBE Mr. Hubert L. Dean A.B.I.B., Controller of Exchange, Senior Assistant, BMA, Governor (1987-1997) Deputy Governor (1993- F.I.B. 1968 1970 1997) Senir Assistant to the Chairman Manager, BMA, 1968 Research Manager, 1972 Governor (1997-2005) of BMA, 1968 Chairman, BMA, 1972 Deputy Governor (1974-80) Banking Manager (1973-1980) Governor (1974-1980) Governor June (1980-87) Deputy Governor (1981-1996) Past Board Members

Sir Gerald Cash* 1974 – 1976 Mr. Thomas Evans 1983 – 1992 Mr. Julian Francis 1993 – 2005 Mr. Basil J. Sands 1974 – 1977 Mr. James H. Smith 1987 – 1997 (Governor & Chairman) Mr. T. B. Donaldson* 1974 – 1980 (Governor & Chairman) Mrs. Orry Sands 1994 - 2000 Mr. Anthony Thompson 1974 – 1978 Mrs. Patricia Coakley 1988 – 1992 Mrs. Ruth Millar 1994 - 2000 Mr. Reginald Wood 1975 – 1979 Mr. Jeffrey M. Thompson* 1988 – 1992 Mr. Michael Cartwright 1997 – 2000 Mr. Allan Benjamin 1977 – 1978 Rev. Dr. Charles W. Saunders 1988 – 1992 Mr. Gregory Cleare 1998 – 2000, Mr. Moses A. Hall* 1979 – 1981 Mr. Warren L. Rolle 1990 – 1993, 2007 – 2009 Mr. William C. Allen 1980 – 1987 2006 -2007 Mr. Carleton W. Williams 2001 – 2007 (Governor & Chairman) Mr. V. Vanderpool-Wallace 1992 – 1993, Dr. Pandora Johnson 2001 – 2005 Mr. A. T. Peet 1980 – 1987 2007 – 2008 Mr. Lennox McCartney 2008 – 2009 Mr. L. Ferguson* 1980 – 1987 Mr. G. Clifford Culmer 1992 – 1997 Dr. Duane Sands 2008 – 2010 Mrs. E. C. Isaacs 1980 – 1990 Mr. A. Leonard Archer 1992 – 1993 Mr. Colin Callender 2009 – 2012 Mr. Hubert L. Dean 1981 – 1990 Mr. Peter Graham 1992 – 1999 Mr. Wayne J. Aranha 2009 – 2012 (Deputy Governor) Mr. Luther Smith 1993 – 1994 Mr. Philip Stubbs 2009 – 2012 Mr. Robert Lightbourne 1983 – 1987 Mr. David Hudson 1993 – 1996 Dr. Ronald Knowles 2010 - 2012 *Deceased Highlights of Institutional Developments in Central Banking in The Bahamas, 1974-2014 Although the Central Bank of against the pound sterling, at par. key developments exposed the 600 by 1965. The Bank Act of 1909 The Bahamas was established on The issuance of domestic currency weaknesses of the Currency Board proved to be woefully inadequate, 1st June, 1974, its historical origin was constrained by the require- arrangement to deal with changes as it made no provision for an dates as far back as 1919, with the ment that each issue be backed taking place within the Bahamian institution to have a special licence formation of the Currency Board or by foreign currency. The Currency economy. First came the chal- to conduct banking business in Commissioners of Currency, simi- Board did not have the power to lenge presented by The Bahamas’ The Bahamas, and hence there lar to other British colonies of the formulate or conduct monetary emergence as a leading euro dollar was a lack of supervisory over- time. Commencing operations in policy, nor to act as the lender of jurisdiction, which was accompa- sight of these activities. To secure 1921, the Currency Board’s primary last resort and supervise the bank- nied by the rapid proliferation of the reputation of The Bahamas responsibility was the issuance ing sector. banks or institutions purporting to as a credible offshore centre, the and redemption of local currency During the sixties, two (2) be banks—numbering more than authorities enacted the Banks 40th Anniversary 1974 -2014 June 10, 2014 5 and Trust Companies Act, in 1965, of reserve requirements for clear- domestic banks, setting reserve confrmed that there were no which introduced more stringent ing banks, supervision of banks requirements for banks and regu- apparent threats to domestic requirements for institutions to and the operation of the newly lating and supervising all activities fnancial stability. Building on the operate as banking and trust enti- formed check clearing system. in the banking sector. foundation of the FSAP exercise, in ties in The Bahamas and caused a However, the BMA did not have Since then, the Bank has 2013, the Bank, with input from the reduction in the number of such the authority to conduct the mon- evolved in the context of the Insurance Commission and Securi- entities operating within and from etary policy necessary to address changing demands of both the ties Commission, published its frst The Bahamas to some 90 by 1967. balance of payment imbalances, domestic and international land- semi-annual Financial Stability However, there was the need for an as was created by the conversion scapes. These have precipitated Report (FSR) in December 2013. institutional authority that could of sterling assets to Bahamian numerous changes in the legisla- In its 40-year existence, the provide the requisite supervisory dollar assets. This defciency in its tive framework, dealing with both Central Bank has had fve (5) Gov- and regulatory oversight of the rap- mandate became more evident, its core central banking activities, ernors at the helm. The late Mr. T. idly expanding banking sector. when it was powerless to act when and affording it greater operational Baswell Donaldson was appointed Another development which fnancial stability was threatened, autonomy, and those that focussed as the frst Governor and Chairman had a marked impact on the his- amid the strong growth momen- on enhancing the resiliency of the of the Board, on June 1, 1974, hav- tory of central banking in The tum in the global economy, which domestic banking system, through ing previously served as Manager Bahamas, and led to the demise led to appreciable gains in tourism the effective application of interna- and Chairman of The Bahamas of the Currency Board, was the activity and private sector credit, tional regulatory and supervisory Monetary Authority. Mr. Donald- devaluation of the British pound alongside excessive consumer standards. son’s term ended in 1980, when he in November 1967. The conse- price inflation. As a result, the In 2012, the Bank partici- was succeeded by Mr. William C. quential conversion of the banking BMA was replaced by the Central pated in its frst Financial Stabil- Allen, the frst Deputy Governor of system’s previously held sterling Bank of The Bahamas, through the ity Assessment Program (FSAP), the Bank. Next came the appoint- balances into Bahamian currency, Central Bank of The Bahamas Act, conducted by the International ment of Mr. James H. Smith, in resulted in signifcant foreign 1974—representing the third and Monetary Fund (IMF). The exer- 1987, and, when his tenure ended exchange losses for the sector, and latest stage of central banking in cise involved the assessment of in 1997, he was succeeded by Mr. then triggered a major expansion The Bahamas. the country’s regulatory frame- Julian W. Francis, who served as in domestic consumption, hikes The Central Bank was equipped work and practices, its compliance Deputy Governor from 1993. Mr. in prices and highly speculative with all of the traditional instru- with international best practices, Francis’ tenure ended in 2005, real estate transactions. Faced with ments and powers, which include: inter-linkages within the fnancial when the present Governor Mrs. the increasing trade links with issuing legal tender, promoting system, as well as the system’s abil- Wendy Craigg, the frst female to the United States, the Bahamian monetary stability and a sound ity to withstand “stress” or shocks, hold this post, began her term, authorities were pressed to estab- fnancial structure, maintaining both internally and externally. The after serving as Deputy Governor lish an independent exchange rate external reserves, administering results of the assessment attested since 1997. policy. As a result, the fxed parity the country’s exchange control to the strength of the Bank’s legal of the Bahamian dollar and Pound regulations, acting as banker to and regulatory framework, and Sterling, established under the Currency Act of 1965, was ended, and a fxed parity was established with the US dollar. These two developments reinforced the need for an institutional arrangement that would mitigate exchange risks arising from capital inflows, regulate the money supply, supervise the banking system, and that would generally foster fnancial conditions conducive to the orderly and balanced development of the economy. As an interim step, the Baha- mas Monetary Authority (BMA) was established in October 1968, marking the second stage in the history of central banking in The Bahamas. The BMA’s powers included: the issuance of currency, management of the external reserves, banker to the Govern- ment and banks, establishment 6 June 10, 2014 Central Bank of The Bahamas Tribute to Former Governor, the Late T.B. Donaldson Bank, he had the unique experi- and nurture many young men and ing international environment—an ence of guiding the institutional women. Bank employees, who observation that remains relevant transitioning to the monetary would have had the opportunity to today. Indeed, his foresight in arrangements that characterize work closely with him during the establishing, in 1974, The Baha- central banking, as we know it early years, continue to speak highly mas Institute of Bankers, now The today. He was influential in earlier of these endearing characteristics, Bahamas Institute of Financial discussions on the determination which shaped their career progres- Services, serves as a clear example of the exchange rate arrangements sion at the Bank and also in several of his commitment to this ideal. for The Bahamas, and the meas- leadership positions throughout the Not many persons would be ures taken to promote The Baha- fnancial services sector. aware that the logo of the Bank, mas as an international fnancial This emphasis on the impor- the sand dollar, was selected by Mr. Prior to being appointed the centre. His penchant for excellence tance of developing human Donaldson. Apart from wanting frst Governor and Chairman of the is etched into the culture of the resources was reinforced in one of something that was Bahamian, he Board of the Central Bank of The Bank, as he always challenged staff Mr. Donaldson’s earlier addresses was intrigued by the elegance and Bahamas in June, 1974, the late to deliver service comparable with to the Chamber of Commerce, in history of such a unique specimen Governor T.B. Donaldson initially the status of an institution that is 1978, on the role of private enter- of marine life—whose markings on served as Manager and Chairman positioned at the apex of the fnan- prise in the economies of Carib- the shell were said to represent the of the Bahamas Monetary Author- cial system. bean countries. He spoke of the birth, crucifxion and resurrection ity (BMA). By all accounts, he was a very need for the private enterprise to of Christ. Mr. Donaldson, who held the charismatic, caring and inspira- encourage and foster a capacity for Mr. Donaldson’s life’s work will position of Governor until 1980, tional leader. A great proponent learning, so that we have a society live on through the many lives was a trailblazer in many respects. of the transformational power of which can respond skillfully, intel- he has mentored, nurtured and As the frst Governor of the Central learning, he took time to mentor ligently and rapidly to the chang- inspired on the road to success.

as signifcant transfers can quickly drain reserves and place pressure Monetary Policy in The Bahamas: on the exchange rate, while floating rate economies have either no A 40-Year Perspective or very limited controls in place. The combination of a fxed Introduction How Monetary Policy Works as The Bahamas, which employ exchange rate regime and restric- Monetary policy refers to the To maintain the fxed parity between fxed exchange rates, need to hold tions on the movement of capital, deliberate initiatives pursued by the the Bahamian and United States signifcant levels of foreign reserves allows the Central Bank some scope Central Bank to control the money Dollars, the Central Bank pursues a to, inter alia, pay for overseas goods for pursuing an independent mon- supply and credit conditions for the series of policy measures with the and service external debt, while etary policy. As Chart 1 shows, what purpose of achieving certain broad ultimate objective of influencing the also keeping adequate balances this means is that, if the Central economic objectives. The funda- demand for credit which, because of to facilitate unexpected demands. Bank were to move to lower domes- mental objective of monetary policy The Bahamas’ need to import goods If the Bank did not hold suffcient tic interest rates, in a bid to stimu- in The Bahamas has always been and services, affects the public’s reserves, then any excess demand late the economy, capital could not to maintain stable credit and other demand for foreign currency. for foreign currency would lead to a leave the country to seek a better fnancial sector conditions, in order To understand why the Bank depreciation of the exchange rate. return, because of the controls. If to support the fxed parity between occasionally adjusts monetary In contrast, floating rate economies capital was mobile, as in the case of The Bahamian and United States policy, it is important to differenti- do not need to hold high levels a country with a fxed exchange rate dollars that has prevailed since ate between the types of exchange of external reserves because any regime and an open capital account 1973, while simultaneously promot- rate regimes which exist globally. adjustment between the demand or a floating exchange rate arrange- ing the economic growth objective Typically, countries have one of two and supply of foreign currency is ment, then there would be either a (i.e., high levels of domestic pro- types of regimes (although there are made through the movement in the rapid depletion of external reserves duction and employment). As part variations of these), namely fxed, exchange rate. or alternatively a decision to adjust of the external balance require- where the value of the domestic Another distinction between the exchange rate. To prevent this ments, the Central Bank was given currency is tied to either another fxed and floating exchange rate from occurring, some countries a statutory mandate to ensure that international or a basket of cur- economies is seen in their capital make interest rate and other policy external reserves are maintained at rencies, and floating, where the accounts. In general, countries adjustments which mimic those 50% of the value of total notes and exchange rate is allowed to vary on with fxed exchange rates tend to implemented in other larger econ- coins and demand liabilities of the a daily basis against other interna- impose restrictions on the move- omies. As a result, their monetary Central Bank. tional currencies. Countries such ment of funds or “capital” overseas, continued on page 17 40th Anniversary 1974 -2014 June 10, 2014 7 The Central Bank of The Bahamas’ Legislative Framework The Central Bank of The Baha- Banks Act, 1905 and the Banks and of exchange controls, the issuance the provisions of the 1974 Act and mas was established by an Act of Trust Companies Regulation Act, of Government paper, anti-money added several key provisions to Parliament, namely, the Central 1965. laundering and anti-terrorism address criticisms leveled by the Bank of The Bahamas Act, 1974 Other important pieces of fnancing, deposit insurance and aforementioned international agen- (the 1974 Act) which, inter alia, the legislative framework which the payments system. cies. The new Act established a defned the role of the Central outline additional functions and Bank as being to: duties of the Central Bank are Central Bank of the Bahamas Act, 2000 (CBBA) • promote and maintain mon- those relating to the administration continued on page 8 etary stability and credit and The CBBA 2000 retained most of balance of payments conditions conducive to the orderly devel- A Chronology of Currency Developments in The Bahamas opment of the economy; • promote and maintain an Years Major Developments adequate banking system and 1707 British Parliament sanctions the exchange of British coins for foreign coins in The Bahamas. high standards of conduct and 1888 First local paper currency notes are issued by Bank of Nassau. management therein; and • advise the Minister of Finance 1917 Local paper currency notes are taken out of active circulation. on any matter of a fnancial or 1919 Decision is taken to recommence issuance of local currency notes, under the Currency Act, 1919. monetary nature. 1965 Bahamian Pound is decimalised into the Bahamian Dollar, by the Currency Act of 1965. Additionally, the 1974 Act pro- 1966 Bahamian Dollar is introduced and pegged to the Pound Sterling (B$1=7 shillings). Bahamian bank- vided for the Central Bank to be the notes are issued in denominations of $½, $1, $3, $5, $10, $20, $50 and $100. Coins are issued in sole issuer of bank notes and coins denominations of 1¢, 5¢, 10¢, 15¢, 25¢, 50¢, $1, $2, $5 and $10. (legal tender), manager of the country’s external reserves, banker 1968 First banknotes issued under the Bahamas Monetary Authority (BMA). to domestic banks (lender of last 1971 Bahamian Dollar is devalued (from B$2.40 = £1 to B$2.5275 = £1) and direct link with the Pound resort for short-term liquidity sterling is permanently severed. requirements) and the government 1972 Value of Bahamian dollar is fixed against the United States Dollar at B$0.97=US$1. (provision of short-term advances, and banking and public debt reg- 1973 Devaluation of Bahamian Dollar to B$1 = US$1. istry services), and regulator and Issuance of 50¢, $1, $2, $5 and $10 coins ceases. supervisor of the banking sector. 1974 First banknote issued under the Central Bank of The Bahamas Act. In December, 2000, the 1974 1984 New family of banknotes introduced, with enhanced colour, design and security features. Act was repealed and replaced 1988 The colours of the $100 banknote are changed from violet and purple to blue, violet and carmine, with by a new Central Bank of The silver highlights on the back. Bahamas Act (the CBBA) as part of a package of eleven (11) pieces 1992 Special quincentennial $1 banknote is issued to commemorate the landfall of Christopher Columbus in of new and amending fnancial The Bahamas. legislation, which represented The 1993 First denomination of banknotes depicting national heroes is introduced; the $20 banknote bears the Bahamas’ response to the report portrait of Sir Milo B. Butler. of the Organization for Economic 1995 New $5 banknote is issued, bearing the portrait of Sir Cecil Wallace-Whitfield. Cooperation and Development (OECD) entitled “Towards Global 1996 New portrait of Her Majesty Queen Elizabeth II is placed on the $1, $10 and $50 banknotes. Tax Co-operation” which des- 2000 New $10 and $50 banknotes are issued, bearing portraits of Sir Stafford Sands and Sir Roland Symon- ignated The Bahamas as a “tax ette, respectively haven” and in response to the oft- 2001 The $1 banknote is redesigned, bearing the portrait of Sir Lynden O. Pindling. cited Financial Action Task Force’s 2005 Newly designed $10 banknote is introduced into circulation—the first in its family of Counterfeit Resist- (FATF) June2000, “blacklisting” of ant Integrated Security Product (CRISP). The Bahamas as a non-cooperative jurisdiction in the fght against 2006 Newly designed CRISP $20 and $50 banknotes are introduced into circulation. money laundering—charges which 2007 Newly designed CRISP $5 banknote and 10¢ coin are introduced into circulation. The Bahamas vigorously rejected. 2008 Newly designed CRISP $1 banknote is introduced into circulation. The package of legislation also included a new Banks and Trust 2009 Newly designed CRISP $100 banknote is introduced into circulation. Companies Regulation Act, 2000, 2016 Scheduled launch of the newly designed family of banknotes (CRISP 2). which repealed and replaced the 8 June 10, 2014 Central Bank of The Bahamas

Legislative Framework continued accounts in the Gazette; empower regulations to prescribe applica- and effcient national payments from page 7 the Governor to call for special tion requirements and generally system. Other amendments framework for international co-op- returns from a bank or for to call for carrying the purposes of the Act removed the prohibition against eration. Under the new framework, for such further information as the into effect. Central Bank Directors holding the Bank may assist and co-operate Governor may reasonably require; Since 2000, the CBBA and the shares in licensees of the Bank, with overseas regulatory author- and prohibit a person from disclos- BTCRA have undergone several to permit them to hold a max- ities, and is empowered to direct ing any information relating to the amendments designed to meet the imum of less than 1% of the persons to produce information affairs of a bank that was acquired ever-changing requirements of the ordinary paid up share capital which the Bank requires to carry in the performance of that person’s domestic fnancial services sector of any fnancial institution, trust out its functions or which is nec- functions under the Act. Among and international standard setting company or money transmis- essary to facilitate overseas regula- the key provisions in the Banks and bodies and to ensure, the optimal sion business regulated by the tory authorities’ requests, without Trust Companies Regulation Act, effectiveness of the legislation. Central Bank. having to obtain a court order. 1965 which were re-enacted in the 2006: Amendments to the BTCRA Additionally, the duty of confden- BTCRA 2000 are those: requiring Amendments established the enhanced provisions relating tiality imposed on the Bank’s direc- banks and/or trust companies to framework for the introduction to the appointment, powers tors, offcers and employees, under be licensed; establishing the Offce and regulation of private trust and duties of licensees’ audi- the 1974 Act has been extended by of the Inspector of Banks and Trust companies and facilitated the tors; indemnifed and protected the CBBA to the Bank’s agents and Companies (the Inspector) and introduction of the Banks and the Bank’s directors, offcers, advisors, and the list of exceptions setting out the Inspector’s powers Trust Companies (Private Trust employees, agents and persons to the Bank’s duty of confdentiality and duties and the powers of the Companies) Regulations, 2007. authorized by the Bank or the has also been expanded. Governor. 2007: Inspector to perform certain In keeping with evolving inter- New provisions for enhanced Amendments permitted the functions, from civil or crim- national trends in central banking co-operation between the Cen- Central Bank to co-operate inal liability in the good faith and fnancial sector supervision, tral Bank and overseas regulatory with and share information performance of their functions; the enactment of the CBBA gave the authorities, particularly in relation with other domestic regulatory empowered the Central Bank to Central Bank more autonomy and to cross-border supervision of authorities, to assist them in appoint a receiver -manager for independence from the political banks, paralleled those inserted carrying out their functions or the temporary management of directorate. Specifcally, under the into the CBBA 2000. However, the as part of consolidated supervi- a licensee; increased the time CBBA, the Financial Secretary is no BTCRA 2000 included a number of sion, oversight or regulation of period for commencing sum- longer an ex offcio member of the unique provisions which improved the fnancial services sector. mary proceedings for an offence Central Bank’s Board of Directors the Central Bank’s regulatory over- 2008: committed under the Act, and the Bank is no longer required sight, such as those that expanded Amendments brought stand- empowered the Bank to impose to obtain the prior approval of the the licensing criteria for banks and alone, non-bank money trans- fnes for offences against regu- Minister to assign an annual salary trust companies and required the mission businesses under the lation 8 of the Financial Intelli- to a post, where that salary exceeds Governor of the Central Bank to regulation of the Central Bank gence (Transactions Reporting) a specifed amount or to appoint consider certain specifc factors and facilitated the introduction Regulations, 2000 and the Finan- a person to such a post. Areas of before granting a licence, author- of the Banks and Trust Com- cial Transaction (Wire Transfer) disqualifcation for appointment as ized the Inspector to conduct panies (Money Transmission Regulations, 2008 and vested cer- a Director of the Central Bank were on-site examinations to ensure Business) Regulations, 2008. tain powers previously reserved expanded by the CBBA to include compliance with the provisions of Amendments to the CBBA also for the Governor in the Central persons adjudged or otherwise the BTCRA 2000 and the Financial altered the composition of the Bank. declared bankrupt under any law Transactions Reporting Act, 2000; Central Bank’s Board so that in force in The Bahamas and any to call for the assistance of a licen- Other Enabling Legislation Deputy Governors no longer person convicted by a court of an see’s auditor and to report suspi- In addition to the key governing serve as directors of the Bank indictable offence or other offence cious transactions to the Financial legislation, the Central Bank, in the and consequently do not have involving dishonesty. Intelligence Unit. Importantly, the execution of its day to day functions the right to vote at Board Meet- BTCRA 2000 also enhanced the and duties, is guided by several ings. A Deputy Governor who Banks and Trust Companies Governor’s role by granting more other important legislation—key acts as the chairperson of a Regulation Act, 2000 (BTCRA 2000) autonomy and independence among which are the following: Board Meeting, in the absence The BTCRA 2000 re-enacted most of and vesting many functions and • Exchange Control Regulations of the Governor, has the right to the provisions of the repealed Banks powers previously reserved for the Act (as amended): One of the vote however. Act, 1909 and Banks and Trust Com- Minister of Finance by the Existing Bank’s functions is to manage the panies Regulation Act, 1965—which Law Amendment Order of 1974, in 2010: external reserves of the jurisdic- together provided for the regula- the Governor. Among these were Amendments to the CBBA tion. Under the exchange control tion of banks and trust companies the ability of the Governor, without expanded the Bank’s functions regime, the acquisition of foreign in The Bahamas. Provisions in the reference to the Minister, to grant a to include the requirement for currency by residents, and for- Banks Act 1909, which are included bank and or trust company licence, the Bank to ensure the stability eign currency investments in the in the BTCRA 2000, require banks to to approve the issue and transfer of the fnancial system and to domestic economy by non-resi- publish annual statements of their of a licensee’s shares and to make promote and ensure a sound 40th Anniversary 1974 -2014 June 10, 2014 9

dents, must be approved by the This means among other things, in the payments system, pro- reporting system in The Bahamas, Central Bank. The Central Bank that all purchases and transfers vides for cheques to be cleared which will be regulated by the Cen- has delegated to the commercial of such stock must be registered electronically using approved tral Bank. banks the authority to approve with the Central Bank; cheque images and for the Similarly, the Central Bank has certain types of applications for • the Financial Transactions creation of a National Payments identifed a number of amend- foreign exchange, in an effort to Reporting Act, the Financial Committee as an advisory Body ments for the BTCRA, which the liberalize aspects of the exchange Transactions Reporting Regu- to the Central Bank. Bank anticipates will be enacted in control regime and gain opera- lations, the Proceeds of Crime the course of 2014. These include Prospective Legislative tional effciencies. This regime Act and the Anti-terrorism Act, clarifcation of the requirement for Developments is governed by the Exchange which provide the standards to the formation of a corporate entity As the Central Bank marks its 40th Control Regulations Act, 1952 which all fnancial institutions for licensing purposes; enhanced anniversary, it continually seeks to (the ECRA) and the Exchange (including those regulated by ft and proper requirements for identify opportunities to provide Control Regulations, 1956. The the Central Bank) must adhere controllers, directors and offcers clear legal directives and improve ECRA was amended in 1974 to in order to prevent or reduce the of licensees; introduction of the its operational effectiveness. In this designate the Central Bank as the risk of their operations being requirement for licensees to report vein, the Central Bank has under- Controller of the Exchange and used for money laundering or to the Central Bank, instances taken a comprehensive review of to authorize the Central Bank terrorist fnancing; where they have information both the CBBA and the BTCRA for to make orders or to give such • the Protection of Depositors Act, which may negatively impact the directions as may be necessary the purpose of modernizing and ftness and propriety of a direc- which sets out the framework for enhancing their provisions, where to implement what the ECRA the Deposit Insurance Corpora- tor or senior executive offcer of a describes as “Finance Regula- necessary. Important develop- licensee; introduction of powers tion to insure Bahamian Dollar ments in the pipeline include the tions” made under the ECRA, deposits of or below $50,000. for the Central Bank to impose for the purpose of controlling, draft Central Bank of The Bahamas prohibition orders; enhancement While the Protection of Depos- (Amendment) Bill, 2014, which will buying, selling and dealing in itors Act is administered by the of the Bank’s powers to impose gold, foreign currency, foreign update the CBBA. Several new and administrative monetary pen- Deposit Insurance Corporation, amending Bills and Regulations to securities and foreign exchange. that Act requires the Corporation alties, and enhancement of the The Central Bank has power to effect the transfer of cooperative dormant accounts administration to comply with any general or credit unions (sometimes called exempt any person from the specifc directions of the Cen- regime. Work on the development provisions of the Exchange Con- “fnancial cooperatives”) to the of a special legislative framework tral Bank and to act only on the regulatory and supervisory remit trol Regulations made under the advice of the Central Bank; for bank recovery and resolution, ECRA. of the Central Bank is expected to the purpose of which is to prevent • the Payment Systems Act, 2012, be introduced in Parliament in the • the Registered Stock Act, which or reduce losses to depositors of authorizes the Central Bank to coming months, and efforts are designates the Bank as the failed or failing banks, is also in its oversee the payments system, underway to develop the legislative Registrar for issues of Bahamas initial consideration and assess- provides for settlement fnality framework for a national credit Government Registered Stock. ment stage.

FUNCTIONAL OPERATIONS Chart 1 The Central Bank Of The Bahamas Organisational Chart ORGANIZATIONAL STRUCTURE

The organizational structure of the Central Bank reflects the various tasks Board of Directors performed in fulfllment of its statutory mandate, and has evolved over the years—consistent with changes in operational priorities and the business Audit Sub-Committee Governor environment. To a large extent, many of the early changes involved the elevation of sub-departmental operations into full departments.

Corporate The Bank’s core functions are carried out under four (4) main depart- Governance & Legal Counsel & Internal Audit! Secretary to the Board ments, namely: Banking, Bank Supervision, Exchange Control and Research. Operational support is provided by the following departments/ units: Accounts, Administration, Human Resources, Information Tech- Deputy Governor Operations Deputy Governor Inspector of Banks Corporate Services (Vacant) nology, Internal Audit, Legal and Security. The organization of the Bank is Chief Bank Information Examiner Security shown in Chart 1. Officer

Banking Research Bank Human Information Security Exchange Control Accounts Supervision Administration Resources Technology Unit Department Department Department GOVERNOR’S OFFICE Department Department Department Department Department

The Governor is the Chief Executive of the Bank, and also the Chairman of the Board of Directors. While the Central Bank Act provides for two Dep- uty Governors, to assist the Governor, one of these positions is presently tionally) and Bank Supervision. All other functional responsibilities are vacant. The operational areas which report directly to the Governor are vested in the Deputy Governors. The activities of the Offce is supported by the Legal Unit, the Corporate Governance and Internal Audit Unit (func- several administrative staff. continued on page 10 10 June 10, 2014 Central Bank of The Bahamas

Functional Operations continued unions and dormant accounts defned in the Bank’s Internal Audit Central Bank, as fnancial stability from page 9 administration. Charter. is a precondition for a strong econ- The Unit continues to follow The internal audit activity omy. The Bank Supervision Depart- closely international initiatives in of the Bank functions under the ment, through its supervision and the areas of fnancial sector regula- direct responsibility of the Audit regulation of banks and trust com- tion and oversight, and advises the Committee, with administrative panies, non-bank money transmis- Bank on the effect of these stand- reporting to the Governor. The sion businesses and private trust ards on existing policies, proce- Unit’s head meets monthly with companies, helps to safeguard the dures and legislation. Attention is the Audit Committee to discuss sector and The Bahamas’ reputation also given to identifying opportu- audit reviews, including fndings, as a leading international fnancial nities to provide clarity of direction recommendations and/or action services jurisdiction. From left: Kiris Williams, Administrative Assistant; to the bank and trust companies, plans to address any areas of expo- Over the past forty (40) years, Jacqueline Sands, Senior Executive Assistant and whether through legislative amend- sure to risks and non-compliance the supervisory and regulatory Paula Bain, Senior Executive Assistant ments or guidelines, and to reduce to established policies, procedures regime of the Central Bank has Legal Unit or mitigate legal risk to the Bank and regulatory requirements, as evolved, in line with global regu- The Legal Unit of the Central Bank through preventative measures. well as the Bank’s overall control latory reforms and international was established in 2000, and falls environment. best practices, and so has the Corporate Governance & Internal demands on the Bank’s resources. under the Governor’s Offce. The Audit Unit Bank Supervision Department The Department began with a Unit advises on legal matters arising The maintenance of a sound and in connection with the operation staff complement of six (6), hav- stable fnancial system is one of the ing responsibility for 297 banks and administration of the Bank, most important functions of the and manages the Bank’s relations and trust companies in 1974. with external counsel. The Unit’s head is the Secretary to the Board of Directors and also functions as the Chairperson of the Fraud and Risk Management Committee. Through participating in the Bank’s Policy Advisory Committee, the From left: Rhonda Jadorette, Senior Audit Officer; Unit is also closely involved in the Cleopatra Rolle, Manager, Internal Audit Unit and development of supervisory and Kent Ferguson, Senior Audit Officer regulatory policies, ensuring that Established in October, 2009, fnal determinations are consist- the Internal Audit Unit essentially From left, front row: Cheryl Forbes, Examiner IV; Danae O’Brien, Examiner I; Lyniqueka Johnson, Jr. Admin- ent with applicable legislation and champions strong governance istrative Assistant; Robert Sawyer, Examiner IV; Ravi Noronha, Examiner III; Eugenia Major, Examiner I and international standards and best and operational effectiveness and Candace Thompson-Thomas, Examiner II practices. The Unit also functions effciency within the Bank and, in From left, back row: Monique Neely, Bank Supervision Officer; Karranda Smith, Examiner III; Tawana Patton, as the secretariat for the Group so doing, assists management and Examiner I; Judith LaFleur-Francis, Bank Supervision Officer; Donna Ferguson, Examiner V; Renee Russell, of Financial Services Regulators, the Audit Committee of the Board Administrative Assistant; Thereas Tynes, Bank Supervision Officer and Advira Rolle, Jr. Administrative which is chaired by the Governor of of Directors in the effective dis- Assistant) the Central Bank. charge of their responsibilities. The Since its establishment, the Unit accomplishes this outcome by Unit has participated in the pre- providing an objective assurance paratory drafting of all of the key and evaluation of the adequacy fnancial sector legislation affect- of risk management, controls and ing banks and trust companies, governance processes within the money transmission businesses, Bank, and provides management the payments system, credit with analyses, recommendations, guidance and information that serve to advance the goals and objectives of the Bank. The Unit utilizes a systematic disciplined approach in its evaluation, From left, front row: Ruth Johnson, Examiner V; Tricia Butler, Examiner IV and Sharon Campbell, Examiner V, which is aligned with the From left, middle row: Maureen Pearson, Examiner II; Meaghan Peet, Examiner I; Allison Woodside, Exam- International Standards From left: Sophia Higgs, Administrative Assistant; Charmaine iner II and Natalie Hepburn, Examiner I, for the Professional Prac- Sasso, Executive Assistant; Rochelle Deleveaux, Legal Counsel & From left, back row: Jermaine Williams, Examiner IV; Christanna Brown, Examiner II; Thea McKenzie, tice of Internal Auditing. Secretary to the Board; Stacey Benjamin, Deputy Legal Counsel Examiner I; Cassie Knowles, Examiner I; Tameka Moss, Jr. Administrative Assistant; Chris Barr, Examiner I; The mandate of the Unit is and Tiffany Carter, Assistant Legal Counsel Alexandria Feaster, Administrative Assistant and Thomasina Delancy, Examiner I 40th Anniversary 1974 -2014 June 10, 2014 11

Forty years later, special focus to 2000 the enhanced over- full-scope examina- • The On-site Examination Unit sight, analytical and tions; they are also was formally established late research require- performed in coor- in 2000, to conduct on-site ments have elevated dination with the examinations of our licensees, the staff count to 69, DFIU and IFU. Core in accordance with legislative having oversight of expectations for all provisions; on-site reviews com- 267 bank and trust control functions menced shortly thereafter on institutions (102 have been developed 22nd January, 2001. banks or banks/ so that on-site exam- 2003 trusts licensees and From left: Karen Rolle, Policy Analyst V; Sharon Campbell, Examiner V; Anita Bain, Chief iners and off-site • The Watch-List Committee was 165 trusts licensees); Examiner; Abhilash Bhachech, Bank Inspector; Ruth Johnson, Examiner V; Jerome Johnson, supervisors can use formalized, with the mandate 99 Registered Private Examiner V; Donna Ferguson, Examiner V and Sherrece Saunders, Examiner V the same criteria for of identifying and monitoring Trust Companies; assessing fnancial high risk licensees, and ensuring 2 non-bank Money institutions. Reports that the safety and soundness of Transmission Service of Examinations are “problem” licensees are restored Providers and 8 non- prepared and the in a timely manner. bank Money Trans- progress monitored 2005 mission Agents. until recommenda- • Communication with industry tions have been fully stakeholders was enhanced Organization and addressed/remedi- with the introduction of the Structure ated. Quarterly Letter to Licensees— Bank Supervision For fnancial advising them, inter alia, of is built on three (3) institutions jointly developments that affect their fundamental pillars: From left: Lakeisha Rollins, Examiner II; Edgar Hanna II, Examiner II; Jerome Johnson, Exam- regulated by the operations, new policy guide- off-site surveillance, iner V; Deno Cartwright, Examiner II and Latera Carey-McPhee, Examiner IV Bank and the Secu- lines or amendments for consul- on-site examination rities Commission tations, issuance of guidelines and policy develop- plans, policies and performance, of The Bahamas, joint on-site and regulations, and other perti- ment, with the underlying functions and liaise with local and interna- examinations are conducted under nent supervisory issues. discharged by fve (5) distinct but tional regulators on an ongoing the Protocol for the Joint On-site • The annual communication inter-related units: the Domestic basis. Examinations by the Central Bank process with home regulators Financial Institutions Unit (DFIU); The A&AU has the primary and the Securities Commission of was formalized—providing International Firms Unit (IFU), function of conducting the neces- The Bahamas, established in 2012, them with an overview of the Authorization & Administration sary due diligence associated with which allows for coordination in operations of the relevant Unit (A&AU); On-site Examination the issuance of licences, including planning, execution and reporting subsidiaries or branches in this Unit (OEU) and the Policy Unit the vetting and processing of appli- between the two (2) organizations. host jurisdiction and, simulta- (PU). cations and supporting documents The Policy Unit, which was neously, requesting their com- The DFIU, which was created of proposed owners, executives established in 2000, is responsible ments on the condition of the in 2009, focuses on the surveil- and directors. Responsibility for all for the research, development and parent and its operations. lance of commercial/retail banking supervisory-related applications implementation of supervisory 2006 institutions, along with their group and oversight of Money Trans- policies and guidelines consistent • Guidelines on the Ladder of entities, while the IFU monitors mission Businesses (MTBs), Pri- with international best practices. Supervisory Intervention were non-domestic banking and/or vate Trust Companies (PTCs) and These are developed in consul- issued, which provided the trust institutions—with both units Registered Representatives of PTCs tation with the industry, and are initial framework for remedial responsible for ensuring that insti- is also vested in the A&AU. The reviewed and updated on an supervisory intervention by the tutions adhere to the conditions administrative arm of the A&AU on-going basis. The Unit is also Bank, should there be cause for attached to their licenses. Through ensures the proper operational instrumental in the implementa- concern from a licensee’s opera- on and off-site surveillance, the functioning and back offce sup- tion of key supervisory initiatives, tions or its non-compliance with units assess the quality of banks’ port for all supervisory activities, such as the Basel II and Basel III legislation, regulation, or Bank assets, as well as liquidity, solvency, inclusive of correspondence man- frameworks, which are in the pro- directives. capital adequacy and risk expo- agement, issuance of notifcations cess of being implemented by the • The Bank participated in the sures; and fnancial statements and to licensees and maintaining the banking sector. IMF’s information dissemina- other statutory flings are analysed licensee database. tion and monitoring initiative on a monthly, quarterly and annual The On-Site Examination Unit, Key Supervisory Initiatives for international and offshore basis. Bank offcials also meet with which was established in 2000, is Over the years, the supervisory fnancial centres, which allowed the senior management of licensed responsible for conducting, at the regime has been enhanced through for enhanced transparency and institutions, at least once a year, premises of licensees, inspections a number of Central Bank initi- improvement in the quality of and quarterly for the commercial of their operations. Inspections atives, key among which are the banks, to discuss their business are risk-based and may vary from following: continued on page 20 12 June 10, 2014 Central Bank of The Bahamas A Career at the Central Bank of The Bahamas The Central Bank is at the centre of the tral bank, the focus is often on professionals opportunities during the summer months. fnancial services industry. Being responsible with skills in: Details on this programme are available on the for the formulation of monetary policy and • economics; Bank’s website. the regulation and supervision of the principal • accounting; fnancial institutions, the Bank plays a key role • banking and fnance; Staff Testimonials in fostering sound and stable fnancial and real • law; sector conditions, and contributes to informed • information technology; and decision making by the public. • human resource development. I joined the Cen- A career at the Bank presents individuals Apart from these areas, the Bank also has tral Bank in 1983, as a Bank Supervision with a unique opportunity to learn about The need for clerks, administrative professionals Assistant, and advanced Bahamas’ fnancial services industry and how and security offcers. to my current position as the economy works. The Bank offers a chal- In return, we reward our employees with Examiner IV, so the Bank lenging, rewarding, high profle work environ- competitive salaries and an extensive benefts has been my home for ment, with an opportunity for its employees to programme (e.g. a pension plan; professional the past 30 years… and counting! contribute to and influence policy making at training programmes; subsidized educational Working at the Cen- the highest level. Our work is also closely linked and loan facilities; fully subsidized health tral Bank is an extreme with regional and international regulatory and coverage; an employee assistance programme; pleasure, and an expe- supervision institutions, hence the invaluable and continuous learning and development rience I would not trade for anything in the world—as it has enabled me to achieve opportunities). New my personal, lifelong dreams and aspirations. recruits are provided Apart from the financial benefits, it has afforded me with a well-planned many training opportunities, both locally and overseas, orientation pro- to gain a wealth of knowledge in financial sector regula- gramme to assist tion—required to successfully carry out my duties. A particularly important benefit of these exposure opportunities them in understand- is the working and personal relationships I have cultivated ing the Bank’s role, with experts in similar fields in most countries of the functions, structure, world! Like any job, another rewarding aspect is having working environ- the opportunity to impart knowledge to others. This gives me a tremendous level of satisfaction, because it provides a ment and relation- framework for the Bank to continue to grow. ship with other key Cora V. Hepburn, Examiner IV, institutions and economic sectors. The recruitment Being offered a job process for posi- at the Central Bank, in tion vacancies with 2010, in the Banking the Bank includes Department, was the opportunities for networking, representing interviews; reference checks; security clearance greatest opportunity ever afforded me, as it was a the Bank at overseas meetings, and gaining a and, in specifc cases, aptitude assessments huge step up from my global perspective on operational approaches and pre-employment medical examination. last occupation. So far, taken by foreign central banks and banking Generally, it is the Bank’s policy that I’m enjoying the progres- supervisors. vacancies are advertised, both internally and sive environment, as I’m Because our employees are key to our externally, and we do so via our website (www. constantly challenged to find new approaches and success, we are always keen to attract quali- centralbankbahamas.com) and in the local better solutions to getting fed, skilled and highly motivated individuals newspapers. Interested persons are, therefore, the job done, and the to fll position vacancies—candidates who are encouraged to apply for any position that is team dynamics is impressive. I feel supported by all levels then challenged to deliver quality service to the commensurate with their qualifcations and of management, and valued as an employee, and the social networking helps to build strong connections between staff Bank’s stakeholders. In our recruitment and experience for consideration in a competi- members. selection process, therefore, the Bank seeks to tive recruitment process. As applications are For me, the Bank provides an excellent menu of com- achieve a good balance between strong tech- accepted only for currently advertised career pensation benefits as well as training opportunities that I nical knowledge, relevant experience and the appointments, we invite you to check our web- believe will allow me to achieve my career aspirations. I’m ability to demonstrate the competencies and site regularly. particularly excited about the opportunities to pursue my career goals, tapping into assistance available through the values (integrity, excellence, initiative, objec- The Bank considers itself to be an employer Bank’s educational programmes. Coming to work every tivity, confdentiality, teamwork and empower- of choice, and is continually exploring ways to day as a member of the Bank and my immediate team ment) that are important to the institution. build the pool of prospective employees. One (which I regard as the best!), is both an honour and a bless- Our recruitment needs, for full time posi- such avenue has been the Junior Professional ing, and I look forward to many more years here. Frederick Cargill, Banking Assistant tions, cover candidates with skills over a wide Programme, which provides a limited num- range of areas; however, as The Bahamas’ cen- ber of college students with work experience Colour Page

40th Anniversary 1974 -2014 June 10, 2014 13

Who We Are MISSION STATEMENT To foster an environment of monetary stability conducive to economic development, and to ensure a stable and sound financial system through the highest standards of integrity and leadership. VALUES Our commitment to fulfilling our Mission is embodied in our Core Values of: • Objectivity • Confidentiality • Integrity • Excellence • Teamwork • Empowerment • Initiative VISION To promote a leading financial services industry within the framework of dynamic monetary policy developments, modernized payment systems, sound management strategies and capacity building. OUR STRATEGIC GOALS THE CENTRAL BANK’S • Goal 1: Effective Monetary Policy—Pursuing strategies to improve forward looking economic policy research and analy- LOGO sis through economic forecasting; to enhance the operational framework for implementing monetary policy; to broaden research and data publication and communication; and to THE SANDDOLLAR strengthen the coordination between fiscal and monetary policy. The sanddollar is an invertebrate marine animal that has a flat disk- • Goal 2: Safety & Soundness of the Financial System—Pur- shaped body. It is particularly well adapted for burrowing in sand banks. suing strategies to sustain the integrity and effectiveness The entire surface of the animal’s body is covered by small spines which of the legal and supervisory regime; to ensure compliance are used for digging and crawling. The mouth is located in the centre of with international standards; to strengthen the banking and the body’s underside and on the upper-side there is a pattern of fve ‘pet- trust sector; and to mitigate risk through crisis preparedness als’ spreading out from the centre. arrangements. The selection of the sanddollar as the logo of the Central Bank was • Goal 3: Effective Contribution to Economic Policy Making— made by the frst Governor, Mr. T. B. Donaldson, who, in addition to Conducting economic research as input to policy formulation, wanting something Bahamian, was ‘intrigued by the elegance and his- and participating in national advisory committees. tory’ of this unusual specimen of marine life, of which an interesting legend exists. • Goal 4: Secure, Efficient and Modern Payments System— Implementing comprehensive oversight mechanisms, mitiga- The markings on the shell of the sanddollar are said to symbolize the tion of risks, and ensuring the availability of enabling market Birth, Crucifxion and Resurrection of Christ. infrastructure for delivery of services to the public. On the top side of the shell an outline of the Easter Lily is clearly seen. At the centre of the Lily, a fve-pointed star representing the Star of Beth- • Goal 5: Prudent Foreign Exchange Management—Efficient lehem appears. The fve narrow openings are said to be representative management of external reserves and administration of of the four nail holes and the spear wound made in the body of Christ exchange controls. during the Crucifxion. • Goal 6: Operational Efficiency—Continuous enhancements Easily recognizable on the reverse side of the shell is the outline of to risk management processes in the areas of internal con- the Christmas Poinsettia and also the Bell. When broken, inside the shell trols, human resource development and succession planning; are fve birds called Doves of Peace. Some say they are the Angels that implementation of robust information systems and business sang to the shepherds on the frst Christmas morning. continuity arrangements and efficient facilities management. 14 June 10, 2014 Central Bank of The Bahamas MEET OUR BOARD & EXECUTIVE MANAGEMENT TEAM

Central Bank Board Members from left to right: Mr. Maxwell Gibson, Mr. L. Edgar Moxey, Governor Wendy Craigg, Mr. Felix Stubbs and Archdeacon James Palacious.

Michael F. Lightbourne Abhilash Bhachech Rochelle A. Deleveaux Gerard L. Horton Deputy Governor Inspector, Banks & Trust Companies Legal Counsel & Secretary to the Board Manager, Exchange Control Department

Barry Turnquest Alwyn Jordan Deborah Ferguson Ian B. Fernander Sr. Deputy Manager, Banking Department Sr. Economist, Research Department Manager, Human Resources Department Manager, Administration Department

Cleopatra Rolle Errol L. Bodie - Manager, Keith T. Jones John Ferguson Manager, Internal Audit Information Technology Department Manager, Accounts Department Chief Security Officer 40th Anniversary 1974 -2014 June 10, 2014 15 The Bahamian Economy Through A Graphical Lens (1973-2013) 16 June 10, 2014 Central Bank of The Bahamas

Balcony House

Main Building The Central Bank’s Properties The Central Bank had of the new $2 million Cen- House and Verandah its physical beginnings in tral Bank building com- House. Balcony House, the E.D. Sassoon Building menced in March, 1973. a 220 years old prop- Verandah House (now Rodney Bain Build- The cornerstone of the erty, is considered ing) at the corner of Parlia- building was laid by Prince the oldest existing ment and Shirley Streets, in Charles on 9th July, 1973, wooden residential which the Bahamas Mon- during the independence building in The Baha- etary Authority (BMA), the celebrations, and the build- mas and, after several forerunner to the Bank, was ing was offcial opened by restoration projects, situated. Her Majesty, Queen Eliza- today, the property As the operations of the beth II, on 21st February, serves as a museum, BMA expanded, the author- 1975. A plaque marking displaying house- ities acquired, towards the the offcial opening was hold period pieces, end of 1971, the former unveiled by the Queen furniture and other Trust Corporation of The during a brief ceremony on accessories, under the Bahamas building, and the landscaped forecourt management of the commenced a programme and front arcade of the Antiquities, Monu- The Great House to renovate and ultimately building. ments and Museums expand the building over An increase in the staff Corporation. The Veran- and the Malcolm property, suffciently completed to the years to the present complement over the years dah House, located to the were demolished to accom- accommodate the Annual edifce. In May 1972, the necessitated additional north of Balcony House, modate increasing space Art Exhibition in Novem- two architectural frms offce space, and, as a tem- was also restored by the requirements of the insti- ber and the relocation of of Rutkowski, Bradford porary arrangement, the Bank and, since, 2001, has tution. the Bank Supervision and and Partners of Kingston, Bank relocated the Bank been utilized by the Insti- In December 1988, the Research Departments Jamaica, and Donald Cart- Supervision and Research tute of Financial Services Bank signed a contract with from Bolam House during wright and Robert Stokes Departments to leased as a training facility. A third Guarantee Builders Lim- the closing week of Decem- of Nassau, were appointed space in Bolam House on propery, the Great House, ited for the construction of ber. With works fully com- to design the accommo- George and King Streets. serves as the Bank’s staff an extension to the north pleted by September 1991, dations required for the Between 1985-1987, cafeteria, a recreational of the main building, as at an approximate cost of Central Bank. After some the Bank acquired sev- centre for staff and houses designed and supervised $4.6 million, the Gover- consideration, the decision eral parcels of land on the the “after school care” pro- by a team of architects nor’s Offce, Security Unit, was taken to demolish the western side of Market gramme. Other buildings from the Ministry of Works. Computer and Exchange building and erect a new Street, including the Byrce acquired over the years, Towards the end of 1990, Control Departments were building, and construction Property with Balcony such as the Sands Holm the new extension was relocated. 40th Anniversary 1974 -2014 June 10, 2014 17 Promoting and Celebrating the Arts The Central Bank of The Baha- period, from Wednesday to Fri- professors, like Dr. Erica James mas’ Art Gallery is a non-proft day. During this time, Mr. Roberts and Dr. Krista Thompson, have gallery space dedicated to the painstakingly went to the Bank been recognized for their artistic preservation and promotion of early in the mornings to display talents while competing in the visual arts in The Bahamas. all submissions, and returned late high school category of the Cen- As the vision of Sir William afternoon to put away the pieces. tral Bank’s Annual Art Competi- Allen, former Governor of the In November 1990, the Gallery tion and Exhibition. Central Bank, the art programme was suffciently completed, ahead Nearly thirty years later, the began in 1984 to commemorate of the Bank’s occupation of the Annual Art Competition and the 10th anniversary of the estab- new extension in 1991, to host the Exhibition attracts an increas- lishment of the Bank. frst Annual Art Competition and ingly large number of entrants, so At the invitation of Governor Exhibition held entirely indoors. much so that the open and high Antonius Roberts - Curator Allen, Mr. Antonius Roberts, Cura- The experience and exposure school categories have been sep- tor, was commissioned to develop from participating in the Cen- arated into two events. The Open Although not considered a an art programme to provide tral Bank’s art programme have Category has been renamed the typical central banking activity, talented young Bahamians, under fostered the development and Senior Category Competition and this programme represents one of the age of 26 and art students in artistic careers of numerous Baha- Exhibition and is held in October; the many ways in which the Cen- high school, with a platform to mians. Noted young artists, like and the High School Category, tral Bank has sought to make a showcase their talents in a secure, John Beadle, Chan Pratt, Nicole now also called the Junior Cat- valuable contribution to the social centrally located and prominent and Roshan Minnis, Dorman egory, is held in the traditional development of our nation. As an public space. Additionally, the Stubbs, Ricardo Knowles, Lillian month of November. institution, the Bank subscribes participants would compete for Blades, Jessica Maycock Cole- The Central Bank continues to to the view that investing in our cash prizes and art scholarships. brooke, Tavares Strachan, Kishan have a signifcant impact on the youth through the arts plays a Prior to the expansion of the Munroe and Lavar Munroe, have preservation and development vital role in confdence building, Bank to include the “Gallery”, been recipients of art prizes and/ of art in The Bahamas, inviting developing their appreciation for which originally was intended or scholarships from the Central high school students to showcase diversity in ideas and providing by Governor Allen to include Bank. These, and other artists, their talents to an array of viewers a vehicle for healthy self-expres- the display of coins, the works are presently practising art pro- who provide the budding artists, sion and creativity. Since the submitted for competition were fessionally in The Bahamas and/ in many cases, with frst time programme’s inception, in 1984, displayed around the veranda or overseas. Additionally, inter- support by commenting on and the Bank has awarded in excess of of the building over a three-day nationally respected curators and purchasing the works. $250,000 in prize money.

Monetary Policy in The Bahamas as to control the level, cost and direc- Chart 12 continued from page 6 tion of credit, by the use of selective Transmission of Monetary Policy in The Bahamas policy regime is not independent. controls on credit and adjustments in In formulating monetary policy, the Central interest rates.

Bank takes into consideration the prevailing Impact Loan rates Increased Banks lower Economic on linked demand Policy Instruments Prime Stimulus Credit Rate to Prime for loans and prospective domestic economic situation, decline Government’s fscal operations and emerging Over the past forty years, the main external sector developments, which are key monetary policy instruments utilized in the execution of monetary policy in Mortgages Construction determinants of foreign exchange earnings. Central Bank The Bahamas were direct controls on Lowers Consumer Loans Retail The Bank also continuously monitors banking Discount Rate Sales

credit (credit ceilings) and deposit rates Comercial Loans Wholesale sector credit and liquidity conditions, and their Sales implications for external reserves. (interest rate caps); prescribed reserve requirements; changes in the Central Banks No shift in The amount of credit extended by banks Impact on lower deposit Interest earned deposits No effect on Bank Discount rate, and moral suasion. Exchange rates to reduce on deposits abroad, due Exchange has a direct influence on economic activity, Rate interest rate decline Exchange Rate spread/profit vs. int’l rates Controls as it provides fnancing for consumption, • Selective credit controls: These are margin working capital and business investments for quantitative limits set by the Central Bank on the type and direction of future growth in output. However, in an open be held in non-interest bearing reserves economy with a fxed exchange rate, and high commercial banks’ credit; as such, they mainly involve the imposition of some at the Central Bank. An increase in reserve consumption of foreign goods, excessive credit requirements restricts banks’ capacity to growth could have a detrimental effect on the type of credit ceiling. • Reserve Requirements: The Central Bank is expand credit, and the reverse is regarded as external reserves levels. To address this con- credit easing. cern, the Bank, therefore, acts in such a way empowered by law to require a certain pro- portion of banks’ Bahamian Dollar deposits continued on page 18 18 June 10, 2014 Central Bank of The Bahamas

Monetary Policy in The Bahamas Period Economic/Monetary Context Policy Measure Desired Outcome continued from page 17 1974 Commercial banks obliged to maintain statutory reserves Required no major adjustment equal to 5% of Bahamian Dollar deposits (4% to be held in by banks, given their practice of • Discount rate: The Central Bank, non-remunerated deposits at the Central Bank and 1% in holding reserves with the Baha- as lender of last resort to com- vault cash). mas Monetary Authority (BMA) mercial banks, sets the rate at for clearing purposes. which they can avail themselves 1975 High level of banking sector The Central Bank established a Special Deposit Account To influence potential alternative of secured short-term loans to liquidity and balances held with on which interest of 4% was paid on banks’ balances in uses of funds for lending. deal with temporary liquidity the Central Bank. excess of 250% of statutory reserves. Scheme continued until October 1975, when levels abated. issues. For example, an increase in the Discount rate signals the 1979 Increasingly tightened liquidity, The Central Bank hiked the rate charged on commercial To control growth in credit, and amid strong expansion in private banks’ borrowing against the security of Government bonds alleviate pressure on liquidity. Central Bank’s desire to pursue sector credit, forcing banks to from 0.5% to 1.0% above the Prime Rate; and, in consul- tightened credit conditions. seek accommodation from Cen- tation with the Government, placed Government deposits While this change does not tral Bank. with banks at market interest rates. directly serve to tighten credit, 1980 Unabated growth in bank credit Commercial banks agreed to raise the Prime rate, to To curtail the rapid expansion in because banks rarely borrow created tight liquidity conditions 11.00% from 9.00%; and the Central Bank provided short- credit. from the Central Bank to lend and downward pressure on exter- term accommodation at a rate of 11.00%. nal reserves. In November, as conditions worsened, the Bank imposed a to customers, it seeks to evoke 2.0% surcharge on borrowings by commercial banks. To discourage frequent use of changes in a whole range of The Central Bank placed deposits with select commercial this facility. interest rates set by the banks. banks, to assist with liquidity constraints. Therefore, Discount rate changes 1981 Persistence of excessive credit The Central Bank imposed on banks secondary or liquid Further control credit growth. are usually always accompanied growth and tight bank liquidity. asset reserve requirements—20% of demand deposits; by changes in banks’ Prime Rate, 15% of savings and fixed deposits in liquid assets. The Central Bank lifted the 2% surcharge on frequent bor- the variable rate at which they rowing by commercial banks. To alleviate liquidity constraints. lend to their customers. Commercial banks required to limit the interest paid on To discourage destabilizing shifts • Moral Suasion: This entails the other deposits to 10.0%. in deposits between institutions Central Bank persuading commercial banks, through influence, 1982 Downward pressure on external Commercial banks encouraged to bring in funds to supple- To restrain credit and stabilize rather than coercion, to make reserves. ment domestic resources. monetary conditions. The Central Bank reinstated the 2% surcharge on banks’ certain decisions or follow certain use of Discount window that was lifted in November 1981— paths to achieve a desired result increasing the effective rate to 12.0%. (e.g. a change in the level and Sterilized substantial National Insurance Board (NIB) direction of credit). This has tra- deposits, and then made deposits with selective commer- To ease tight liquidity conditions. ditionally been the Central Bank’s cial bank to ease liquidity pressures. frst resort and has been very 1983 Tight liquidity conditions. Moral suasion utilized to encourage banks to keep credit effective over the years. within certain limits. Commercial banks allowed to supplement domestic resources via their foreign currency positions. Monetary Policy Measures To stem upward pressure on interest rates, the Central Over the past 40 years, the Central Bank lowered its base lending rate to 9.0% from 10.0%, Stem upward pressure on inter- Bank has been confronted with a but reserved the option to re-impose a 2% surcharge for est rates. number of potentially destabiliz- frequent borrowers. ing situations, which necessitated 1984 Shifting liquidity conditions, High levels of liquidity led the Central Bank to demonetize a To restrain credit growth and policy actions aimed at securing continuing concerns for credit substantial amount of NIB deposits. protect external reserves. growth As liquidity conditions tightened near year end, the Central stable money and credit condi- Bank sought to discourage banks’ use of the Discount Win- tions, and ultimately the external dow—increasing the minimum Discount rate, by 50 basis reserves position. Typically, liquid- points to 9.5%, and the rate applied to frequent borrowing ity and credit conditions are sig- was reduced to 10.00% from 11.00%. nifcantly influenced by real sector 1985 Strong growth in external The Central Bank lowered the Discount rate, from 9.50% To stimulate economic activity. flows derived from tourism and reserves, rising liquidity levels, to 8.50%; commercial banks followed with an equivalent foreign direct investment activity slow credit growth. reduction in the Prime and savings rates, to 10.00% and 5.00%, respectively. which, themselves, are subject to Moral suasion used to encourage banks to lend more to variability in the performance of existing and potential growth sectors and to restrict growth the global economy. The following in credit for consumption purposes. table chronicles the various policy 1986 Continued growth in liquidity, The Central Bank cut Discount rate by 1% to 7.50%; com- To spur economic activity. measures pursued by the Central linked to tourism and healthy mercial banks followed suit by reducing Prime and savings Bank, while providing a backdrop gains in external reserves. rate, by 1% each, to 9.00% and 4.00%, respectively. Moral suasion continued to influence the direction of credit of the economic and monetary growth. context for these changes, as well as the Bank’s desired objectives. 40th Anniversary 1974 -2014 June 10, 2014 19

Period Economic/Monetary Context Policy Measure Desired Outcome 1988 In late 1987, with the onslaught The Central Bank raised the Discount rate from 7.5% to To discourage banks from utiliz- of aggressive bank lending, amid 9.00%. ing Central Bank resources to substantial inflows from tourism, improve liquidity positions for loan and shifts in NIB deposits to programmes. banks, which was being used to fund consumer lending, culmi- Cap of 8.00% imposed on all new bank deposits—to To stem further disruptions in the nated in tightening liquidity condi- discourage destabilizing shifts of large deposits among financial system. tions and sharp deterioration in institutions. external reserves. 1990 Continuation of unsustainable Amended Central Bank Act to increase penalties for To restrain private sector credit credit growth and deterioration in required reserves deficits. growth. external reserves The Central Bank instructed banks to insist upon a higher minimum down payment or equity requirement of 35% on consumer loans. 1992 Prevailing weakness in the The Central Bank lowered the Discount Rate to 7.5% from To encourage economic activity. domestic economy. 9.0% and the commercial banks responded by decreasing the Prime Rate to 8.0% from 9.0%. The Central Banks reduced the ceiling on deposit rates to 7.0%. 1993 Improvement in external reserves, The Central Bank removed the 35% equity requirements— To ease credit restrictions and and recovery in bank liquidity. reverting to the 25% norm. encourage growth. Ceiling on deposits reduced to 6.75% and then to 6.25% by end-1993. 1994 Improved liquidity situation. The Central Bank eliminated the 6.25% ceiling on deposit To ease credit restrictions. interest rate. 1998 Robust growth in economic The Central Bank issued instructions for commercial banks To restrain private sector credit activity alongside commensurate to insist upon a minimum 25% equity requirement on con- expansion to more sustainable credit growth reignited concerns sumer loans. rate. about liquidity management. 1999 Improved outlook for bank liquid- The Central Bank lifted the 25% down-payment require- To support the economic recov- ity and external reserves. ment from new consumer loans. ery. Increasingly buoyant reserves The Central Bank reduced the Discount rate, by 75 basis Encourage lending on mortgages and liquidity. points to 5.75%; commercial banks responded with a and loans to the productive reduction in the Prime Rate to 6.0%. sectors. 2001 Deepening weakness in tourism, The Central Bank imposed a freeze on outstanding bank To protect the external reserves following 9/11; concerns about credit to private sector—to the extent of resources provided position. sustainability of external reserves. from ongoing loan reflows. Heightened downward pressure The Central Bank temporarily increased banks’ open foreign Support for the external reserves on external reserves. currency positions, to $5.5 million from $0.5 million. position—as banks were allowed to convert foreign currency to Bahamian dollars. 2004 Improved economic outlook, Restrictions on banks’ lending, in place since 20th Septem- To provide stronger support based on tourism and foreign ber 2001, were lifted. for domestic consumption and investment inflows. Commercial banks advised to adhere to total debt service imports. ratios of 40% to 45% of monthly income; require a minimum equity contribution of 15% on all personal loans, with the exception of those secured with mortgage indemnity insurance—although these were relaxed a month later for hurricane (Frances) relief loans. 2005 Sustained levels of excess liquid- The Central Bank lowered the Discount Rate by 50 basis Credit freeze caused a build-up ity, external reserve adequacy. points to 5.25%, and commercial banks followed with a in liquidity. reduction in Prime, from 6.00% to 5.50%—effective 15th February. 2008 Deterioration in credit quality indi- Commercial banks permitted to deviate from the debt ser- An accommodation to the difficul- cators in the context of the global vice ratios earlier prescribed—although maintaining prudent ties being experienced by private financial recession; increase in lending practices. sector. unemployment; debt servicing difficulties. 2011 Positive economic momentum The Central Bank reduced the Discount Rate by 75 basis To support the economic recov- and significant build-up in exter- points to 4.50%, in June 2011. Commercial banks followed ery. nal reserves—from Government suit with a corresponding lowering of the Prime, from borrowings and a number of 5.50% to 4.75%. one-off inflows. 20 June 10, 2014 Central Bank of The Bahamas

Functional Operations continued cooperative arrangements with ment, participate in the Caribbean management, inclusive of statutory from page 11 other supervisory authorities. Group of Banking Supervisors’ monthly and annual fnancial state- fnancial sector data interna- Therefore, the Bank has a frame- (CGBS) meetings which focus on ments, which contain a detailed tionally. work for cooperation with domes- regional cooperation on various balance sheet, as well as accounts 2007 tic and foreign supervisors, which initiatives; as well as the Carib- of the Bank’s operations and reserve • The Bank released the electronic is based on legislative or specifc bean Financial Action Task Force allocations. Quarterly Reporting System agreements and arrangements, (CFATF), where the Bank is repre- Other Bank-related responsibil- (QRS), which facilitated the elec- and also provides for protection of sented on various technical com- ities of the Department include the tronic submission of reports by confdential information shared by mittees. The Bank also maintains preparation, monitoring and con- licensees and was subsequently supervisory authorities. an active engagement with several trol of the Bank’s annual budget, revised in 2010 and 2011. On the local level, senior international training and develop- the administration of employee 2009 supervisory staff participate in ment agencies such as the Associa- salaries and payments related • Stress testing became an inte- the work of the Group of Financial tion of Supervisors of Banks of the to pensioners; the execution of gral part of supervisory discus- Service Regulators (GFSR), which Americas (ASBA) and the Centre payments to the Bank’s service sions with commercial banks— comprises the six (6) domestic for Latin America Monetary Stud- providers in relation to the pro- commencing with credit and regulators for the banking and ies (CEMLA), through hosting and curement of goods and services, later, extending to liquidity and trust sector, the securities indus- participating in training events. In and the maintenance of the Bank’s interest rates. try, insurance companies, credit addition, it serves internationally fxed assets. In all of its activities, • The Bank set higher minimum unions and fnancial and corporate as part of the Group of Interna- the Department conducts ongoing risk-weighted target and trigger service providers. tional Financial Centre Supervisors reviews of the adequacy of internal capital ratios, of 17% and 14%, Supervisory colleges are a key (GIFCS); and continues to partner controls, to ensure the integrity of respectively, for all commercial mechanism for exchanging infor- with other international super- the Bank’s operating systems and banks, well above the mini- mation and coordinating supervisors, as part of its supervisory fnancial data. mum capital standards of 8%, to visory activities involving cross regime. border fnancial groups—with Banking Department ensure that banks maintained OPERATIONS The Banking Department has suffcient levels of capital to act discussions of the key risks and developments facing these insti- undergone a number of trans- as a buffer against the system Accounts Department formational events, since being risk. tutions, deliberations covered the The Accounts Department’s core impact of various national and established in 1971 under the 2010 responsibility is to ensure the management of Mr. Hamish Walker, • The Bank launched the Risk- global regulatory reform initiatives integrity of the Bank’s fnancial on the business operations of their an offcer on secondment from the based Supervision Framework information, through compliance Bank of England. The Department (RBSF), which assists the Bank groups. Supervisory engagement with both the Central Bank Act and with Home Regulators, through discharges several of the Bank’s in developing an understanding International Financial Reporting statutory obligations, in relation to of institutions’ business strat- annual regulatory letters, is Standards (IFRS). In carrying out another proactive mechanism to its specifc functions and the imple- egies, risk management and this responsibility, the Department mentation of its policies, namely: internal control functions. Sim- ascertain the risk areas identifed undertakes periodic reporting to within group structures. • Issuance, redemption and main- plifed and full risk assessments tenance of the stock of currency are utilized to assess licensees Memoranda of Understand- ing are also used to enhance • Conduct of banking operations and provide for optimal alloca- on behalf of government and tion of supervisory resources. cooperation and the exchange of information in the supervision of public corporations 2013 • Payments and Settlement oper- • Behind substantial implemen- cross-border institutions, with provisions to ensure that confdenti- ations tation of aspects of Basel II, the • Conduct of banking relations Bank introduced its roadmap for ality of information is maintained. The Bank has a total of eight (8) with commercial banks the full implementation of the From left: Monique Minns, Jr. Administrative Assis- • Conduct of Open Market Oper- International Convergence of Memoranda of Understanding (MoUs), with seven (7) countries tant and Selcia McKinney, Executive Assistant ations Capital Measurement and Capi- • Management of External tal Standards (Basel II) and Basel and one (1) regional group, facilitating the exchange of information Reserves III, to strengthen the existing Over the years, the Depart- framework for regulation, super- with respect to specifc regulatory issues or fnancial, operational ment’s operations continue to be vision and risk management of upgraded through the employ- the banking sector. and environment risk factors. A MoU has also been signed by the ment of technology. Having been a Domestic and International members of the GFSR to provide member of the Society for World- Cooperation for information sharing and regu- wide International Financial Tel- Effective oversight of the fnan- latory cooperation in the domestic ecommunications (SWIFT) since cial system, in an environment context. From left: Charlene Fox-Ferguson, Deputy Manager; 1985, the Bank began utilizing the of domestic, regional and inter- Regionally, senior management Doreen Douglas, Accounts Officer and Daphne network, in June 1998, to transmit national linkages, requires strong of the Bank Supervision Depart- Knowles, Accounts Officer high speed messages relative to 40th Anniversary 1974 -2014 June 10, 2014 21 international business. Enhanced banknotes returned from circula- commitment, under its discount tions. The Bank also makes tempo- operational effciency and cost sav- tion to a robust examination and window facility, to act as a lender of rary advances to the government ings have been achieved through verifcation process. In this deter- last resort, in the event a commer- and provides transactional banking the automation of vault manage- mination of ftness, ft notes are cial bank experiences a temporary services, mainly for facilitating debt ment systems, foreign exchange placed to stock for reissuance at a liquidity situation. Lastly, the Bank servicing obligations and various and treasury operations, public future date, while those deemed provides daily centralized clearance international payments. debt origination and registry ser- unft or mutilated are destroyed. and settlement facilities for com- Debt registry services are also vices, and the integration of new In its public relations role, the mercial banks’ interbank transac- provided for other public sector systems with legacy general ledger Department continues to promote tions, which are facilitated through debt, such as the Bridge Authority systems and the local electronic public confdence in the bank- their surplus deposit balances held Bonds, the Clifton Heritage Bonds payments infrastructure to achieve notes, through its semi-annual with the Bank. and Education Loan Authority straight through processing. counterfeit detection seminars, Bonds. which assist retailers and cash Settlement Facility Currency Operations handlers in the verifcation of the The Bank plays an important role in Open Market Operations The Central Bank is the only insti- authenticity of banknotes. the provision of stable, secure and Given the limited scope of domestic tution legally authorized to issue Notes and coins are issued only effcient settlement of payments capital market activity, the Central notes and coins in The Bahamas. to the seven (7) clearing banks, in The Bahamas. Since May 2004, Bank makes very little use of open Responsibility for the design, mint- upon request, which, in turn, the Bank has operated the Baha- market operations, characterized as ing, and printing of currency falls service the currency requirements mas Interbank Settlement System transactions taken, at its initiative, under the purview of the Banking of the public. Banknotes have a (BISS), the country’s Real Time to influence liquidity conditions. face value Gross Settlement (RTGS) system, However, the Bank maintains a pri- of $0.50, $1, which accommodates real time, mary market for the central Govern- $3, $5, $10, irrevocable, gross settlement of high ment’s Treasury bills and long-term $20, $50 value and time critical payments bonds. Treasury bills are offered, and $100, between clearing banks and their via tender, for periods of 91 or 182 and coins customers. BISS also facilitates days, in increments of $100. Bonds, are most the fnal settlement of cheques which carry longer maturities of commonly and low value electronic interbank up to 30 years, are issued at par, in circulated payments processed by the Auto- multiples of 100, with a minimum as 1¢, 5¢, mated Clearing House (ACH). This investment of $100 and varying 10¢, 15¢ is accomplished by the seven (7) interest rates generally linked to the and 25¢. clearing banks using their Central Bahamian prime lending rate. In Bank reserve accounts, through the absence of an active secondary From left, front row: Derek Rolle, Deputy Manager; Lisa Sterling-Smith, Banking Assis- Apart seven (7) daily settlement windows, market, the Bank performs market tant and Jason Watkins, Vault Clerk/Teller from cir- starting at 8:15 a.m. and ending at maker activities, on a discretionary From left, middle row: Frederick Cargill, Banking Assistant; Angelo Butler, Banking culation 4:45 p.m. basis. Assistant and Lloyd Johnson, Teller, Currency Operations coins, the Given the critical role of the From left, back row: H. Jermaine Campbell, Sr. Banking Officer and Marvin Pinder, Sr. Department RTGS, the Bank invests signifcant Management of External Reserves Banking Assistant adminis- resources in its technical and busi- The Bank is responsible for the pru- ters the Bank’s numismatic pro- dent management of the country’s Department, which is tasked with gramme, which has been in exist- ness infrastructure, to ensure that ensuring an adequate supply of it operates to appropriate stand- external (foreign) reserves, which ence since 1973. This programme are used to facilitate importation Bahamian currency in circulation, of collectors’ coins—which are ards of availability and resilience, along with maintaining confdence and meets the needs of stakehold- of goods and services from abroad, legal tender, has in excess of one and settlement of foreign currency in the banknotes issued to the hundred circulation coin proof ers. Since the launch of the ACH, in public. The Department, therefore, January 2010, the Bank no longer debt obligations. These are held and non-proof set series, depicting in the form of foreign government conducts exercises to forecast the authentic Bahamian images and provides cheque clearing facilities demand for new currency; takes for the domestic system. securities, deposits in foreign banks, commemorating signifcant mile- Special Drawing Rights issued by special care in the design and stones in Bahamian history. selection of substrate, and seeks to Banker to Government the International Monetary Fund, The Bank, as the offcial registrar and the Bahamas’ Reserve Position include the latest in banknote secu- Banker to Commercial Banks rity features in order to deter coun- Like any central bank, the Bank and transfer agent for government in the IMF (the Reserve Tranche). terfeiting. It also considers options plays the role of banker to banks. securities, oversees and facilitates Foreign reserves are managed to increase the circulation life of This function includes, in the frst the issuance, ongoing maintenance by the Bank’s Investment Com- banknotes, with a view to reducing instance, the maintenance of com- of ownership records, redemption mittee (IC) within the framework printing costs. mercial banks’ non-interest bear- and servicing of Bahamas Govern- established by the Central Bank Act To maintain a high quality ing deposits, in fulfllment of their ment Registered Stock (bonds) and and a board-approved Investment of banknotes in circulation, the statutory reserves, which serves to Treasury bills—two (2) principal Policy and Guidelines. Preservation Department, with the aid of bank- limit their credit expansion capa- avenues utilized by the government of capital and liquidity manage- note sorting machines, subjects all bilities. Then, there is the Bank’s in fnancing its budgetary opera- ment are the primary objectives 22 June 10, 2014 Central Bank of The Bahamas of the Bank’s reserve management activities have been facili- of data and report writing; activities, with optimization of tated through continuous Statistics (staff of 9), which returns to be achieved within these improvements in systems, is responsible for processing two (2) constraints. By investing moving from paper based data and preparing vari- in high quality assets, having an to electronic submission by ous statistical reports, and investment grade rating of A1 or the banks, and a compre- Payments (staff of 2), which higher, the Bank is able to miti- hensive debt recording and is responsible for oversight gate portfolio risk and achieve its management system. of fnancial sector payments preservation of capital objective. Since 1970, the Depart- systems. The Bank’s Library Restrictions on investment limits ment has compiled an also falls under the Research to individual fnancial institu- extensive database of Department and has a staff tions also serve to diversify credit money and banking, bal- complement of two (2). risk; currency risk is mitigated, ance of payments, external A brief description of the as almost 100% of investments trade, government fnance, various sectors covered in are in US dollars; liquidity risk is public sector debt, and From left, front row: Latoya Smith, Sr. Research Officer; Sharon Branch, data analysis is as follows: controlled by having a tranche of real sector statistics. These Economist; Yvonne Cooper, Sr. Research Officer and Martiniqua Moxey, Monetary Accounts: investments in short-term instru- reports are published Research Officer cover trends in credit, liquid- ments—with levels informed in The Bank’s Monthly From left, back row: Carisma Tucker, Sr. Research Assistant; Andrea ity, money supply, interest through the use of weekly fore- Economic and Financial McQuay, Sr. Research Officer; Naddette Culmer, Research Officer and rates and net foreign assets. casts; and interest rate risk is Developments reports, Jamere McIntosh, Sr. Research Assistant Banking institutions are stat- minimized by having a signifcant Quarterly Economic Review utorily obligated to submit, segment of the portfolio in the (March, June, September to the Bank, daily, weekly, held-to-maturity bucket. and December), Quarterly monthly and quarterly data, Statistical Digest (February, on their assets and liabilities, Research Department May, August and Novem- from which trends in money Considered the “think tank” of the ber), the Annual Report and credit aggregates are Bank, the Research Department was and the Financial Stability produced and analyzed. formed in 1970 under the direction Report, on its website, and Balance of Payments of former Governor, Mr. William C. are widely distributed, both Accounts: record all trans- Allen, the frst Research Manager. locally and internation- actions between residents In the early years, the Department ally. In addition, daily and of The Bahamas and the rest beneftted tremendously from the weekly short-term internal of the world. It has three (3) contributions of the late Mr. M. L. reports are prepared on components; namely, the Ghosh who joined the Department, monetary developments for From left, front row: Deangela Ferguson, Sr. Statistical Assistant; external current account under the Technical Assistance in-house review, particu- Anthonique Hanna, Sr. Statistical Assistant; Kevin Armbrister, Statistician balance, which records Programme of the IMF, as Research larly the Bank’s Monetary and Peggy Winder, Statistician transactions between res- Director; the late Dr. H.M.H.A. Policy Committee. As part From left, back row: Shaniska Adderley, Statistical Officer; Jewel Pratt, Sr. idents and foreigners in van der Valk, Advisor to Governor of The Bahamas’ interna- Statistical Assistant; Serena Bethell, Sr. Statistical Officer and Vanya Dean, goods and services, and T. B. Donaldson, who initiated tional commitments, the Statistical Assistant unrequited transfers; the an in-house training course on Bank provides the Interna- capital account balance, at various regional conferences and research, and Mrs. Carlene Francis, tional Monetary Fund (IMF) with which provides summary statistics published in the Bank’s Quarterly who served as Research Manager. weekly and monthly domestic sta- on changes in the net foreign asset Reviews, regional and international The basic functions of the tistics for publication in the Inter- position of domestic residents, journals. Department are data collection, national Financial Statistics. Most of arising from transactions such as The Department also conducts collation, analysis and reporting— the Department’s data are compiled external borrowing or repayments, numerous surveys in the course to facilitate and support monetary, according to standards established foreign direct investment and short of its data collection activities, fnancial and economic policy deci- by the IMF for member countries. term capital movements; and mon- including the annual survey of the sion making; to aid the Bank in its The Department also plays a etary movements, which relate to domestic economic contribution provision of technical advice to the pivotal role in the advancement of changes in international reserves. of banks; a semi-annual survey, government and to provide general knowledge on the Bahamian econ- Fiscal Accounts: these report to measure banks’ external assets information to the public. Over the omy, through economic research on the operations of the govern- and liabilities by the country and years, the Department made sig- activities conducted by its staff, ment—through purchases of goods currency composition, introduced nifcant progress in expanding its for both internal and external use. and services, resource transfers, in 1984; and a comprehensive sur- economic and fnancial statistical Research areas have included bank- revenue-raising measures and vey on private pension/provident database, in conducting research ing sector liquidity, credit quality, fnancing decisions, which influ- funds, frst published in 1996. work and in the introduction of non-performing loans, debt sus- ence the level and growth of eco- The Department is divided into new systems and technologies that tainability, inflation, government nomic activity, the allocation of three (3) Units: Research (staff of have brought greater effciencies to debt and fscal policy. Some of these resources among different users 8), which is engaged in the analysis the work processes. Data reporting studies have been presented by staff and the distribution of income. 40th Anniversary 1974 -2014 June 10, 2014 23

The concept of an overall surplus various retail banking services. (ECS) was launched, using Manda- ans hold an interest, be designated or defcit is used to describe the The Unit also functions as the rin Oasis’ library cataloguing plat- resident or non-resident, depend- difference between total revenue secretariat to the National Pay- form, which allows the catalogue ing on where they will operate; and grants, and aggregate expendi- ments Committee (NPC), which to be automated and for expedited that all settlements and trusts be ture and net lending. Government’s was formalized in 2012, to act as online searches. designated for Exchange Control revenue and expenditure tables are an advisory body to the Bank on purposes; and that, in general, compiled in an accounting frame- the evolution of domestic pay- Exchange Control Department appropriate residential status work consistent with the Interna- ment systems, instruments and Exchange Controls are a set of rules, for individuals, frms and organ- tional Monetary Fund’s manual procedures. The NPC’s member- regulations and procedures govern- izations be conferred vis-à-vis on Government Finance Statistics ship comprises all clearing banks, ing all foreign currency transactions Exchange Control. The Regulations (GFS), which sets out an interna- other fnancial institutions, such between residents of The Bahamas also provide for specifc guidelines tionally accepted structure for pre- as credit unions, and major public and residents of foreign countries, affecting residents who emigrate. senting data in fscal operations. and private sector stakeholders in commonly referred to as non-res- In its efforts to facilitate the Real Sector: covers the col- the payments space. idents. Their legal basis is in the public, over the years, the Bank has lection of monthly, quarterly Exchange Control Act, 1952 and delegated certain powers to the and annual statistics on tourism, Library Unit the Exchange Control Regulations, major banks and trust companies prices, construction and unem- Having begun in 1975, as a small 1956. Over the years, exchange con- to act on its behalf. Commercial ployment, as applicable. As in the resource center with a few publica- trol policies have been adopted so Banks, which have “Authorized case of the government fnance tions dedicated specifcally for the as to preserve the country’s external Dealer” status, are empowered to statistics, the Bank is a secondary use of the Research Department, reserves and safeguard the balance conduct foreign currency transac- source of real sector data. the Library has developed into a of payments; maintain the fxed rate tions with residents of The Baha- key institutional unit—providing parity of the Bahamian Dollar with mas, thereby reducing the need Payments Unit the Bank, and the wider fnancial the United States Dollar; control for persons to come to the Bank The Central Bank, in its role of community, with information on expansion in the money supply, as for every transaction involving the ensuring fnancial stability, is the banking, fnancial and public well as speculation in the Bahamian purchase or sale of foreign cur- responsible for the oversight of a sectors and the economy at large. currency by non-residents, and rency. In addition, the Bank has sound, secure and effcient pay- The collection is the oldest, provide a sta- ments system. Commencing in most comprehensive, specialized tistical means 2004, the Bank spearheaded an collection of banking and fnance of monitoring initiative, along with clearing banks, material on the Bahamian econ- the flows of to modernize the payments sys- omy—comprising text and ref- foreign cur- tem in The Bahamas. In June 2010, erence material, such as reports, rency to/from the Bank established a Payments magazines, journals, documents The Bahamas. Unit in the Research Department and speeches. The Reg- to facilitate the monitoring and Responding to the increased ulations, as oversight of the country’s payments demand for the Library resources enforced by From left: Gerard Horton, Manager; Kimberly Thurston, Assistant Manager; Jacklyn systems. More specifcally, the Pay- by the staff, as well as the wider the Exchange Conyers, Sr. Assistant Manager; Deborah Barry, Assistant Manager and G. Marko ments Unit has a mandate to assist community, the Bank upgraded Control Chea, Deputy Manager in identifying and assessing any sys- the library facilities in 2004. With a Department, temic risk, ensuring effective gov- new look and a new location, the provide that ernance and enforcement of system Unit now provides easy access for all invest- rules, and acceptable levels of oper- Bank staff and others, in an open ments by ational and service effciency, trans- and inviting environment. Some of non-Baha- parency, and providing advice on the new features of the upgraded mians in the payments-related policy issues. In Library include research databases, domestic keeping with its oversight respon- such as EBSCO, Bankers Almanac, economy be sibility, the Unit works closely with IMF Publications, etc. The collec- approved and the clearing banks and the Bahamas tion also includes regional con- the resultant Automated Clearing House (BACH) ference papers (CEMLA, CCMF), currency flows to ensure the effcient functioning legislation and a growing number be recorded; of existing services. In its monitor- of audio visual materials in various that all Baha- ing activities, the Unit collects and formats. mian compa- analyses data on cheque clearing, Consistent with the growing nies (except Automated Teller Machines (ATMs), need for greater accessibility, the offshore From left, front row: Denise Ferguson, Exchange Control Officer; Sherrieann Cox, Sr. Point of Sale (POS) terminals, debit Bank has transformed the Library sector Inter- Exchange Control Officer and Duranda Minus, Exchange Control Officer and credit cards, debit and credit into an online information center, national Busi- From left, middle row: Cheryl Astwood-Fountain, Sr. Exchange Control Assistant and transfers, merchant accounts and connecting its users to information ness Compa- Theressa Thompson, Exchange Control Officer electronic banking, as well as tracks via technology. In November 2013, nies) in which From left, back row: Deborah Barry, Assistant Manager; Elton Gibson, Sr. Exchange fees levied by commercial banks on the Electronic Cataloguing System non-Bahami- Control Officer and Wendy Gilbert, Exchange Control Officer 24 June 10, 2014 Central Bank of The Bahamas designated certain banks and trust Counter operations, at both the and other companies as “Authorized Agents”, Nassau and Freeport locations, equipment are which permit them to act as depos- were offcially closed in April, 2010. properly main- itories for foreign securities of Another notable policy change was tained, and that residents and to conduct certain the harmonization of the current associated legal transactions in securities in respect account regimes for residents and and insurance of non-resident companies under temporary residents, such that requirements their management. The authority temporary residents are now able are appropri- delegated to Authorized Dealers to access the same facilities avail- ately assessed From left: Cleveland Brown, Sr. Maintenance Officer; Tammara Thomas, Assistant and Agents is set out in a series of able to residents for all foreign and met. Activi- Manager; Ian Fernander, Manager; Darlene Deveaux, Senior Officer and Julian administrative notices, which have currency transactions. ties also extend Fernander, Chief Maintenance Officer been revised from time to time, Over the years, considerable to providing to reflect changes in policy and attention has been focused on guidance and administration. Currently, there improving the operational eff- oversight of all are eight (8) Authorized Dealers ciency and effectiveness of the physical and and eleven (11) Authorized Agents administrative processes, includ- civil works operating in The Bahamas. ing, in 2008, the implementation conducted The Bank has always sought of electronic imaging, storage and at the Bank’s to examine the regime with a view retrieval of correspondence infor- various proper- to determining opportunities to mation. The efforts of a joint task ties. Oversight From left: Vanturi Campbell, Driver/Messenger; Machquel Outten, Messenger; simplify administrative processes force of Central Bank and commer- of the Bank’s Frederick Bowe, Messenger; Stephanie Green, Messenger and Theodore Williams, and achieve reasonable liberaliza- cial bank representatives, formed Numismatic Driver/Messenger tion, with due consideration to the in 2009, led to the elimination, in and Dormant management and staff interaction. economic context and the offcial 2010, of manual forms used by Account programmes once rested Building maintenance activities exchange rate policy. These have the public in applying for foreign with the Department, before being are accorded high priority among involved increased delegation to currency approvals; the stream- transferred to the Banking Depart- the Department’s responsibilities. banks, mainly through higher lim- lining of documents requirements ment in 2009 and 2012, respectively. In recent years, the Department’s its of delegated authority, obviating at commercial banks and money The Department provides team has directed major projects the need for persons to come to the transmission businesses (MTBs), important support for the Bank’s involving the rehabilitation of the Central Bank for approval. In 2006, and the corresponding electronic operations, through its manage- Bank’s electrical and communica- the initiatives focused on provid- capture and submission of for- ment of the logistical, cafeteria, tions infrastructure and its air-con- ing broader options for residents’ eign currency sales information receptionist and telephony services, ditioning systems. These, together investments abroad, including the to the Bank. The Department later and the procurement of offce sup- with ongoing works to maintain non-sponsored Bahamas Deposi- introduced the Exchange Control plies and other goods. Where the the building, have resulted in tary Receipt (BDR) programme in Web Reporting System (ECWRS), Bank has entered into various facil- greater energy cost effciencies. which BISX-listed broker/dealers to facilitate the on-line reporting ities management arrangements, Enterprise health and safety is structure and market BISX-traded of client foreign currency account the Department ensures that a core concern of the Department, domestic instruments backed by transactions by attorneys, account- services are delivered in accordance as it helps to ensure that the appro- foreign securities, for investment ants and licensed fnancial and with expectations, and the Bank’s priate policies and procedures by residents; an annual facility of corporate service providers. policies and procedures. are in place to promote a safe and up to $25.0 million to the National The Department is responsible conducive work environment. The Insurance Board (NIB) to acquire CORPORATE SERVICES for the upkeep of the Bank’s three Department is also closely involved high quality foreign assets in its Administration Department (3) historical and protected prop- in the Bank’s overall efforts to miti- investment portfolio at the offcial Until 2003, the functions of the erties: Balcony House, Verandah gate operational risk, by participat- rate of exchange; liberalization of Administration Department were House and Great House. Balcony ing in the coordination and main- credit facilities for temporary resi- being performed by the Human House is presently operated as a tenance of business continuity and dents; and enhanced opportunities Resources and Accounts Depart- period museum, through the sup- emergency response governance for non-Bahamian investments in ments, when the Bank decided to port of the Antiquities Museums arrangements. domestic debt and equity instru- centralize these expanding activities and Monuments Corporation, and Since the inception of the Bank’s ments. In the context of the 2006 into a separate organization unit, Verandah House accommodates Annual Art Competition and Exhi- liberalized measures, the Bank so as to achieve greater operational the Bahamas Institute of Financial bition, in 1984, the Department has also facilitated overseas portfolio effectiveness. Services. The Bank’s staff cafeteria overseen the hosting of this event, investments, through a reduction In its core functions, the Depart- is located at Great House, where held in the Bank’s gallery—which is in the premium and bid offer rates ment is responsible for ensuring the catering services team pro- also the venue for year-round exhi- for investment dollars, to 12.5% that all properties owned by the vides nutritional and affordable bitions by local artists. and 10.0%, from 25% and 20%, cuisine for the beneft of staff. This Bank, which include its buildings, Human Resource Department respectively. As a consequence arrangement also benefts the leased premises, vehicles, elec- An integral and signifcant element of the liberalization measures Bank’s overall effciency, as it pro- trical and air conditioning plants of the Bank’s development over the adopted, the Exchange Control motes enhanced lunch hour time 40th Anniversary 1974 -2014 June 10, 2014 25

(15) persons, respectively. In terms Today, the Department is struc- of gender distribution, females tured into three (3) major sections: accounted for 65% of the total, IT Administration, Systems Devel- while males made up the remain- opment and Records Management; ing 35%. Approximately 62% of the and its services fall under the Bank’s employees have been with following six (6) core areas: the institution in excess of 10 years. 1. IT Project and Portfolio Man- The Human Resources Depart- agement From left: Darnette Weir, Sr. Assistant; Michelle From left: Margo Major, Officer and Cyprianna ment aims to equip the Bank 2. Systems Design, Analysis and Swaby, Assistant Manager and Chanti Brown, Bethel, Deputy Manager with an adequate level of skilled Development Officer employees, ensuring that the 3. Systems Administration, Sup- organization is appropriately port, and Maintenance past forty (40) years has been the evolution of the Personnel Offce, which staffed to respond to new initi- 4. Records Management performed traditional functions of administration and compliance, into a atives and demands from inter- 5. User Support and Training full-fledged Human Resource Department designed to effectively sustain nal and/or external sources. The 6. IT Governance, Risk and Com- the human resources of the Bank. Department also seeks to achieve pliance Through various capacity building initiatives, employees are able and maintain a high level of Similar to other institutions, to develop their technical and professional skills for their current roles employee satisfaction and moti- the Bank has seen a phenomenal as well as prepare themselves for future growth and opportunities. For vation, by promoting excellence pace of new technology adoption, new recruits, the two-day Induction Training course is designed to orient through the Bank’s performance making signifcant investments them to the important policies and practices of the Bank, and provide management system, and provid- to maintain and upgrade its infra- exposure to the organization’s dynamics and employee relations matters. ing a dynamic and engaging work structure and introduce new External training programmes include seminars, workshops and environment to support the Bank’s services, aimed at improving oper- conferences; specialized courses at domestic, regional and international future growth. ational effciency and managing training institutions; and attachments and secondments to selected its risks. Through specifc projects accounting, fnancial and other supervisory and regulatory institutions. Information Technology Department and programmes, the Department, Employees have been able to avail themselves of the many capacity Over the past forty (40) years, the along with the Information Secu- building opportunities through agencies such as the Federal Reserve Central Bank has increasingly lever- rity Offcer, continuously works to System, International Monetary Fund (IMF), Bank for International aged information technology (IT), enhance and harden information Settlement (BIS), Caribbean Regional Technical Assistance Central to support its mandate and mission. security controls and governance. (CARTAC), Centre for Latin American Monetary Studies (CEMLA), World Initially established in 1980 under There are ongoing internal and Bank, Federal Reserve Bank of New York, CARICOM Secretariat, Salomon the Accounts Department, the then external assessments of the effec- Smith Barney, Crown Agents, Bank of England, the Swiss National Bank, Computer Section was upgraded tiveness of the Bank’s security Inter-American Development Bank (IDB) and Caribbean Centre for to a full-fledged Department in practices, and any shortcomings Money and Finance (CCMF). 1986. The Department consisted of are addressed through formal pro- In 1974, when the Central Bank was established, the staff comple- a Manager, Deputy Manager and jects and initiatives. The business ment totaled 51, inclusive of the Governor, Deputy Governor and six (6) three (3) staff members. case for any technology investment senior management offcials. Over the years, as the operational remit of In its formative years of opera- is thoroughly considered to ensure the Bank broadened, the staff complement has expanded, to stand at 239 tion, the Bank acquired the Bur- that all systems deliver on business at end-April, 2014 (see Table 1). Of this total, eighty-two (82) were tech- roughs L5352 Ledger Machine, objectives—a process that contin- nical/professional and ninety-four (94) were support staff, with middle which provided basic accounting and executive management accounting for forty-eight (48) and ffteen services to the Accounts and Bank- Table 1: Staff Complement (as at end-April, 2014) ing Departments. As transaction volumes increased beyond the Departments/Units Total Management Non-Management machine’s capacity, it was replaced, Accounts 10 3 7 in 1978, by the Burroughs B80; in Administration 25 3 22 1983, by the Burroughs B1955, and Banking 24 4 20 then by the IBM AS/400 in 1991. Bank Supervision 68 25 43 Two years earlier, the Bank intro- Internal Audit 3 1 2 duced personal computers (PC), Information Technology 16 5 11 ushering in the era of client server Exchange Control 26 6 20 networking. From left, front row: Margo Gibbs, System Adminis- Following an extensive review Governor’s Office 7 3 4 trator; Donna Mortimer, System Administrator and of its IT needs and requirements in Human Resources 8 3 5 Anastasius Clarke, IT Specialist 2004, the Bank offcially changed From left, middle row: Cynara Clarke, System Legal Unit 5 3 2 the Department’s name to the Administrator and Spacy Gibson, Sr. System Research 24 5 19 Information Technology Depart- Administrator Security 23 2 21 ment—better reflecting the evolv- From left, back row: Luther Smith, Deputy Manager Total 239 63 176 ing scope of services offered. 26 June 10, 2014 Central Bank of The Bahamas ues to be reviewed and enhanced. Bank commenced an exercise to ing throughout the Bank and tric manner. Similarly, the Bank maintains upgrade its existing legacy appli- is expected to be substantially The Security Unit enforces ongoing investments towards cations to support browser-based completed by end-2014. compliance with the rules and ensuring the robustness of its net- clients and requiring this availabil- • Completion of a secondary data regulations of the Bank in the areas work and security infrastructure ity in new acquisitions. center for disaster recovery and of access controls, through its 24x7 and systems, through routine and As recently as 2012, the Bank business resiliency. operations, and oversight of the regular system upgrades, enhance- concluded or commenced several • Implementation of a new Bank’s physical assets, which is ments and acquisitions. signifcant software and equip- online data capture and com- enhanced through the use of CCTV The Department continues to ment acquisitions, upgrades prehensive reporting solution and alarm monitoring. Given the focus on increasing productivity and application development, to for supervisory, research and broader national security context through consolidating and stand- support greater business resiliency analytics, anticipated to be com- of the Bank’s operations, the Bank ardizing its IT infrastructure. An and operational effciency. Initia- pleted by end-2014. maintains close collaboration with integrated platform provides a tives undertaken covered: • Business process re-engineering, the Police Department in its secu- consistent and effcient experience • Upgrades to the Electronic process automation and ongoing rity arrangements. for internal and external users and Document Management System application enhancements. Apart from its core security sur- customers; reduces complexity (EDMS), and the integration of veillance activities, the Unit plays and is easier to replicate in other document imaging with various Security Unit a major role in the Bank’s business operations. To this end, in 2007, the applications throughout the A safe environment is fundamental continuity planning and incident Bank adopted Blade and central- Bank. to the Central Bank’s performance and emergency response manage- ized storage area network (SAN) • Upgrade to the SWIFT fnancial of its functions. From the inception ment; conducts related inspections technologies and implemented and Real-Time Gross Settlement of the Bank’s operations, a cadre of and risk assessments of the envi- virtualization, aimed at reducing (RTGS) systems. dedicated security offcers has car- ronment and devises risk mitiga- hardware footprint and maximiz- • Completion of the digitization ried out their primary role of pro- tion strategies. The Unit seeks to ing usage of equipment. The Bank of physical records within the tecting the Bank’s properties and maintain the readiness of the Bank has also standardized, where pos- Exchange Control Department staff, by adhering to high standards in these areas by organizing annual sible, its server operating system, and Governor’s Offce, thereby of conduct and code of ethics in certifcation exercises for security database and application integra- enabling all fles to be retrieved their work. As the frst point of con- personnel and incident wardens, in tion technologies, servers, PCs and electronically. A similar back tact to the Bank’s business, security fre safety and basic frst aid. networking equipment. Of late, the fle scanning exercise is ongo- offcers aim to provide their service in a professional and customer-cen-

From left: Angelo Smith, Programmer; Karyn Barry, Sr. Programme; Charles McKenzie, Deputy From left: James Bodie; Carl Bastian; Vincent Hawkins; John Ferguson, Chief Security Officer; Christopher Knowles; Manager; Monique Rolle-Cox, Programmer and Patrick Reid-Hepburn, Sr. Programmer Mark Major; Floyd McKenzie; Edwin Thompson and Gregory Fernander

closely interwoven into the sum and it continues to be highly OUR total experience of the Bank, as anticipated by retirees, because it exists today. of the opportunity it provides for LEGENDS An important avenue used renewing friendships and shar- Any organization will only go as by the Bank to express its ing experiences of retirement life. far as the people who are driving appreciation to the retirees is the On the occasion of our it! Annual Thanksgiving Luncheon, 40th Anniversary, the Bank Over the past forty (40) launched in November 2004. recognizes and extends heart years, the Central Bank has While the initial luncheon was felt appreciation to these fore- been privileged to benefit from held in the Bank’s Great House runners, for their many years of the contribution of its past Cafeteria, this venue soon dedicated service, and remem- employees who, through their proved too small, owing to the bers in a special way those who skill sets, dedication and fore- increased number of retirees and have passed away. sight, have navigated the insti- the excellent participation. Since Retirees, we continue to tution through many challenges then, the luncheon has been stand on your shoulders, cele- and opportunities. Their work is held at a downtown restaurant, brate you, and wish you well! 40th Anniversary 1974 -2014 June 10, 2014 27 Messages from Regional Central Banks

continued success in your future endeavors.

Charles Castel The Centrale Bank van Aruba Dear Governor Craig, salutes its esteemed colleagues of I am greatly honoured to the Central Bank of The Bahamas extend these few words of congrat- on this special occasion commem- ulations and well wishes from the orating its 40th anniversary. We are Central Bank of Belize. honored to have had the opportu- The Central Bank of The nity and privilege to engage with Bahamas has successfully met the Dear Governor Craig, your staff on numerous occasions challanges encountered over the The Central Bank of Haiti feels to explore various areas of mutual last 40 years through dedicated, particularly honored to be associ- interest. We wish you a very joyous consistent and innovative lead- ated with the celebrations of the celebration of your 40th anniver- ership, and a steadfast commit- 40th Anniversary of the Central sary and look forward to continue ment to regional collaboration. Bank of The Bahamas. our fruitful exchange of experience It has thus been instrumental in Our two institutions have and expertise for many more years On behalf of the Central Bank making The Bahamas a flagship developed quite close relationships to come. of Trinidad and Tobago, I extend jurisdiction. We now join the rest over the years, particularly through J.R. Semeleer the regular bi-annual CARICOM warm congratulations to my col- of the Caribbean and the world in President Central Bank Governors Meetings league, Governor Wendy Craigg, on congratulating the Central Bank where views and experiences are the occasion of the 40th anniver- of The Bahamas for all the hard shared particularly on monetary sary of the founding of the Central work and enduring commitment to and fnancial matters relevant to Bank of The Bahamas. This is an fnancial and economic transfor- the Caribbean economies. important milestone in the Bank’s mation, both at home and across We have watched how well the history, and it is an achievement CARICOM. Central Bank of The Bahamas has of which you, your entire staff and Our warmest congratulations managed the exchange rate peg your country can be truly proud. to you and your staff in reaching as to minimize negative internal On June 1, 1974, The Bahamas this milestone! shocks effects, preserve economic entered a new stage in its monetary competitiveness, rein in inflation development when the Central The Central Bank of Barbados Sincerely, and maintain a stable real effective Bank was established by an Act of extends warmest congratulations to Glenford Ysaguirre exchange rate. Parliament, as the successor to The the Central Bank of the Bahamas on Governor The Central Bank of Haiti hopes Bahamas Monetary Authority. reaching its 40th anniversary. The that prudent fscal policies and the In acting as a “banker to banks Central Bank of The Bahamas has world economic recovery will allow and to Government”, working to from inception operated with pro- the Central Bank of The Baha- maintain monetary stability for fessional effciency and integrity, mas to stay the course so that the the betterment of the national standards for which you are held in domestic economy and employ- economy and the people of The high esteem among your colleagues ment can grow faster over the Bahamas, and operating to ensure in the region. Your Bank has joined medium term. The Eastern Caribbean Central a sound fnancial system, you have with our colleagues throughout the Your performance has been out- Bank is pleased to extend congrat- continued to carry out the man- region to create lasting bonds at standing despite a changing global ulations to the Central Bank of The date set out 40 years ago. At the all levels of staff and in all areas of economic environment, the emer- Bahamas on reaching this forty-year same time you have shown the Central Bank operations and activ- gence of new risks for small and milestone in its history. flexibility and imagination needed ity across the Caribbean. We have fragile states, and the 2008 world We congratulate in particular all to weather the challenges that face built over the years a network of economic crisis. those whose work and dedication central banks in the Caribbean, and professional colleagues and friends I therefore feel honored to be have ensured the success of the indeed, globally. that is the envy of many, and a associated with this celebratory central bank in fulflling its man- We join you in celebrating your leading example and inspiration event and I would like to take the date over the years and wish your 40th birthday and look forward to for Caribbean integration and the opportunity to present my sincerest management and staff many more continue working with you as Car- growth of the Caribbean nation. congratulations on behalf of the years of success serving the people ibbean colleagues. Board of the Banque de la Repub- of The Bahamas. lique d’Haiti. Dr DeLisle Worrell Jwala Rambarran Governor I extend my congratulations Hon Sir K. Dwight Venner, Governor Central Bank of Barbados to your entire staff and I wish you Eastern Caribbean Central Bank Central Bank of Trinidad & Tobago 28 June 10, 2014 Central Bank of The Bahamas Messages from the Banking Community to acknowledge and recognize the leadership and guidance that the Central Bank has provided to the On behalf of our members, “Fidelity Bank (Bahamas) Lim- region’s fnancial service sectors, the Association of International ited congratulates the Central Bank shaping the development of its Banks and Trust Companies, extend of The Bahamas as it celebrates 40 regulatory framework and fueling warmest congratulations to The years of operating with superior its advancement. Central Bank of The Bahamas on its levels of integrity and leadership. We salute and congratulate the 40th Anniversary. We value the Central Bank’s role of Governors, Boards of Directors, Indeed, it cannot be denied ensuring monetary stability and management and staff of the Cen- that the Central Bank has achieved fostering a sound fnancial system tral Bank of The Bahamas, past and tremendous successes in its over- in The Bahamas, and extend thanks present, for an impressive four dec- sight of the regulatory framework for the support that it has provided ades. You are to be commended for for banks and trust companies and in Fidelity’s 36 years of operation. stimulating investor, consumer and the monetary and fscal policies of We wish the Central Bank every stakeholder confdence through The Bahamas that have made us success on this milestone anniver- consistent and relevant regulation, the envy of the region. The indus- sary” currency reliability and economic try is proud of our association and stability. We anticipate a continu- the consultative approach that ance of the superlative standards embody policy developments and that are synonymous with our the openness afforded the industry Central Bank and anticipate a sus- to contribute to advancements in During its 40 year of existence, tained mutually benefcial part- policy and product development. the Central Bank of The Bahamas nership between Scotiabank and In this fast changing world, has created an excellent frame- The Central Bank of The Bahamas. where having the latest knowledge work for the local fnancial services Congratulations! and skills are crucial for us to stay industry to thrive and be success- relevant, the proactive measures ful. The industry’s proftability and Sean N. Albert, undertaken by the Central Bank, prosperity and Scotiabank’s ability Managing Director, supported by its professional and to contribute to the development of Scotiabank (Bahamas) Ltd. dedicated team in adopting new the Bahamian economy and society approaches and introducing best are inextricably linked to the Cen- practice methodologies, are always tral Bank’s exceptional operational noticeable and acknowledged. After standards. We salute the Central 40 years in existence and its contin- Bank for its role in the growth and uing commitment to excellence, we success of the Bahamian fnancial look forward with excitement and sector over the past 40 years, by Dear Governor, anticipation to numerous years of diligently working to safeguard the Congratulations to The Central steadfast world-class leadership by parity between the U.S. and Baha- Bank of The Bahamas on achieving The Central Bank of The Bahamas. mian dollars and insisting on a this signifcant milestone anniver- compliant banking sector. sary. Your institution has had a stra- Antoinette Russell, Chairman On the occasion of their 40th Anniversary Scotiabank has had the pleas- tegic role in the management and CIBC FirstCaribbean congratulates regulation of the Bahamian econ- BOB (Bank ure of operating in The Bahamas The Central Bank of The Bahamas omy thereby facilitating and proof The Bahamas and contributing to its progress moting a reputable and sustainable Limited) con- and national development for fnancial services sector. The lead- gratulates The more than half a century. Since Central Bank of The Bahamas on 40 the opening of our frst branch in ership of the bank and its profes- years of exemplary achievement in 1956, we have grown to 20 branches sional staff are to be commended promoting monetary stability and conveniently located across the for the role they have played. orderly economic development in archipelago. We are completely On behalf of the management The Bahamas. We acknowledge the mindful that our corporate goals and staff of Citi Bahamas, we wish signifcant role of The Central Bank and objectives are only realized you and your employees all the best in the oversight and growth of The through a collaborative and com- as you celebrate your 40th anniversary. “On your 40th anniversary, we celebrate your Bahamas’ Financial Services indus- pliant relationship with the Central contribution to the growth and stability of the financial system in the Bahamas try and applaud the high ethical Bank of The Bahamas. The guid- and wish you continued success” standards and professionalism with ance provided by the bank enables Yours sincerely, - Mrs. Marie Rodland-Allen, Managing Director – Bahamas & TCI which this key Bahamian institu- us to remain competitive while Margaret Butler Citi Country Offcer www.cibcfcib.com tion continues to execute its mis- abiding by local and international The CIBC logo is a trademark of Canadian Imperial Bank of Commerce, used by FirstCaribbean International Bank under license. sion. banking regulations. We also wish