Solomon Islands - Banking and securities

The Solomon Islands Monetary Authority became the Central Bank of the Solomon Islands (CBSI) in January 1983. Three commercial banks also operate on the islands: The Australia and New Zealand Banking Group, Westpac (which took over the Hong Kong and Shanghai Banking Corp.'s local operations in mid-1988), and the National Bank of Solomon Island (NBSI). Only the NBSI has branches outside the capital. Most villages rely on credit unions. The government's 49% shareholding in the NBSI was sold to the National Provident Fund as a part of a privatization program in 1992. The remaining 51% is held by the Commonwealth Banking Corp. of Australia (CBC).

The government participates in private investment projects through a holding company, the Investment Corp. of Solomon Islands (ICSI), the successor to the Government Shareholding Agency. It holds the government's equity in other financial institutions, notably the Development Bank of Solomon Islands (DBSI), as well as in many other companies, some of which are foreign-controlled. The government, via the ICSI, uses locally borrowed funds and foreign aid to assist industry. The government also guarantees commercial bank loans to companies in which the ICSI has an equity holding. The International Monetary Fund reports that in 1999, currency and demand deposits—an aggregate commonly known as M1—were equal to $55.1 million. In that same year, M2—an aggregate equal to M1 plus savings deposits, small time deposits, and money market mutual funds—was $95.2 million.