Worrell talks growth strategies
Governor believes more can be done on tackling financial issues
Caribbean officials have gathered in Barbados to discuss solutions to a number of challenges facing central banks in the region.
Among them ways of maximizing revenues from investments, debt management and online payment methods.
Addressing the opening of the seminar themed The Changing Impact On Central Bank Operations, Governor of the Central Bank of Barbados, Dr DeLisle Worrell, said although the region had done well when it came to safeguarding the banks’ operations, there was more work to be done.
“Our network of Caribbean central bank cooperation is something to be proud of . . . the shared understanding and the relationships that have been built up over the years have served us well in coping with common challenges we have faced from time to time, and in charting the path forward for the financial sector in the region,” he said.
He acknowledged, however, that the region was not always quick enough in tackling some of the financial challenges affecting the region. He also noted that given the advent of e-commerce it was critical for people such as operation managers, debt managers, economists and others to come together in search for “richer insight into the evolving nature of the financial system”.
“With the availability of new systems and technologies we have to challenge ourselves to rethink the things we do and how we do them and to ensure the finance serves the development needs of our increasingly sophisticated society,” added Worrell.
As it relates to the payment systems, Worrell said the concern was that only relatively small cash transactions and transfers could be made in real time because of issues of security and verification.
“The ongoing challenge for payment systems is how to keep the systems safe while at the same time speeding up the payments process to take advantage of the new technology . . . . The reality that you have to delay payment in order to make sure that it is genuine is something that is a challenge for us,” he said.
On the topic of debt management, Worrell said: “The conventional approaches to the management of debt distinguish between the circumstances of advanced countries and emerging markets, but they do no acknowledge any distinction between large self-contained countries like Brazil and small countries like ourselves who have to depend on foreign exchange inflows to fuel economic growth. We therefore have to share experiences among ourselves in search of our own guidelines for managing debt, guidelines that make sense in our reality.”
Worrell said the challenge associated with foreign reserve management was how to maximize the revenue central banks earn from their investments. He stated that the reserves were invested mainly in US Treasury Bills and other US dollar denominated instrument but the interest on those instruments were “very low” and that “reduces the income of the central bank”.
“The conference will discuss the pros and cons of adopting more flexibly investment guidelines in the search for greater yield on foreign reserves,” he added.
Participants contributing to the forum include those from Barbados, Belize, Jamaica, Trinidad and Tobago, Guyana and Haiti.
Worrell said since the conference was not focused on the macroeconomy, it would not directly address issues specific to how to grow the Barbados economy.