The Central Bank of Barbados must operate as an independent institution working in the best interest of the people, Minister in the Ministry of Finance Ryan Straughn declared in Parliament today.
“The Central Bank is critical to the maintenance of order and stability. Central banks communicate with the public and certainly in the past the public would have regarded the central bank through its governor communicating confidence. That confidence was built on the idea that the bank was looking out for them.”
It was the Central Bank’s first governor, Sir Courtney Blackman, who was declared his position “a creature of the Prime minister”, setting the central bank apart from some of its counterparts in its role in setting monetary policy.
While only the board of the Central Bank is politically appointed, successive administrations have sought governors who would be more closely aligned with its policy stances, and have been hostile towards governors who criticise the Government of the day.
But Straughn said that while that the Central Bank must operate as an independent entity, it must also be self-sufficient.
“Their independence is driven by the fact that if you want independence you cannot be coming to Government for money. Therefore it means you have to run your affairs in a way that you don’t come to the Government or taxpayers for money when you find yourself in trouble.
“There is a cost to independence and the reality is the financing of the bank and the operations of the bank must be done in manner that does not require it in the future to come to the Government or to any Government for financing. The bank experienced some losses
in the last few years which is mind
boggling. Central banks typically do not incur losses.”
The economist said Government had done much already to pull the central bank out of the state it was in when it came to office.
He told fellow lawmakers: “Throughout this debt restructuring we would have written off the $2 billion in treasury bills that were on the books of the Central Bank. Like any other institution it requires certainty in order to be able to manage its own affairs. The Central Bank must oversee the financial regulations of the country on a firm financial footing.”
Straughn said never again should the Central Bank be used to finance Government without some level of oversight.
“The Central Bank plays a critical role in the management of a society. Under a previous dispensation the Central Bank found itself aiding and abetting the previous administration in creating a situation where the fiscal management was in question.
“Its own credibility was in question. The Treasury was helping to finance Government expenditure and taking the country in a direction contrary to its mandate.”
The Last Central Bank Governor was a Yard Fowl and a Political pimp who lied to the people of Barbados repeatedly and paid no price. Continued to print 65 million dollars every month to fund the Public Service and prop up the Government.only when the threat of devaluation of the Barbados Dollar loomed did he stand up to the Finance Minister and was fired. Then he sounded the alarm when the Suck hole that he created and left behind forced the Newly Elected Government to seek IMF immediately leaving it absolutely no other options available. Our Central Bank is an instrument of the Government and the Governor serves at the pleasure of the Government and enjoys little or no independence. Dream on Mr Straughn.Wishfull thinking .Thank God the the Country now has a competent Leader, Prime Minister and Finance Minister making the Decisions.
Jerry lost me in his submission. Your last line beginning at Thank God, it squashed your argument.
Straughn is all talk, like the rest of the fat cats, playing to the supporters.
I see your point Mr Minister but for it to work it must be totally independent of government interference not partially. It’s like being half pregnant in that neither can exist in reality. I also agree that their is no reason for a central bank to lose money when all of its transactions are surplus generating. The most embarrassing thing is that you have a governor who was advising people how to be prudent and he could not even balance his own books with a positive result. The reality is the central bank should only be allowed to run a small overdraft for lack of a better word and nothing more. The same way sir you say the central bank must stand on its own feet well government must also do the same. The days of coming to the central bank and NIS also has to stop. You can’t have one rule for them and another for government. Let everybody keep out each other pockets going forward!
My 9 year old Grand daughter speaks better than this economic terrorist/Yard duck/ Lapdog
Government needs to stop living off the backs of the poor people and spread the debt of Barbados over ALL the classes including themselves. We ALL live in Barbados but there are some who are riding off the backs of others and not feeling the pinch as the poor who have the least money are propping up Governement, Businesses and the bloody elite.
All of us should be feeling the pinch especially those that make thousands Dollars in Barbados and just take and not give back nothing to Society. The poor’s eyes are well and truly open and those in power need to be accountable for the plight that Barbados is in….The DLP and the BLP are the reason Barbados is steeped in this current mess, PERIOD !!