Both Sides of The Coin: The Story of The Central Bank of Barbados 1972-2017

8 and Planning, Errol Barrow, made the first official public reference to the proposed central bank during his Financial Statement and Budgetary Proposals. 8 Barrow confirmed that his discomfort with the weakness of sterling had influenced Cabinet’s decision. By this time any hope of establishing a central bank to serve Barbados and the other English-speaking islands had evaporated. However, Barrow went on to explain that (for the time being) the ECCA would continue to perform currency-issuing functions for Barbados but would be encouraged to develop “central banking powers” in the other participating territories and work closely with the new Central Bank of Barbados. Soon after the prime minister’s announcement, G.E. Hall, an adviser from the Bank of England, arrived in Barbados to conduct a study of, and report on, the implications of setting up the Central Bank. One of Hall's first challenges was how to deal with the Barbados Government's stipulation that, in the interest of regional cooperation, the ECCA should continue to issue currency for Barbados. His comprehensive report, which was submitted in September 1969, stated that, “This proposition poses some unusual technical problems and leaves the Central Bank without what is normally regarded as one of its most important powers.” He pointed out that the absence of currency-issuing responsibilities could hamper the efficient conduct of monetary policy by the new institution. Hall was also of the opinion that the issue of a new currency gave a new central bank “...life and identity and gains for it the initial public support and interest...” However, he conceded that a central bank without issue powers could, nonetheless, contribute to the country's development by, among other things, providing leadership for the banking system, acting as financial adviser to Government and helping to promote financial markets. Prime Minister Errol Barrow.