Barbados Central Bank Governor fired

After weeks of clashes with the Ministry of Finance, governor of the Barbados Central Bank DeLisle Worrell was fired last Friday, February 24, after eight years in the post.

According to a statement from the Barbados Ministry of Finance, deputy governor Cleviston Haynes was appointed to act as governor, following a specially convened meeting of the board of directors on Friday. Michael Carrington, financial controller of the Central Bank, was promoted to the role of acting deputy governor at the same time. The other deputy is Elson Gaskin.

Worrell’s dismissal came after three weeks of clashes between Worrell and members of the board of directors of the bank, which he chaired, as well as long-running disputes with top members of the bank’s management team.

Fed up with the “unyielding management style” of Worrell, which board members claimed he brought to the boardroom, directors said they were fed up and took the unprecedented move of going directly to the Minister of Finance Chris Sinckler threatening to resign if Worrell was not removed.

But, in addition to the concerns about Worrell’s management style, there seemed to have been more at stake.

In a letter dated January 3, 2017, Worrell wrote to Sinckler on behalf of the board, expressing concern about the current state of the bank’s international reserves.

Barbados’s reserves have almost halved in the past three years, falling to their lowest level in 14 years, at B$681 million ($341 million). That is around 10 weeks’ worth of imports, according to a Central Bank report published in January.

The governor also challenged the Government’s fiscal policy. “The board is of the view that decisive action is needed on project implementation and expenditure reduction to achieve announced fiscal targets if the government’s credibility is to be restored,” Worrell wrote in the letter.

This is not the first time the governor has spoken out about the Government’s fiscal operations. However, the Central Bank has continued to finance the Government, despite its dwindling international reserves.

In May 2016, the Central Bank said it expected to continue to finance the Government, but buy fewer sovereign bonds than before. This followed the announcement it had provided a total of B$427.5 million during the preceding fiscal year (2015–16).

In the past, the International Monetary Fund has warned the Central Bank of Barbados against financing the Government, encouraging it to “cease” lending, as it “aggravates pressures” on foreign reserves.

Worrell, faced with an ultimatum from the Minister of Finance on February 10, to tender his resignation by the end of business on February 12 or be fired, the former governor got a Sunday evening hearing before Justice Randall Worrell, who imposed a temporary injunction barring Sinckler from taking any action against the Central Bank boss.

That injunction was lifted five days later, but another six-day reprieve was granted to Worrell while his legal team, led by attorney Gregory Nicholls, took their case to the Appeal Court. The three-member panel of Appeal Justices, however, rejected Nicholls arguments that the harm caused if Worrell was fired would far outweigh any consideration of damages the court anticipated.

Nicholls had contended that apart from destroying the former governor’s reputation internationally, firing him would impact the integrity and independence of the Central Bank.

Solicitor general Jennifer Edwards, QC, however, insisted the governor was responsible for the economy and the minister carried the weight of finance and that the relationship between the two was strained, as well as between the board and the governor.

“If the Central Bank Governor and the Minister of Finance can’t work together, it frustrates the whole financial workings of Government, she said, noting that the public’s interest could not be served in such circumstances.”

Worrell had been governor of the Central Bank since November 2009. He was reappointed for a second five-year term in 2014. In 1973, he founded the Central Bank’s research department, and subsequently rose through the ranks to become deputy governor. After a 10-year stint at the IMF, he returned to take up the governorship.(from the Barbados Nation and other sources)