Banking and Finance
The Central Bank of Barbados (CBB) was created in 1972 to
assist the government in stabilizing the economy by facilitating
development and financial intermediation (see Glossary). Since
1972, Barbados has minted its own Barbadian dollar, which has been
pegged to the United States dollar at a rate of B$2.00 to US$1.00.
The government created the CBB for numerous reasons, all
related to gaining more control over domestic and international
financial intermediation. Paramount to maintaining financial
stability was Barbados' new-found control over its money supply.
Unlike other Eastern Caribbean states, which were dependent on a
regional financial institution for central governance of the
monetary system, Barbados was capable of establishing its own
monetary program to supplement fiscal policy in meeting national
Financial priorities were also advanced by the Barbados
Development Bank, which was created in 1963. It functioned as an
independent corporation designed to facilitate development by
encouraging domestic savings and investment and providing loans to
development enterprises, cooperatives, and small businesses. It was
also empowered to issue its own securities to ensure sufficient
funding to meet development needs. In 1985 it reemphasized its
effort to assist the small manufacturing sector, which had failed
to expand significantly during the previous year.
In the mid-1980s, Barbados was also served by numerous local
banks and seven foreign commercial institutions. In addition, it
was the headquarters for the Caribbean Development Bank (CDB),
which acted as a conduit for multilateral lending arrangements.
Data as of November 1987