Ongoing battle in Central Bank of Barbados: Board of Directors vs. Governor

It is nice to be back to blogging after a short break.

One came across this interesting bit of battle in Central Bank of Barbados. The Board of Governors asked the Finance Minister to fire the current Governor Worrell. On being fired, Worrell used the Court to remain in job:

Minister of Finance Chris Sinckler, represented by Solicitor General Jennifer Edwards, will head to the High Court today to have a temporary injunction preventing him from firing Central Bank Governor Dr DeLisle Worrell lifted.

It is the latest development in a blow-up at the Central Bank which was exposed a week ago by the SUNDAY SUN in which it was revealed that the board of directors was no longer prepared to work with Worrell, who is the chairman.

The directors met with Sinckler days earlier and insisted that if Worrell was not terminated, they were prepared to step down.

Moreover, a major rift had also developed at the bank between the governor and his top management team who claimed he had not held management meetings for almost two years.

Meanwhile former Prime Minister Owen Arthur says Barba-dos is facing a serious financial crisis that must be resolved within the next 90 days in order to avoid a financial calamity. According to Arthur, that is the distinct possibility of the country running out of foreign reserves.

He said the weekend upheaval involving Central Bank Governor Worrell might give the country a chance to correct the disastrous financial policies pursued by the Government.

Arthur, a former Minister of Finance, told the DAILY NATION in New York on Monday that the bad policy of printing money had played a role in both the current crisis Barbados was facing and the Freundel Stuart administration’s move to oust the governor.

Well, well. Another evidence of what Central Bank Board can do
Further, there are economists asking Worrell to go as economy is bleeding:
Economist Ryan Straughn believes that Central Bank Governor Dr DeLisle Worrell is not the only one who deserves to lose his head for poor management of this country’s monetary and fiscal policy over the past seven years.
Speaking on radio here Monday morning in the wake of reports that Minister of Finance Chris Sinckler was demanding the Governor’s immediate resignation, the Opposition Barbados Labour Party (BLP) spokesman suggested that Sinckler should also be forced to step down given that the
Governor is a creature of the Minister of Finance who is ultimately responsible for the current instability of the Barbados dollar “I believe the Governor has embarrassed himself professionally and as a result of that he is now being embarrassed personally,” said Straughn, a former Central Bank employee. 
However, he highlighted Sections 47,48 and 49 of the Central Bank Act to show that “anytime any Governor believes that both the monetary policy and the fiscal policy run contrary to maintaining the fixed exchanged rate in Barbados, he has the responsibility to write the Minister of Finance and state specifically why he has come to such a conclusion and what are the remedies that need to be taken to rectify the situation”.
He was therefore adamant that the current threat of currency devaluation could not be pinned on Worrell alone, since Sinckler was a much as fault as the Governor for the recent money-printing binge. “What you are seeing manifested right now between Bay Street [the seat of Government] and Spry Street [the Central Bank] is just a symptom.
“I believe it is an attempt basically to hang the Governor out to dry [and] he would get no sympathy from me on that from a professional standpoint [since] I think he has done the country a disservice, because the Central Bank’s job is not to support Government, [it] is to protect the mandate of the fixed exchange rate. [But] it has been a willing participant in supporting the policies of the Government, which have led us to this position”, Straughn said.
He also suggested that Prime Minister Freundel Stuart must also share in the economic blame, while contending that the country lost $219 million in the
last three months of 2016.
Interesting case on ongoing issues in central banking.. 
This bit is also interesting:
Apart from the criticism over the Central Bank’s continued lending to the Government, regarded as the printing of money, Worrell has stopped holding press conferences for the past three years, choosing to only issue press releases and media programmes created by the bank with panellists hand-picked by the bank.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.

%d bloggers like this: