Economist Ryan Straughn has expressed concern that the Central Bank of Barbados has recorded a massive loss for $3.7 million last year.
Straughn told Barbados TODAY, in his estimation, it was not a good sign, especially since that institution provides advice to Government.
“For one who is supposed to be advising the Government, when I read the release this morning they made some reference to trying to contain expenditure over the medium term, that sounded very much like the Government’s problem. And so I am very concerned about the fact that the Central Bank has found itself in a position where it too cannot contain its expenditure,” said Straughn.
A highlight of its 2013 annual report, which the bank said it had submitted to the Minister of Finance on March 31, as required by law, was that the bank was reviewing options to contain expenditure over the medium term.
The report said despite the loss, the bank’s operating costs were largely unchanged, but the continuing weak investment climate for the lorisk securities that the Bank was permitted to hold, continued to depress income.
Straughn said the loss was more worrying given the International Monetary Fund (IMF) report earlier this year following the Article IV Consultation with Barbados.
“It is definitely not a good sign for the bank, the Government or the country because the Central Bank has to be able to, at all times, demonstrate a level of financial prudence.
“To my mind there haven’t been any emergencies that would cause the Bank to make a loss. And so it must mean that something fundamentally has gone wrong with the management of the Bank to cause all this, just like the Government, which is a problem,” added Straughn.
He added that while it did not necessarily mean the institution was not doing its regulatory services, there were clearly lots of issues.
Meanwhile, president of the Barbados Economic Society (BES), Jeremy Stephen, told Barbados TODAY that while he was not aware of the details regarding the loss.
Stephen said given his limited knowledge at present as to details of the Central Bank’s 2013 annual report, he could not say if the printing of money was also a contributor to the bank recording to over $3 million loss for 2013.