Financial liberalisation should be balanced, says Barbados Central Bank Governor
Saturday, April 10, 2004
BRIDGETOWN, Barbados: Whilst financial
liberalisation is a desirable goal, it should be balanced against an
appreciation of all economic factors both domestic and global, according to
the Governor of the Central Bank of Barbados, Dr. Marion Williams.
“Financial liberalisation…is important to
allow us to effectively integrate ourselves into the international landscape,”
Dr Williams told the Barbados Chamber of Commerce. “With respect to CARICOM,
it is a critical factor in the effective functioning of the CSME to which we
are all committed.”
She continued: “Capital account
liberalisation is the most important aspect of financial liberalization and
from the experiences of other countries there are some lessons to be learnt.”
“Firstly, it should take place in a context
of sustainable macroeconomic and trade policies so as to minimise risks."
“Secondly, developed financial systems and
supervisory infrastructures need to be in place before complete opening of the
capital accounts. The broad lesson is that financial liberalisation in general
is likely to succeed if it forms part of a coherent programme of economic
reform, and the financial sector should be opened when the economy is able to
cope with the adjustment.”
However, Dr Williams was keen to stress that
this process would not affect the country’s fixed currency peg to the US
dollar.
“Let me say up front that this discourse
will not discuss our exchange rate regime as there is sufficient evidence to
confirm that for small developing economies fixed exchange rates work very
well.
“Our fixed exchange rate acts as an anchor,
which helps to stabilise the economy,” she argued.
Back...
Most popular
articles: viewed, printed and e-mailed
Printable
version
| 
