Eastern Caribbean Central Bank
To maintain the stability of the EC dollar and the integrity of the banking system in order to facilitate the balanced growth and development of member states.
The Eastern Caribbean Central Bank was established in October 1983. It is the Monetary Authority for a group of eight island economies namely - Anguilla, Antigua and Barbuda, Commonwealth of Dominica, Grenada, Montserrat, St Kitts and Nevis, St Lucia, and St Vincent and the Grenadines.
The issuance of a single common currency, the flow of which is unrestricted among its members.
A common pool of foreign exchange reserves; and
The existence of a Central Monetary Authority which decides on the Union's monetary policy.
To regulate the availability of money and credit.
To promote and maintain monetary stability
To promote credit and exchange conditions and a sound financial structure conducive to the balanced growth and development of the economies of the territories of the Participating Governments.
To actively promote through means consistent with its other objectives the economic development of the territories of the Participating Governments
The governing bodies of the Eastern Caribbean Central Bank are the Monetary Council and the Board of Directors. The Monetary Council is the highest decision making authority. It is comprised of one Minister appointed by each Government of the participating countries. The function of the Council is to provide directives and guidelines on matters of monetary and credit policy to the Bank. The Board of Directors is comprised of ten Directors - the Governor and Deputy Governor, and one Director appointed by each Government of the eight participating countries. The Board of Directors is responsible for policy and general administration of the Bank, while the Governor, the Chief Executive, is responsible for the day-to-day management and operations.
The Peg and the Strength of the EC Dollar
What is Currency Pegging?
Currency pegging simply means that a country fixes the exchange rate of its currency to the currency of another country. In the case of the Eastern Caribbean Currency Union, the EC dollar has been fixed to the US dollar at a rate of EC$2.70 to US$1.00 since 1976. Prior to this the EC currency was fixed to the pound sterling at an exchange rate of EC$4.80 to £1.00. However, following the sterling’s depreciation (decline in value) in the 1970’s, the decision was made to shift the peg to the US dollar. Any decision to alter the peg of the EC currency rests with the Monetary Council, the highest decision body of the Eastern Caribbean Central Bank (ECCB).
Implications of the Peg
The pegging of the EC currency to the US currency implies that when the value of the US dollar fluctuates relative to other currencies, the EC dollar undergoes a similar fluctuation in value relative to other currencies. Let us take for example the case of the pound sterling. During the first and second weeks of February 2004, reports indicated that the pound sterling appreciated (rose in value) against the US dollar. The actual rate moved from US$1.8477 to £1.00 on February 6th 2004 to US$1.88852 to £1.00 on February 13th 2004. Similarly the EC dollar moved from a rate of EC$4.9888 to £1.00 to a rate of EC$5.09000 to £1.00 over the same period.
In this scenario, where the pound sterling rises in value against the US dollar and by extension against the EC dollar, it means that citizens of the Eastern Caribbean Currency Union (ECCU) would benefit if they were in receipt of the pounds and were able to convert them to EC dollars at the higher exchange rate. Additionally, receipts from ECCU export denominated in pound sterling would upon conversion into EC dollars, be larger. On the flip side however, persons who have to convert EC dollars to pounds to pay, for example, college tuition in the UK, or ECCU member governments who have to repay loans denominated in pound sterling would be at a disadvantage. This is because it would require more EC dollars to purchase the required amount of pound sterling.
Rationale for the Peg
In the case of the ECCU, the rationale for pegging the EC currency to the US currency is the fact that most of the external trade and financial (capital) flows are carried out with the United States. When the region engages in US$ denominated transactions, whether trade or credit (loans), the peg eliminates uncertainty in the prices of goods and services and the value of debts due to fluctuates in the value of the currency. Simply put, the US dollar acts as an anchor for the EC dollar. Moreover, by providing certainty as to the value of the EC dollar relative to the US dollar, the pegging of the EC currency allows confidence in the currency of the region. Confidence in the EC dollar, has also been a significant deter-rent to capital flight and to a preference for the holding of foreign currency over the EC currency.
Other Exchange Rate Regimes
The opposite of a fixed exchange rate regime is a flexible exchange rate regime. Such flexibility can range from a “free floating currency” regime where the value of the currency fluctuates according to market forces to a managed float” that permits the value of the currency to move within a set range. In a free-floating currency regime, the prices of imported goods as well as local goods requiring inputs will most likely fluctuate in tandem with, but in the opposite direction to, the changes in the value of the local currency. In such a scenario, the consumer will have to continuously reassess the amount of goods and services that his wages can provide.
The EC dollar fixed exchange regime, with the EC currency pegged to the US dollar at a rate of EC$2.70 to US$1.00, has served the region well. The region has historically enjoyed a relatively low rate of inflation, incremental improvements in the standard of living for its people and economic stability.
(Barclays History in the Caribbean)http://www.firstcaribbeanbank.com/index.php?page=st-kitts-nevis
The early decades of the nineteenth century saw the establishment of the first joint stock banking companies in England, providing greater resources and security for shareholders and customers. Against this background, and the favourable economic conditions in both England and the West Indies, a group of merchants and bankers in London decided to establish a bank to operate in the West Indies.
A Royal Charter to establish this bank, with the name The Colonial Bank, was granted on 1 June 1836, and the following May offices were opened across the Caribbean, commencing with offices in Barbados, Trinidad and British Guiana, and continuing later in 1837 with representation in St Lucia, Grenada, Antigua, Dominica, St Kitts, St Vincent, the Danish Virgins and Kingston, Jamaica.
1840 to 1950
Throughout much of the nineteenth century, the Colonial Bank operated as a virtual monopoly in the Caribbean, with the only serious competition being from the West India Bank in the 1840s. The spread of representation across the Caribbean islands provided a degree of resilience to local economic circumstances, and the Colonial Bank proved to be a commercial success.
There were few changes for the Colonial Bank over the first hundred years of its existence. The economy of the West Indies remained based on primary production, with sugar of overwhelming importance, and the Bank's business remained what it had always been - financing agriculture and trade. In most countries it was also banker to the Government.
1950 to 1980
For the Colonial Bank, now known as Barclays Bank, the pace of change became perceptible from the 1950s, when George Gilbert Money arrived to head the Caribbean region from headquarters in … Barbados. At that stage, all clerical staff were white, although a few coloured clerical staff had been engaged in Jamaica and British Honduras (Belize). George Money immediately began the practice of hiring suitable people without regard to colour, a policy started by Barclays and followed two or three years later by the rest of the region's banks.
1980 to 2001
The 1980s saw banks in the Caribbean being computerised, and Barclays branches changed from the traditional mechanical and electronic accounting machines to being fully computerised. Barclays was the market leader in the provision of credit card services, and introduced the first Automated Teller Machines (ATMs), linking these in to the worldwide credit card network providing great benefit and convenience for tourists wishing to obtain cash advances.
On July 23, 2001 Barclays and CIBC announced that they were in advanced discussions which were intended to lead to the combination of their retail, corporate and offshore banking operations in the Caribbean to create FirstCaribbean International Bank™. Implementation of the combination would be subject to required approvals from government and regulatory authorities.
On October 31, 2001 Barclays Bank PLC and Canadian Imperial Bank of Commerce reached agreement to combine Caribbean operations to establish FirstCaribbean International Bank™
With over 150 years of representation in the Caribbean, Barclays has a long history to look back on. Its past success is demonstrated by the fact that we have remained the largest bank in all its original countries with just three exceptions, Jamaica, Trinidad and Guyana, where they no longer have branch representation. To accomplish this, and to continue to do so, they provided a wide range of services, some traditional, some new.
As well as continuing to serve the local population and industries, in recent years Barclays has worked with other local professionals and the regional governments to fashion the offshore finance industry of the region. To support this, we have established dedicated offshore banking centres in five Caribbean territories, Barbados, the Bahamas, the British Virgin Islands, the Cayman Islands and the Turks and Caicos Islands.
On 22 December 2006, CIBC acquired Barclays stake and became the majority shareholder in FirstCaribbean.
FirstCaribbean is a major Caribbean bank offering a full range of market-leading financial services in Corporate Banking, Retail Banking, Wealth Management, Credit Cards, Treasury and Capital Markets. It is the largest, regionally-listed bank in the English-speaking Caribbean, with assets of over US$12 billion and market capitalisation of US$3 billion. The Bank has over 3,500 staff; over 100 branches, banking centres, and offices in 17 regional markets, serving 800,000 active accounts.
FirstCaribbean has maintained an "A-" rating by Standard & Poor's from inception, the highest rating of any commercial bank in the Caribbean Community. It was formed in 2002 with the merger of CIBC West Indies Holdings and Barclays Bank PLC Caribbean operations. As at December 22nd 2006, CIBC became the majority shareholder in FirstCaribbean, now holding 91.5% of the shares of FirstCaribbean International Bank Limited.
From 2004 to 2007, FirstCaribbean was named "Best Emerging Market Bank" each year by Global Finance Magazine of New York. In 2006 and 2007, Euromoney Magazine conferred its Best Bank Award of Excellence on FirstCaribbean, ranking FirstCaribbean among the most outstanding financial institutions in the Americas.
In 2006 LatinFinance Magazine rated FirstCaribbean the Best Bank in Barbados. In 2004 The Banker Magazine rated FirstCaribbean the Best Bank in Barbados and in 2006 The Banker awarded FirstCaribbean Best Bank Awards in each of The Bahamas and Jamaica.
FirstCaribbean International Bank is committed to partnering with communities in the 17 countries in which it operates. Through the FirstCaribbean International Comtrust Foundation, FirstCaribbean International Bank dedicates 1% of its prior year profits (pre-tax) to Community Partnership causes each year.
RBC Royal Bank of Canada's
RBC Royal Bank of Canada's history in the Caribbean goes back a long way. In fact, the bank established branches in the Caribbean before some of Canada's western provinces.
Strong maritime roots influenced its representation throughout the region. Its commercial relations began with a group of merchants from Halifax, Nova Scotia, who formed the Merchant's Bank in 1864, and were engaged in the thriving sea-going trade between Halifax and the West Indies. In those days Canadian southbound ships carried mainly flour, codfish and timber, returning north with their cargoes of sugar, rum, cotton and spices.
Through branches established in all major trade centres in the Caribbean, RBC offered valuable facilities for promoting trade.
The bank's first venture south was Bermuda in 1882 followed by Cuba in 1899. By 1914, the bank's international network included Puerto Rico, Bahamas, Trinidad, Jamaica, Dominican Republic, Barbados, British Honduras (now Belize) and Grenada. In that same year, RBC purchased the British Guiana Bank that had opened in 1836. By 1984 the bank had opened a total of 15 branches in Guyana (formerly British Guiana) but in November 1984 RBC ceased to operate there. The Bio-diversity Centre in Georgetown, created to study Guyana's largely intact rain forest, was built with funds from RBC's operations in Guyana, since foreign exchange restrictions made it impossible to take them out of the country.
Expanding through the Caribbean
In 1915, branches were established in three Eastern Caribbean islands - Dominica, Antigua and St. Kitts. Between 1917 and 1920 the bank opened branches in Nevis, Montserrat, Tobago, Martinique, Guadeloupe, Haiti and St. Lucia. Branches were subsequently opened in St. Vincent in 1959 and Grand Cayman in 1964.
RBC Royal Bank of Canada opened for business in St. Kitts on March 23, 1915, in rented premises on the Bay Road. In 1920, the bank bought a piece of property 50 yards away to construct its own branch. The tall, colonial-style structure took three years to build and has become an island landmark. The bank is an integral part of island life in St. Kitts and plays a strong community role. As part of its 75th Anniversary celebrations in 1990, the bank presented the Government with a bus for transporting handicapped children to a local school, which the bank helped to equip for these special children.
RBC Royal Bank of Canada operates two branches and two RoyalTouch™ Automated Banking Machines in St. Kitts.
By 1996 RBC Royal Bank of Canada, or its subsidiaries, had consolidated its operations with 1,190 employees in Antigua, Bahamas, Barbados, Cayman Islands, Dominica, Montserrat, St. Kitts and St. Lucia. In 2002, management of the entire area of eight countries and 14 islands was moved to Nassau, Bahamas from Toronto, Canada, with a regional office in Barbados.
Scotiabank St.Kitts is a truly international bank as it forms part of the Scotiabank group of companies, Canada’s leading international bank.
Scotiabank has operated in St.Kitts since 1982. Scotiabank St.Kitts currently operates a network of 3 branches, offering retail commercial and cash management services to individuals, small and medium-size businesses and corporations.
Scotiabank has enjoyed a history of evolution and growth. Our first Branch operation was opened in 1982 on Liverpool Row, Basseterre. Following thereafter our Charlestown Branch on Nevis was opened up. In 1995 to make our customer flow more manageable, we opened another branch in Bird Rock, Basseterre. The Bank presently has 78 employees and 6 ABMs, two of which are at the Marriott Hotel Casino and one at the Ross University School of Medicine.
Scotiabank St.Kitts, a subsidiary of The Bank of Nova Scotia, offers a comprehensive line of retail and commercial services including electronic cash management services through our network of branches.
The Bank of Nova Scotia and its affiliates are leading financial service providers in the region, offering a full range of retail banking and selected commercial services.
National Bank Limited
On 15 February 1971, St. Kitts-Nevis Anguilla National Bank Ltd., (National Bank), was issued a certificate of incorporation. On that historic date only two other countries in the English speaking Caribbean had indigenous full service commercial banks. Those countries were Guyana and Trinidad and Tobago. The twin island federation of St. Kitts and Nevis was the third territory in the region to establish an indigenous full service commercial bank. By 1977 National Bank had become the largest bank in St. Kitts-Nevis with respect to total deposits, total loans and advances, total assets, total income, and net profit.
Today National Bank is the largest banking institution, whether indigenous or foreign, in the Organization of Eastern Caribbean States, with regard to the principal financial indicators stated above. This remarkable accomplishment was achieved by the foresight and forward planning of Directors, the commitment and competence of Staff, the favor of Customers, and the trust of shareholders. The solid foundation laid in the beginning and the strong superstructure built thereon, make National Bank institutionally safe, financially sound, and operationally profitable. National Bank has not just survived; National Bank is an unqualified success. The future of National Bank is secure.
National Bank provides top quality service to the national and international communities, and makes sterling contributions to nation building. The Bank is committed to the diligent pursuit of its twin objectives of expanding its customer base and increasing its market share. National Bank adheres to its social engagement to be a responsible and exemplary corporate citizen. National Bank will not leave anything to chance, not take anything for granted, as it strives to maintain its position as the foremost sub-regional banking institution.