Trinidad and Tobago - Banking and securities



The Central Bank of Trinidad and Tobago (established 1964) is the central regulatory institution and the sole bank of issue. The commercial banking business is well established and is operated chiefly by Canadian, British, and American interests. Monetary and fiscal developments have been closely linked with the fortunes of the oil industry.

There are six commercial banks operating in Trinidad and Tobago, with assets of over $25 billion. In 1997, bank CEOs formed a Banking Association. The largest is Republic Bank, formerly Barclays. Other commercial banks include the Bank of Nova Scotia, Citibank, First Citizens Bank, Intercommercial Bank, and Royal Bank of Trinidad and Tobago. The Bank of Baroda, India's second largest bank, and the Bank of India, the third largest, have both expressed interest in entering the Trinidadian market. Offshore banking services were begun in the late 1990s by Republic Bank.

Workers and farmers make use of the Government Savings Bank offices. There are numerous agricultural credit societies, most of which are financed by the government's Agricultural Credit Bank. Credit unions are also common. The Trinidad and Tobago Development Finance Co., jointly owned by the government and the private sector, offers medium- and long-term financing to industry. The International Monetary Fund reports that in 2001, currency and demand deposits—an aggregate commonly known as M1—were equal to $1.1 billion. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $4.0 billion. The discount rate, the interest rate at which the central bank lends to financial institutions in the short term, was 13%.

Since about 1948, limited liability companies with publicly issued share capital have become increasingly important. The West Indies Stock Exchange (succeeded by West Indies Stock Brokers, Ltd.) opened a branch in Port-of-Spain in 1964. The brokerage organization became a member of the Jamaica Stock Exchange in December 1970. The Trinidad and Tobago Stock Exchange began operating in 1981. In 2001, it listed 31 companies, had a trading value of $174 million, and a total market capitalization of $5 billion.

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