What is Central Bank of the Bahamas (CBB)? Central Bank of the Bahamas (CBB) Review, Features

The Central Bank of the Bahamas (CBB) was established on June 1, 1974 to carry out the independent monetary policy and financial sector supervision functions conferred upon The Bahamas following its political independence from the United Kingdom in 1973.

About the Central Bank of the Bahamas (CBB)

• The full scope of monetary policy is set out in the Central Bank of the Bahamas Act, 1974, which has now been replaced by the Central Bank of the Bahamas Act, 2000. The Bank is therefore responsible for promoting and maintaining monetary stability and credit and balance of payments conditions conducive to the orderly development of the economy; promoting and maintaining an adequate banking system and high standards of conduct and regulation therein; and advising the Minister of Finance on any matter of a financial or monetary nature.
• Furthermore, one of the Bank's main objectives is to safeguard the external value of the Bahamian dollar, which is fixed at a 1:1 parity with the U.S. dollar. The responsibility for administering the Exchange Control Regulations rests solely with the Central Bank of the Bahamas, which maintains the country's foreign exchange reserves. The administration of exchange controls has been significantly relaxed over the years, characterized by annual increases in foreign currency allowances for residents and increased approval powers for commercial banks.
• Central banks fulfil their traditional roles as issuers of legal tender, bankers to domestic banks and governments, and regulators and supervisors of the banking industry. As supervisors of banks, central banks promote the soundness of banks through the effective application of international regulatory and supervisory standards. These standards were comprehensively revised during 2000 and 2001 in response to global multilateral initiatives to strengthen the fight against money laundering and other criminal abuses within the international financial system.
• These results are evident in the Bank's approach to licensing new financial institutions, as well as in strengthening the supervisory framework for financial institutions. Important features of the new regulatory regime now include broader and more unified supervision of both banking and non-bank financial activities, and stronger international cooperation mechanisms between The Bahamas and similarly situated foreign supervisory and enforcement agencies. In summary, the Bank's overall policy objective is to promote a stable economic environment conducive to high levels of domestic production, employment, and growth.

Central Bank of the Bahamas (CBB) Strategic Objectives

Goal 1

Effective Monetary Policy - Pursue strategies to improve forward-looking economic policy research and analysis through economic forecasts; strengthen the operational framework for conducting monetary policy; expand research and data dissemination and communication; and enhance coordination between fiscal and monetary policies.

Goal 2

Safety and Soundness of the Financial System – Pursuing strategies to maintain the integrity and effectiveness of the legal and supervisory systems; ensuring compliance with international standards; strengthening the banking and trust sectors; and reducing risks through crisis preparedness arrangements.

Goal 3

Effective contribution to economic policy-making - conducting economic research as input to policy development and participating in national advisory committees.

Goal 4

Secure, efficient and modern payment systems - Implementing comprehensive oversight mechanisms to mitigate risks and ensure the availability of market infrastructure that enables services to the public.

Goal 5

Prudent foreign exchange management - Effective management of external reserves and administration of exchange controls.

Goal 6

Business Efficiency – Continuously enhance risk management processes in areas such as internal controls, human resource development and succession planning; implement strong information systems and business continuity arrangements and effective facilities management.

Task

Create a monetary stability environment that is conducive to economic development and ensure a stable and sound financial system.