The monetary authority in most countries is called the Central Bank. A central bank does not deal directly with the public like commercial banks such as NCB; it is rather a bank for banks. In Jamaica the central banking function is carried out by the Bank of Jamaica (BOJ). This institution is located in the city of Kingston. The Bank of Jamaica plays a fundamental role in the Jamaican economy. According to the Bank of Jamaica website, this institution was established in recognition of the need for an appropriately regulated financial structure to encourage the development process as Jamaica was about to embark on the road to political independence and with this it began its operation in 1961 under the Bank of Jamaica Law (1960). The major responsibility of the BOJ is to ensure monetary and financial system stability which is affirmed in its mission statement: The mission of the Bank of Jamaica is to formulate and implement monetary and regulatory policies to safeguard the value of the domestic currency and to ensure the soundness and development of the financial system by being a strong and efficient organization with highly motivated and professional employees working for the benefit of the people of Jamaica. Under the Bank of Jamaica Act, the functions of the Central Bank are: 1. To issue and redeem notes and coins.
2. To act as banker to the Government.
3. To act as a bank to the commercial banks
4. To keep and administer the reserves of Jamaica
5. To formulate foreign exchange rate policies
6. To act as advisor on the formulation and implementation of economic policies 7. To influence the volume and conditions of supply of credit so as to promote, the fullest expansion in production, trade and employment, consistent with the maintenance of monetary stability in Jamaica and external value of currency 8. To foster the development of money and capital markets in Jamaica 9. To supervise commercial bank and other deposit-taking...